Thursday, November 10, 2011

Gold Gold Gold

I started out this blog with my gold trade which as anyone who has followed this blog knows was on point. Since the gold trade I have for all intents and purposes abandoned gold altogether in this portfolio. I'm sure people (as readers have mentioned) are curious as to why this is.

Trading is like being in a casino, not in the sense of "gambling" but in the sense that money never leaves the just moves to another table. Sometimes it's the gold table, other times it's the currency table, or the equities table. The best indicator of which table has too much money on the slide is the media. Not only did I feel assaulted by ads for gold, analysts on gold, traders on gold but I was labeled as a recalcitrant for simply pointing out that gold was overbought. I was a villain for questioning gold albeit garnishing a rational and salient analysis (all of which can be found in my earlier posts)and this was particularly galvanizing to my thesis at the time.

I like to avoid long posts and instead just hit on what is important. I think there is a brilliance in simplicity. Also, this blog is really oriented around my trades. It's not intended to be an overall analysis of markets. I want to show people how I make (or lose) money and the rationalization behind my trades. Seeing as I post every trade I make for this portfolio I am the most transparent entity on the market providing analysis on what I'm doing and why.

I am apathetic to bearish on gold at this juncture as I feel gold is range bound at the moment. The main argument for gold bulls is i.) it has never been worth 0. ii.) It can't be printed. Well...copper, oil, salt, corn, and any other commodity has never been worth 0 either and can't be printed. I don't think people have faith in gold (as it has no utility) but people lack faith in governments. The thing that perturbs me is that gold is almost looked at like cash and when people need to raise capital they are going to sell gold.

I think gold is a solid buy @ 1350 though that can change as the world does. But I have to ask my readers...why gold?

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