Here is WHY Gold is a Bad Investment

[Nine_Ender]

Quote from tradingjournals:

It is an incorrect conclusion because they did not include bonds, and the fees investors may have paid to manage funds. Bonds got better returns), which is not surprising to me because lenders may have implicit free options (in laws, asymmetry of leading vs. following, effect of financial means on policies). One would never find a lender losing his investment, without all equity holders losing theirs.

Does anyone have the chart numbers in excel? I want to discuss the topic on one of my sites.

In the long term, equities have always outperformed bonds.
Stating that bonds get better returns is just wrong.

 

[shortie]

Quote from shortie:

i don't see any problems with his analysis. he is looking at the most recent bottom and says that the gold bugs panicked there and still refuse to buy as it moves higher.

this articles worries me (as i am a proponent of going Long SPY:GLD at Bernanke line) because Hulbert detects really strong negative bias towards gold (but we are talking ratio here, so he could be correct and Ben's line will still hold)

a contradictory to Hulbert's claim is that other sources on the web (not quantified in any way by me) show that there are plenty of Gold bulls out there. an example is the article above where somebody cites 2,800 target, also many people on ET are bullish.

basically Hulbert could be wrong, or only somewhat correct

reposting this from another thread. amazing (or not?) that the sentiment has swung 180 degree in ~1 week. now there are too many bulls among the newsletters.

July 19, 2011, 12:01 a.m. EDT
Gold’s run is almost over
Commentary: Excitement in the gold market has reached fever pitch

By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) — Brace yourself, gold traders.

Bullion’s extraordinary run is fast running out of steam. Don’t be surprised if gold pulls back in coming sessions.

At a minimum, such a pullback would be a health-restoring event for the bull. However, such a pullback could also be the start of something more serious. We’ll know soon after it begins.

For now, though, the important thing for short-term traders to know is that excitement has grown markedly over the last couple of sessions, and now stands at close to the fever pitch that prevailed in late April. Soon after that previous crescendo of bullish enthusiasm, of course, gold encountered a stunning air pocket and fell more than $100 per ounce.

Consider the average recommended gold market exposure among a subset of short-term gold timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average currently stands at 67%, which is within shouting distance of the 73.7% level the HGNSI rose to in late April, which was a several-year high.

The wall of worry that the gold market has been climbing in recent weeks is close to disintegrating, in other words.

This represents a big change from just a few days ago, when that wall of worry remained quite strong — surprisingly so, in fact, given that gold had already run up by quite a bit and was close to its late April peak (which was registered at around $1,560 an ounce). This is what allowed contrarians to forecast that gold would be able to significantly break above its previous all-time closing high. ( Read my Jul 13. column in Barron’s “Gold can head even higher.” )
Click to Play
Why gold could lose grip on $1,600

An extended selloff in stocks and a drop in the Swiss franc against the dollar are two signs that the rally in gold is likely to fade, Richard Hastings, a macro strategist at Global Hunter Securities, tells MarketWatch's Laura Mandaro.

The deteriorating sentiment picture doesn’t mean gold’s run is over, I hasten to add. The bull market’s longer-term future depends in no small part on how sentiment reacts to coming market weakness.

It would be a positive sign, from a contrarian point of view, if the gold traders were to quickly run for the exits in the face of that weakness. That would suggest that there remains an underlying climate of skittishness about gold, which would allow the wall of worry to be quickly rebuilt.

In contrast, it would be a negative sign if the gold traders cling to their new-found bullishness in the face of market weakness. Contrarians believe stubbornly held bullishness to be a particularly bad sign, suggesting that more downside action is necessary before a sustainable rally can once again begin in earnest.
http://www.marketwatch.com/story/go...over-2011-07-19

 

[shortie]

despite today's single day drop, the past reality is that the bulls have enjoyed a stress-free ride. most recently they had small setbacks in Feb and May, but they are just little blips along the solid uptrend.

it remains to be seen if the current move down may amount to at least the other two corrections in size. on the chart there are some similarity to the previous excessive moves when the price keeps hugging the upper BB before a downleg. but who knows...

the things seem to be more clear in terms of Bernanke Line. SPY/GLD could be bouncing up short-term. will post later on that.

 

[shortie]

silver is shooting up again, must be the news. +3% quite vertically

 

[tradingjournals]

Quote from shortie:

silver is shooting up again, must be the news. +3% quite vertically

Which news? I think for today sellers would show up at around 39.90 area.

 

[tradingjournals]

Quote from shortie:

reposting this from another thread. amazing (or not?) that the sentiment has swung 180 degree in ~1 week. now there are too many bulls among the newsletters.

July 19, 2011, 12:01 a.m. EDT
Gold’s run is almost over
Commentary: Excitement in the gold market has reached fever pitch

By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) — Brace yourself, gold traders.

Bullion’s extraordinary run is fast running out of steam. Don’t be surprised if gold pulls back in coming sessions.

At a minimum, such a pullback would be a health-restoring event for the bull. However, such a pullback could also be the start of something more serious. We’ll know soon after it begins.

For now, though, the important thing for short-term traders to know is that excitement has grown markedly over the last couple of sessions, and now stands at close to the fever pitch that prevailed in late April. Soon after that previous crescendo of bullish enthusiasm, of course, gold encountered a stunning air pocket and fell more than $100 per ounce.

Consider the average recommended gold market exposure among a subset of short-term gold timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average currently stands at 67%, which is within shouting distance of the 73.7% level the HGNSI rose to in late April, which was a several-year high.

The wall of worry that the gold market has been climbing in recent weeks is close to disintegrating, in other words.

This represents a big change from just a few days ago, when that wall of worry remained quite strong — surprisingly so, in fact, given that gold had already run up by quite a bit and was close to its late April peak (which was registered at around $1,560 an ounce). This is what allowed contrarians to forecast that gold would be able to significantly break above its previous all-time closing high. ( Read my Jul 13. column in Barron’s “Gold can head even higher.” )
Click to Play
Why gold could lose grip on $1,600

An extended selloff in stocks and a drop in the Swiss franc against the dollar are two signs that the rally in gold is likely to fade, Richard Hastings, a macro strategist at Global Hunter Securities, tells MarketWatch's Laura Mandaro.

The deteriorating sentiment picture doesn’t mean gold’s run is over, I hasten to add. The bull market’s longer-term future depends in no small part on how sentiment reacts to coming market weakness.

It would be a positive sign, from a contrarian point of view, if the gold traders were to quickly run for the exits in the face of that weakness. That would suggest that there remains an underlying climate of skittishness about gold, which would allow the wall of worry to be quickly rebuilt.

In contrast, it would be a negative sign if the gold traders cling to their new-found bullishness in the face of market weakness. Contrarians believe stubbornly held bullishness to be a particularly bad sign, suggesting that more downside action is necessary before a sustainable rally can once again begin in earnest.

I find this guy's articles not consistent, but I am not making the effort to go in detail of what he wanted to say in both articles.

It is not a good sign for short side that he turned bearish when Gold went down yesterday.

 

[shortie]

Quote from tradingjournals:

Which news? ..

don't know.

Quote from tradingjournals:

I find this guy's articles not consistent, but I am not making the effort to go in detail of what he wanted to say in both articles.

It is not a good sign for short side that he turned bearish when Gold went down yesterday.

i see. he rushed out with his article to be the first who "knew"

the sentiment swings in gold that he reports are very interesting nonetheless.

 

[tradingjournals]

Quote from shortie:

1. he rushed out with his article to be the first who "knew"

2. the sentiment swings in gold that he reports are very interesting nonetheless.

We have the exact same thinking on both

With regard to 2., could it suggest a range bound?

 

[shortie]

range bound makes sense: lots of confused people jumping to new conclusions every day, lots of volatility, hard to find the direction.

 

[tradingjournals]

1. Today GLD gapped down, yet put options premium went down. Market makers may have knows something.

2. 1:38PM: silver just touched 39.889. How did SLV do?

Update: Unless SLV on google is delayed, SLV is one 1 dollar off (management fees?).