Thursday, April 07, 2011

It's a "Duh" Market

7 April 2011

These comments are from a letter to a friend.

Hopefully they will stand on their own, in light of my frequent statements about the sure tendency of gold and silver miners to sell off (or "go nowhere") when gold and silver reach new record highs:

I'm just standing back and looking at all the post-breakout selling that is going on.

I am calling this a "duh" market. There is almost nothing you can invest in, in this sector, that will not be moving higher, yet sellers predominate over buyers.

Obviously the prevailing belief in the broad market is that each time gold and silver reach record high prices, it is an "apex," following which prices will drift back down again in future. However, gold (followed only a little later by silver) has been forging new highs since 2001. For me, ten years is long enough to be convinced that there is a secular (long-term) trend at work, and that the future will continue to hold higher prices for gold and silver, not lower ones.


Yeah. It's a good time to watch movies, read books, go for walks, spend time with family members.

Time is ONLY on our side. There is no downside from here. We're in gold/silver stock investors' heaven (even though it doesn't necessarily feel like it).

There is huge action beneath the surface, and it will keep erupting, moving prices higher from here. It is obvious to any objective thinker.

You can only lose if you think too much about it!

Oh yeah. Sometimes the seismic activity is not "volcanic."

It bubbles up like mudpots.

But it is very hot beneath the surface.

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