Archives for December2010

Everthing Gold is New Again

By: Shayne McGuire December 29, 2010

In stormy times, investors look for something solid to hang onto—something like gold. The World Bank president himself, Robert Zoellick, suggested in November that the world’s economies could use the old reliable metal to help stabilize their currencies. For these and many other reasons, professional gold-fund manager Shayne McGuire argues that gold has nowhere to go but up. The following essay is adapted from McGuire’s latest book, Hard Money: Taking Gold to a Higher Investment Level.  LINK…
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Shayne McGuire is not your average “Gold Bug,” predicting a financial collapse. He’s head of global research for one of America’s largest pension funds managing over $115 Billion in assets. He says most pension funds have only 0.3% of their assets allocated to Gold and many fund managers are being forced to take a more serious look at Gold because of its outstanding performance (+280%) in the past decade. During the end of the last Gold bull market in the 70’s, global asset allocation to Gold was about 26% , compared to just 0.8% today (see chart below provided by the Erste Group Research). Shayne says, “a rise to $10,000 an ounce is not out of the question.” He says that Gold rose by a multiple of 23 during the end of the 70’s. We think that compared to this decade low of $250, it should take us to at least $5,750 an ounce($250 X 23)? We assume that no one really knows what the new high for Gold will be, but we’re convinced that Gold has much higher to go before this bull market is over. When looking at the chart below, think about the time period in history before these highs occurred; the World Wars, Depressions and Inflation? There’s no doubt in our minds that global assets in Gold will reach historical levels, our concern is– at what cost to society?   BK

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Richard Russell Signals Warren Buffet to Take Notes From His Father

From: 321Gold
http://www.321gold.com/editorials/russell/russell122810.html

Richard Russell
Dow Theory News Letters
Dec 28, 2010

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Some call him the Godfather of investment newsletter writers, Richard Russell has been in the markets for 50+ years and is highly sought after by professionals and retail investors for his investment wisdom. In the article above he says that Warren Buffet’s father, Howard Buffet understood Gold, but not Warren. Mr. Russell says that he has studied and experienced many bull markets and they never end in a whimper, rather an explosion to the upside. He feels that Gold will end this way and we are not even close to that end. BK

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