We’ve been known to reproduce famous billionaire fund manager George Soros’s quote on how to make ‘real’ money from time to time. As a reminder: "Find a widely held precept that is wrong and bet against it". Many Wall St types are calling gold’s days as over. Smart money is capitalising on that precept right now picking up ‘pet rocks’ (as one Wall St Journalist described gold) at bargain prices. Topically, Soros’s ex right hand man Stan Druckenmiller, arguably one of the world’s most respected and successful hedge fund managers in his own right (making his fund an average 30% annual return from 1986 to 2010), is doing just that right now. He just bought no less than $300m of gold! That makes gold 20% of his total fund, its largest single position. Why? He says: “…if you look at the real root cause behind the financial crisis [GFC], we’re doubling down. Our monetary policy is so much more reckless and so much more aggressively pushing the people in this room and everybody else out the risk curve that we’re doubling down on the same policy that really put us there…” In other words all the central bank stimulus we keep talking about, inflating financial assets around the world beyond their fundamentals, are simply making the core issue of debt even worse than the GFC and setting markets at current heady heights set for an even bigger fall. The chart below illustrates very clearly the value proposition between silver and US shares. We think it is self explanatory and is a perfect depiction of what attracts smart money like Soros and Druckenmiller.
Did they just receive their 2005 subscription to the Wall Street Journal? Not to be a turd... I do appreciate the perspective. I'm just salty today. Bought silver again last night and woke up to a fresh 50 cent plunge before my check was even in the mail.
29 years? What an odd interval to pick. Why not 30, or 50, or 25? Could it be that this 29-year interval is the only one producing a chart that appears to support the claim?
From that chart if you buy not it looks more like you will be buying at the Jan 91' mark and loose more in the short term. But people make of charts what they want to.
I would like to see the transaction slips these companies use to 'double down' or actually put their money into play. Many people 'back up the truck', 'go all in' ,'gonna to buy a ton when it drops another 25 cents', but really don't have the guts to do so, as if it has come down so much , why not much more? Again, if they really believed this, why do they offer to take your 'dirty fiat paper' for their precious, a must to go up metal
I sell fuel every day. Guys ask me what fuel prices are going to do. I tell them, "If I knew that answer, I'd be sitting on my couch in my underwear trading futures."
The good thing about data - you can view it in any light you choose. You give me the guidelines and I can generally provide a snip of data to back up your idea. Now, of course radical ideas are harder than realistic ideas, but... given ample time and data I would say most anything is possible. All that said, I think it is a decent time to buy silver.
I honestly don't think that the widely held belief is that gold is not worth investing in. I think the majority of people are seeing gold as very cheap right now. That is why I don't think we will see it appreciate much, if any, in the near future. That is just my opinion though since I nor anyone else in the world knows exactly what will happen. I'm also wary of anything that is said or published. For all we know this guy publicly bought $300m worth of gold but quietly has $1b riding on short option contracts. It would then make sense to try and nudge the everyday investors into buying while he pulls the rug out from under them.
