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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (12612)	4/26/2004 1:12:02 AM
From: ild	Read Replies (3) \| Respond to of 110194

April 26, 2004 Market Climate - Increasingly Fragile John P. Hussman, Ph.D. hussmanfunds.com The Strategic Growth Fund is now fully hedged against the impact of market fluctuations. ... Gold Provided that we do not observe much upward pressure on real interest rates from here, further weakness in the gold market would actually tend to increase our position in gold shares, which remains less than 10% of the Strategic Total Return Fund's assets. While some investors appear to be concerned that gold shares could plunge with the overall stock market as they did in 1987, it is notable that even on the basis of simplistic valuation measures, the 1987 plunge in gold shares began with the gold price/XAU ratio below 3.0, and took that ratio just above 5.0 (the historical norm on the gold/XAU ratio is about 4.0). Currently that ratio is 4.48, and on the basis of other measures, gold stocks also look reasonably inexpensive. Again, unless we observe further upward pressure on real interest rates, our inclination would be to add lightly to our precious metals shares on further price weakness.