Soros says gold "isn't safe"

For those who have never lived thru gold/silver mania and think every couple ticks up is the latest "bubble", here's a recent conversation with billionaire Jim Rogers where he talks about bubbles in the first portion of the interview. The link automatically starts playing the topmost video (currently Jim's dtd Sept 15) but if it doesn't, or they've put another video above him in the list, just click his name off to the right.

http://www.kitco.com/KitcoNewsVideo/kitco_news.htm


"....gigantic amounts of buyers and price increases that go thru the roof... people just become hysterical and prices double, triple, quintuple... MOST people still have not invested in gold and silver... during the hysterical phase everyone will be buying... the gold bull market has got a long way to go..."
 
Obama has enlisted 2 sources to help our economy.

1)Buffett is cheerleading the economy and trying to encourage investment.

2)Soros is talking down gold with the objective of getting more investment into financial assets. (Bernanke, key members of Congress, etc., have come out against the disruption of seeing gold work higher on almost a daily basis).
 
Quote from Magna:

George Soros talks his book, always has, always will (and as many know is heavily invested in gold bullion and gold miners). But most here are not old enough to have seen a true bubble in gold, circa fall '79 and the first few months of '80 when gold tagged $887.50 (not the $850 number that people mistakenly report). What's going on now, grind up $30, grind up $10, fall back $15-$20, grind up again, is not even in the ballpark of bubble. If you didn't live thru the last one you would be well served to dig up some old charts of gold from the timeframe I mentioned above before making silly pronouncements. And please understand that a little anecdotal evidence of someone's barber buying gold, combined with cable-TV ads for companies buying gold, again does not make a bubble but only shows that interest is slowly increasing as the public in the US and the world becomes more aware of the economic situation. A true bubble, with the complete and total craziness of the panic/greed that entails, comes at the very end of a cyclical bull run. We're not even close yet.
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nobody (no common man) got crazy buying oil. yet oil was a bubble. not all bubbles act the same way. calling something an "untrue bubble" doesnt make it not be a bubble.:p
that said, gold will at least double before it crashes to $100 an ounce.
 
Quote from Magna:

George Soros talks his book, always has, always will (and as many know is heavily invested in gold bullion and gold miners). But most here are not old enough to have seen a true bubble in gold, circa fall '79 and the first few months of '80 when gold tagged $887.50 (not the $850 number that people mistakenly report). What's going on now, grind up $30, grind up $10, fall back $15-$20, grind up again, is not even in the ballpark of bubble. If you didn't live thru the last one you would be well served to dig up some old charts of gold from the timeframe I mentioned above before making silly pronouncements. And please understand that a little anecdotal evidence of someone's barber buying gold, combined with cable-TV ads for companies buying gold, again does not make a bubble but only shows that interest is slowly increasing as the public in the US and the world becomes more aware of the economic situation. A true bubble, with the complete and total craziness of the panic/greed that entails, comes at the very end of a cyclical bull run. We're not even close yet.
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All these people need is to look back at 1999-2000. That was a bubble. Loss-making dot.coms with revenue lower than a local corner pub or newsagent going up 30 fold in a year and reaching multi-billion market caps. Internet incubator funds listing and opening at 500% premiums to their cash net asset value - without even having invested any of the cash yet. IPOs opening at triple or quadruple the offering price. Barbers not just offering you stock tips but being millionaires from their dot.com investments. A major blue-chip index going up 100% in 6 months. That's a bubble.
 
GoC, you have mentioned on ET having exposure to gold on the long side.

Can I ask you if that strategy includes a play on the miners as well?

Thanks.
 
Quote from failed_trad3r:

nobody (no common man) got crazy buying oil. yet oil was a bubble. not all bubbles act the same way. calling something an "untrue bubble" doesnt make it not be a bubble.:p
that said, gold will at least double before it crashes to $100 an ounce.
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However, oil is not really something retailers play in, whereas gold is. So for a gold top you'd expect substantial public speculation.
 
Quote from Debaser82:

GoC, you have mentioned on ET having exposure to gold on the long side.

Can I ask you if that strategy includes a play on the miners as well?

Thanks.
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So far I've only used gold itself, not any of the stocks. I just feel it's a more pure play, and there's no risk of underperforming the bull run by bad stock selection, corporate mismanagement etc.

However, in the later stages of a bull market, I would expect the miners to start outperforming, so at some point I will probably get into them. If you have any recommendations, I'm all ears.
 
Quote from Tsing Tao:

theres something to be said for the rise in silver telegraphing an end to the rise in gold

if silver is the poor man's gold and that's the dumb money, could it be possible that a spike in silver buying indicates the end is nigh for gold?
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Silver will indicate the end for gold, probably when the Gold/Silver valuation ratio approaches somewhere between 16/1 and 20/1. Given that currently we are at a Gold/Silver ratio of around 64 ( 1281/20 ), we have a long ways to go to the upside.

The obvious play would be to buy silver, or another less risky method would be to short gold and buy silver. Buying gold is going to be less effective than buying silver, percentagewise. But both will likely continue to go up.

I think you have to expect silver to clear $50 on the upside before we are going to be in range of the bull market ending on gold, and probably higher than that.

Once any signs whatsoever of an economic "recovery" ensue with any inflationary data, then gold and silver will be off to the races to the upside....
 
Quote from Ghost of Cutten:

So far I've only used gold itself, not any of the stocks. I just feel it's a more pure play, and there's no risk of underperforming the bull run by bad stock selection, corporate mismanagement etc.

However, in the later stages of a bull market, I would expect the miners to start outperforming, so at some point I will probably get into them. If you have any recommendations, I'm all ears.
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Basically you have 4 types of gold miners.

- The large caps (Anglogold, Barrick, Newmont).

Offers the smallest leverage on gold but on the other hand the most protection should spot gold turn sour in comparison with the other types mentioned next.

- The producing smaller miners. Think of AUY, CDE, HL, IAG,

Move less in concert then their larger peers so the risk is higher but the reward could be equally higher as well.

- The exploration miners.

Novagold, Gabriel resources,...

They aren't really mining any gold right now but could do so in the near or far away future. Profits could be gigantic (their price has basically already anticipated in most cases on actual mining to take place with high gold prices still around which obviously adds to the risk.)

-Avion gold, orko silver,...

The exploration miners with little to no proven reserves yet or other big obstacles.

Don't really care about these. The risk is way to high imo.

- You also have the ETF's. GDX and GDXJ. They offer a nice view on what miners should be legit and offer the safety of an index tracker which always outperforms owning individual stocks in a bear market.


I'm too dumb to read a balance sheet so in deciding which mine to buy I went for reaction to spot (I want my mines to move in trend with gold and not shoot down 20% when gold is up), institutional ownership (If Soros buys GBG or NG there should be some gold in the ground) and relative underperformance vs it's peers.

Myself only have exposure to type 2 and 3 of which both positions are hedged being USD denominated (I'm european) and with physical gold (in 2008 gold dropped 30% yet the miners dropped 60% to 95%).

To each his own in deciding which way to go that suits his situation best.

If one were to ask me which mine I would buy now if I had to chose one would be GBG, who are in the process of exploration mine to producing one but one should ofcourse do his own due dilligence on the matter I am sure my reasoning behind my stockpicking is rather unconventional and not suited to all.

Cheers.
 
He will tell you that gold is not safe when it is going up and then tell you that it is the best investment when it is going to fall. If you cannot figure out why, you do not know anything.
 
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