mamboni
23rd April 2010, 05:45 PM
Excerpted from: On the Brink of an Asset Explosion, II
http://news.goldseek.com/GoldSeek/1272031197.php
If the stock market isn’t a great place to put our capital and the energy markets are going to be impaired for years to come, which investment sector should we look at, you ask?
That one is easy to answer. We go to the one secular bull market that’s left. The one area where the fundamentals are actually improving. The one and only sector that stands to benefit from these insane monetary policies.
Gold! Precious metals.
This is the one sector where the fundamentals aren’t impaired. In fact, they are only getting better and better as the powers that be continue down their misguided Keynesian path to ruin.
Now let me point out that every secular bull market in history eventually ends in a bubble. Gold will be no different. After it has gone up far enough and long enough we will reach a point where the public comes to believe that gold is a sure thing, just like they thought tech stocks were a sure thing and just like they bought into the housing myth that real estate only goes up in price.
The difference is that the precious metal markets are fairly small markets. When the public finally catches gold fever it will drive a bubble the likes of which none of us have ever seen before. I expect $5,000 gold is probably a conservative estimate for a final top.
Now keeping in mind that this secular bull is far from over, let’s take a look at mining stocks.
Unlike the S&P and energy sector the mining sector has already tested the old highs. As a matter of fact the mining sector has led this bull from the very beginning.
When the rest of the market was putting in a final bottom in March of last year, the miners were already over 100% above their November lows. How’s that for relative strength?
From today’s level back to the old highs would yield miners a 20% gain. That’s probably equal to the best we can expect from either the stock market or the energy market.
However, miners are not limited by impaired fundamentals like virtually every other sector. The mining sector has an incredible wind at its back. Does anyone really believe mining stocks ($HUI) would be trading anywhere close to $519 with gold at $1,500? How about with gold at $2,000?
Before the secular bull is over I expect we will indeed see $5,000 gold. I would be completely dumbfounded if mining stocks don’t have 500-1000% of potential in them during the remainder of this secular bull market.
So one can fight with a secular bear market and impaired fundamentals for small gains or one can just get on board the only remaining secular bull market and hold on for one heck of a ride. This is how millionaires and billionaires are made. Not by trying to trade in and out of impaired markets.
So if we are on the verge of an asset price explosion I want to be invested in the one area best poised to benefit from the fundamental driver of that explosion…gold!
Toby Connor
GoldScents
www.goldscents.blogspot.com
http://news.goldseek.com/GoldSeek/1272031197.php
If the stock market isn’t a great place to put our capital and the energy markets are going to be impaired for years to come, which investment sector should we look at, you ask?
That one is easy to answer. We go to the one secular bull market that’s left. The one area where the fundamentals are actually improving. The one and only sector that stands to benefit from these insane monetary policies.
Gold! Precious metals.
This is the one sector where the fundamentals aren’t impaired. In fact, they are only getting better and better as the powers that be continue down their misguided Keynesian path to ruin.
Now let me point out that every secular bull market in history eventually ends in a bubble. Gold will be no different. After it has gone up far enough and long enough we will reach a point where the public comes to believe that gold is a sure thing, just like they thought tech stocks were a sure thing and just like they bought into the housing myth that real estate only goes up in price.
The difference is that the precious metal markets are fairly small markets. When the public finally catches gold fever it will drive a bubble the likes of which none of us have ever seen before. I expect $5,000 gold is probably a conservative estimate for a final top.
Now keeping in mind that this secular bull is far from over, let’s take a look at mining stocks.
Unlike the S&P and energy sector the mining sector has already tested the old highs. As a matter of fact the mining sector has led this bull from the very beginning.
When the rest of the market was putting in a final bottom in March of last year, the miners were already over 100% above their November lows. How’s that for relative strength?
From today’s level back to the old highs would yield miners a 20% gain. That’s probably equal to the best we can expect from either the stock market or the energy market.
However, miners are not limited by impaired fundamentals like virtually every other sector. The mining sector has an incredible wind at its back. Does anyone really believe mining stocks ($HUI) would be trading anywhere close to $519 with gold at $1,500? How about with gold at $2,000?
Before the secular bull is over I expect we will indeed see $5,000 gold. I would be completely dumbfounded if mining stocks don’t have 500-1000% of potential in them during the remainder of this secular bull market.
So one can fight with a secular bear market and impaired fundamentals for small gains or one can just get on board the only remaining secular bull market and hold on for one heck of a ride. This is how millionaires and billionaires are made. Not by trying to trade in and out of impaired markets.
So if we are on the verge of an asset price explosion I want to be invested in the one area best poised to benefit from the fundamental driver of that explosion…gold!
Toby Connor
GoldScents
www.goldscents.blogspot.com