Marketsurfer's bold gold proclamation
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Contrarian Indicator?
Still thinking 600 and this is the place to be short Surf?
Still thinking 600 and this is the place to be short Surf?
Quote from marketsurfer:
Greenlight Founder Takes Grandfatherâs Advice on Gold (Update1)
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By Stewart Bailey and Saijel Kishan
Jan. 28 (Bloomberg) -- Greenlight Capital Inc. founder David Einhorn is finally taking his grandfatherâs advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending.
Since Einhorn was 10 years old, his grandfather has warned him that investing in bullion and gold-mining stocks was the only âsensibleâ thing to do given the threat of inflation and the risks of so-called fiat currencies, New York-based Greenlight said in a Jan. 20 letter to clients. The firm had never before considered buying bullion or mining-company shares.
âTo everyoneâs dismay, we believe some of Grandpa Benâs predictions are playing out,â Greenlight said in the letter, a copy of which was obtained by Bloomberg News. âThe size of the Fedâs balance sheet is exploding, and the currency is being debased.â
Greenlight is turning to the centuries-old currency to mitigate the effects of the economic collapse and government efforts to end it. Bullion gained for the eighth straight year in 2008 as governments in Europe and the U.S. rescued banks from collapse.
Greenlight said in the letter that in addition to buying gold, it has added call options on gold and the Market Vectors Gold Miners exchange-traded fund to its other investments. Call options are the right to buy a security or commodity at a set price, within a set period of time. The owner of the call profits when the security rises above the set price.
Gold & Silver Index
The 16-company Philadelphia Stock Exchange Gold & Silver Index gained 90 percent in the three months through yesterday while the Standard & Poorâs 500 Index fell 0.4 percent. Gold rose 21 percent in that period. Gold futures for April delivery fell $11.30, or 1.3 percent, to $888.20 an ounce today on the New York Mercantile Exchangeâs Comex division.
Steven Lehman, who manages Federated Investors Inc.âs $1.3 billion Federated Market Opportunity Fund, beat the S&P 500 by 30 percentage points last year. The fund, which outperformed 99 percent of its competitors in that period, also has bet on the precious metal and counts Toronto-based Yamana Gold Inc. and Goldcorp Inc. among its top holdings.
âToo Many Mistakesâ
Greenlight, which Einhorn, 40, started in 1996, has returned an annual average of 20.8 percent from its Greenlight Capital LP fund. The firm said it made âtoo many mistakesâ last year, when it lost 23 percent from its main fund, its first annual loss. Mary Beth Grover, a Greenlight spokeswoman, declined to comment.
The Federal Reserveâs policy of taking unorthodox steps to boost the supply of credit is essentially âprinting money,â Greenlight said. The governmentâs âaggressiveâ fiscal policy also signals all efforts will be made to stem the effects of the current economic problems, the fund said.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.
What the hell is WRONG with you guys? lol
Gold is slowly smashing through upside barriers. Broke both downtrendlines now......well, someone has to be short.
marketsurfer the best trader on ET:eek:
When it breaks 1030...then the holders of Gold have proven that they are great managers of DEAD MONEY. Siting on a non-interest bearing POS since march of '07 is STUPID.
If you've done so then your break even cost is not 1030 it's about $1100 due to the cost of capital and opportunity cost...that's smart trading right there.
If you've done so then your break even cost is not 1030 it's about $1100 due to the cost of capital and opportunity cost...that's smart trading right there.
Don't know if you're being serious or not here...
He's a good dude from what I can see and made a really good call from last year when many people thought gold would blow past 1034 on to 1200, 1300, etc. without a significant pullback.
The thing is, as all traders (should) know, you have to be flexible and able to react to your environment; to change your course if necessary.
IMO, right now is a techinically and fundamentally ridiculous time to short gold except on an intraday timeframe or when it gets really overbought for a swing short, but keep a tight stop!
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