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<p>[QUOTE=&quot;Daniel M. Ryan, post: 1240212, member: 32253&quot;]It is over the very long term, but the long term can be pretty long.</p><p><br /></p><p>Actually, gold&#039;s not unlike the stock market. Both go through long-term cycles that last about thirty years. (And, like gold, there are lots of people who&#039;ll tell you that the stock market is an accurate gauge of business value...) The last super-cycle for stocks began in 1982, with the market P/E ratio well below 10 and a consensus view that stocks were dead. The top of the cycle was hit in early 2000. Ever since then, stocks have been range-bound over the very long term. The P/E ratio in early 2000 was well above 30. The churning since then can be seen as necessary for earning to catch up to inflated stock values.</p><p><br /></p><p>Of course, this broad brush misses a lot of twists and turns within. March 2009 was the &quot;buying opportunity of a lifetime.&quot; (Doug Kass.) Septemer 2007 was a bad time to get in. </p><p><br /></p><p>Gold goes through a similar process. The first cycle, distorted by previous price control, began in 1968 with gold at $35. Despite at least one horrendous spill in 1975-6, it continued upwards and peaked at $850 in January of 1980. Note that gold peaked more than two years before stocks troughed. I point this out because the gold supercycle turned up not long after stocks hit a brick wall in 1966. After plummeting to $300 in 1982, shortly before stocks turned around, gold fluctuated between $300 and $500 until the late 1990s. It then took a dive to $250 and troughed there in 2001. Again, the gold supercycle shifted some time after stocks did.</p><p><br /></p><p>Despite that lack of overlap, the gold supercycle goes roughly opposite the stocks supercycle. If you sold your gold near the peak in 1981 ($600/oz) and put the proceeds in stocks, you would have done all right in the long term. Same with selling stocks near the peak (say, 1999) and buying gold. Sad to say, I missed the turn in &#039;99. I thought the stock market would resemble the &#039;70s, but I didn&#039;t think about what that meant for gold. </p><p><br /></p><p>Stocks and gold have this in common: they&#039;re both assets. For whatever reason, asset classes fluctuate widely over the very long term.[/QUOTE]</p><p><br /></p>

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