I wouldn't want to ever sound disrespectful of Russ W but Russ, you were in at the very start. Even Greenspan just said the other day that you cannot predict what's going to happen now based on the past. I think you are missing the larger paradigm shift which will render past TA useless. Most traders, commercials whatever are often myopic and live in their own worlds. You are obviously feeling a bit guilty over the huge profits you have made because you were often the very first to get in on some of the specs right after the placements LOL. I'll wager that you are going to feel even guiltier as your positions have a better chance of appreciating much more if you stay the course.
I want to say this, I have 2 brokers in Los Angeles and 1 in Vancouver that I use. The LA ones are VERY high power brokers. One is a personal friend of Joe Battapaglia. Neither of these guys knows anything about the golds, not even the senior ones. They think gold is a joke. The Vancouver one has over 1500 clients and he is very knowledgeable about some of the juniors and specs. Relatively few of his clients are in PMs. He used to be more into these but has grown more conservative along with his clients over the years since 1997. He said he is not concerned about pullbacks in this sector as the trend is your friend. Russ, this trend has not only not broken down but it is looking better than ever. We, imo, are nowhere near the blow-off phase in the PMs where a bear market would be born after the mass hysteria. Sorry but there is no mass hysteria yet. This is firmly a bull market in PMs and cannot end unless we see at least a repeat of the 800.00 POG days or the 1995/6/7 bubble that ended with Bre-X. What we have seen so far is small potatoes.
Richard Russell should take up knitting also along with 10,000 of his subscribers who are the most brilliant minds in the world even if all of them don't share his $2,000.00 gold target ? Russell and many other economists are calling for huge price increases in gold. Are you even suggesting that these guys are shills of those with short interest ? I doubt this is so. I read Russell every day and I can say that Richard would print letters from his subscribers disagreeing with his projections if he had many.
If Russell tells his subscribers to increase their gold holdings to 1/3rd I will tell you flat out, YOU are likely on the wrong side of this argument *at this moment*. While I said that bear markets are born right at the blow-off top, you can BE SURE that Russell knows this principal because he is one of the best Dow Theorists out there and would NOT be recommending a move which would seem outrageous to his subscribers and would NOT bring them in when a market is topping. So using him as an indicator that we are entering into the final phase would be a GROSS mistake.
I'm not selling, in general, and have almost exactly 1/3 of my worth in PM's many of which are showing larger % gains than RR's recommendations of conservative seniors. I owe a lot to you and Claude and many others here for my ongoing education and building a portfolio of 2nd and 3rd tier PM stocks but I'm not going to be lost in the technicalities of each play as EC is. EC is so sure that most of the plays out there will fail that he forgets that we already realize that but when the tide comes in it raises the yachts as well as the garbage and litter floating in the harbor.
If Russell says increase your position in gold than you can be sure that Allan Greenspan will do exactly that on Tuesday as he is one of Russells subscribers, in fact EVERY major economist in the world is a subscriber to him. Good luck fighting this trend. Short term you can win maybe if you play the swings but you are just as likely to be found without a position when gold spikes up 50.00 in one day and down 40.00 the next. Do you remember those days ? I do.
From Russell today:
dowtheoryletters.com
"The Russell opinion is that following the greatest and most speculative bull market in history, we could have expected a severe and costly bear market which would have taken stocks back to great values. But because of the drastic, almost insane measures taken by the Greenspan Fed to battle the bear, this bear market will end with the death of the dollar as a reserve currency and most likely with the end to the US as the world's sole superpower.
Before this bear market is over, I foresee paper money being distrusted and discredited and the institution of the Federal Reserve not only despised but rejected. The US, today the world's greatest debtor, will no long be the world's leader, and I foresee US stocks smashed to levels not dreamed of even by the leading pessimists of today.
All the above may sound harsh, but it is what I believe lies ahead. When the normal and natural forces of the market are man-handled as they have been under the Greenspan Fed, other normal and natural corrective forces will ultimately take over. In the history of markets, the greater the speculation, the greater the ultimate correction. And the world has seen nothing like the speculation of the last eight years.
Every movement in the stock market, minor, secondary or primary -- is ultimately corrected. The "double bubble" that we've experienced under the Greenspan Fed is unprecedented in stock market history. This bear market, before it has breathed its last, will also, in my opinion, be unprecedented in its severity......
.........Question -- So what do you suggest?
<FONT COLOR=RED>Answer -- I suggest just what I've suggested all along. Gold and gold shares. But I'm making one change. I now suggest that subscribers put at least one-third of their liquid assets (not counting their home, their business, etc, just the liquid assets) into gold coins and gold shares.</FONT>
Question -- Where can I store the gold coins?
Answer -- I don't know, find a place to hide them. There's nothing like the actual possession of gold with no paper of ownership between you and the actual metal. Find a place to hide 'em, period.
Question -- What if the government decides to call gold in as they did during the '30s?
Answer -- It won't happen. Look, the Chinese government is now openly and strongly encouraging its citizens to accumulate gold. Do you think the US government would move to confiscate gold from its citizens while the Chinese are accumulating gold? Do you realize the idiotic implications of that kind of move? Communist China being freer than the democratic US? No, there'll be no confiscation of gold in the US, believe me.
Question -- OK, Russell, let's say we stay with our gold, and ultimately gold goes into its bull market third phase, Gold blows off at I don't know, a price of 800 or 1,000 or 3,000. What do we do then? Shouldn't we sell out? But what do we sell for, more paper dollars?
Answer -- Whoa, that's looking too far ahead. I don't know what we'll do when if or when the gold bull market goes crazy on the upside. Maybe at that time we'll just hold the gold. Or maybe we'll sell the gold for a gold-backed Chinese renminbi or an Arab gold dinar. I'll just have to see how things look at the time. That's looking too far ahead. First things first -- for now, just build up your gold position.
Question -- You say we're still in the early accumulation phase of the gold bull market. How do you figure that?
Answer -- Read some of the e-mails at the end of this report. The public at this point doesn't even know that gold is rising in price. If they do, their reaction is "So what, who needs gold, my dentist, maybe." The public doesn't realize that gold is real wealth and that dollars are a temporary currency and not a store of value. When the public finally realizes what happening to its dollars, there'll be a panic to swap dollars for gold.
Question -- Russell, why are you so sure that this is really a gold bull market.
Answer -- Because the government of the US has put itself in a position that is untenable and unsustainable. We're spending ourselves into a form of bankruptcy. Sure, a sovereign nation with a reserve currency can't go bankrupt, but it's paper can become unacceptable to buyers from other nations.
The US today is enjoying its so-called "prosperity" solely because other nations continue to accept dollars for their goods, merchandise and services. But two phenomena say that the dollar, as a reserve currency, is doomed. The first is the trend of the dollar which in the big picture is down. The second is gold, which is now in a primary bull market. Both of these spell the demise of the dollar. When the dollar is no longer acceptable by other nations, the US prosperity will be over.
Of course, a third indication of trouble is rising interest rates. People want a greater return on their investment when they become suspicious of that quality of that investment, and as people become suspicious of the dollar interest rates will tend to rise. But here again the Fed is interfering and manipulating, even threatening to buy bonds in order to hold long interest rates down.
Question -- What gold and silver stocks do you recommend?
Answer -- The top quality and the one stock you must own is NEM. Then you can own PDG, AEM, RGLD and I'm adding ABX, AU and ASA. Others I like are GG, GLG. Other more speculative stocks are CBJ, CDE, KGC, DROOY, EGO, WHT, SSRI, PAAS."
If you aren't a subscriber its a good idea.
dowtheoryletters.com
ralphie |
