Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: ecrire who wrote (978)	12/15/2005 11:56:52 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 50632

............... All that glitters - is not Gold ! Given all the pomp and circumstance surrounding gold of late... I thought this chart might bring reality vs. rhetoric into clearer focus: finance.yahoo.com Both the S&P and the Naz have outperformed gold stocks for the last two years. - whodathunkit ? With Palladium's move off of it's $190's low to it's recent $300 High... Gold would have had to run to $720 to equal it's move. The advantage the individual investor has over a large portfolio manager is that they can much more easily shift risk relative to reward. That is what Palladium has offered the individual investor over the last 90 days -- especially those who "sold gold too soon" (vbg). I don't know how many times I saw analysts and pundits on CNBC talking about Gold and occassionally Platinum, Copper and Silver... with not a word on Palladium. ...now that is a contrarians dream come true. A classic divergence between price and risk. Silver - with it's recent strong diveregence from it's relationship to Gold... also offered an incredible, absolute no-brainer Risk:Reward shift and also outperformed gold on this recent run. ...which should be no surprise to any self-respecting, card carrying gold bug... but, evidently was. Gold bugs more than perhaps any other investor niche - fall in love with not only the metal and their positions in it... but, more dangerously - in the story itself. In the "lotto ticket" trade that has only come once in any of their lifetimes (although the leap from Black to Yellow Gold in late 2000 did create a HUI Indice 7+ bagger - think in terms of DOW 70,000 from here... that's the move the goldstocks made). Over the last two years the story is no longer a contrarian one...in fact: Today -- it's "the" Headline story. Ask yourselves honestly (a psycho-emotional impossibility for goldbugs)what usually happens to any sector that becomes a "headline story" -- and begins to be pushed by the James Cramers, or Joe Battapaglia's of the world ? It always amazes me ... that the "bugs" only see risk at the bottoms. They were the most bearish, of the bearish back in late 2000, as they were just this past April and May at the end of the 2nd great capitulation of the unwashed bug masses in the last two years...after yet another near 100 point HUI Death march. And not surprisingly on rallies back to even...risk is lost from their vocabulary, they become myopic, get tunnel blindness to other opporunities and become raving zealots...only at the tops. Thankfully, I am wired differently. Don't get me wrong... I am very happy anytime a sector I own has rallied and is doing well. But, I happiest - because that's an opportunity to ring the damn cash register and get paid for also being bullish at the bottom -- where your ultimate returns are always determined. Human Nature... it has always been so. From Tulip Mania, to other Popular Delusions and Madness of Crowds from yesteryear, to the Tech & Internet Bubble of just 5 years ago...and it will always be so. Even 100 years from now... nothing will change in Human Nature. ...and that's why it's such a tradeable thesis. Newton's Third Law: " For every action there is an equal and opposite reaction" For every favored market son...there is a red-headed stepchild to be found. When Investors flock to gold...something else is becoming cheap -- especially relative to risk. Silver and Palladium offered 2 very easy outperforming trades here to those that choose to offset risk relative to reward. Those were "Red Shirt" Trades...and there's more where they came from... later, Slider