Skip to main content

Relax, its still contrarian.

Times have changed. There was no interest in gold sometime back and all of a sudden its all rage. The interest showed by general populace is amazing.

There are tons and tons of articles explaining the value of gold as a hedge against inflation. I feel like squeezing their neck and scream why are you giving the greatest investment tip of the century free and that to bozos who does not understand it at all nor make even a feeble attempt to understand. I ell them patiently these are the very people who will stone your house and break your leg, the day gold prices hit a correction phase. They just dont have the discipline or the conviction (convictions comes from knowing the underlying wisdom) to appreciate what you say. Anyway, I appreciate their concern for welfare of others. And I admire them for that.

And at the same time there are many articles, which are predicting the downfall in the commodity markets as the interest rates rise. This is, as of now, unfortunately not sufficient in number. I would like to propose the government give subsidy, tax exemptions and civilian welfare award to these writers. After all they are bringing all their gold out of their closet and selling. The brave people who think they can weather the financial storm without the gold cover.

The honest part is more they sell more the gold is cheaper haha

The gold is gaining currency and is not contrarian any more. Or is it?

Many people are rushing into gold for one of these reasons

1. They want to buy it before it goes up [or they have to buy it for their wife at higher rates]

2. They have heard analysts say it will go. Why? Why why?

3. They want to use the present momentum to make some money

4. The gold future are new instrument, and they want to roll and shine in front of their friends, in how they can handle complex financial instruments

5. (And very plausible reason, especially in growth economies like India and China) They just have too much money floating and incidentally are buying jewellery.

6. Just getting lucky

7. And yes some do understand. But I am willing to bet, this group is still very small

The fact of the matter remains, that not many people are buying gold understanding the real value of gold and why the investment makes sense. The contrarians still are very much alone in the love of gold. For sometime they have to endure the chase-the-fad freaks.

It makes eminent sense to invest in gold, even at this level. It is still contrarian.

:) Falkor

Comments

Post a Comment

Popular posts from this blog

Cognitive rules of business presentations

In his recent book, Clear and to the Point, Kosslyn explained that the four rules of PowerPoint are: The Goldilocks Rule, The Rudolph Rule, The Rule of Four, and the Birds of a Feather Rule. Here's how they work. The Goldilocks Rule refers to presenting the "just right" amount of data. Never include more information than your audience needs in a visual image. As an example, Kosslyn showed two graphs of real estate prices over time. One included ten different numbers, one for each year. The other included two numbers: a peak price, and the current price. For the purposes of a presentation about today's prices relative to peak price, those numbers were the only ones necessary. The Rudolph Rule refers to simple ways you can make information stand out and guide your audience to important details -- the way Rudolph the reindeer's red nose stood out from the other reindeers' and led them. If you're presenting a piece of relevant data in a list, why not mak...
Post a Comment
Read more

Value of dollar - Part 1

A Simple Perspective Will Do The date is 2000-05-28. Don't you get tired of all the bad news bears reminding you of all these instabilities, excesses, and 'potential' tensions in the global economy? After all, hasn't it always been like that? Yes it has, but not in money it hasn't. Increasingly, investors find it harder to know where to put their savings. What about Government Bonds? Wrong. Their recent record of capital losses have wiped out your guaranteed yields, probably because the stock market keeps crowding them out, and this even in a strong dollar and low inflation environment. Furthermore, there is no reliable liquidity and potentially poor quality debt in the corporate sector. Foreign assets? Wrong. Most of the world's economies are riskier, have been under performing, and also, there is this thing called currency risk. Like how is the average person gonna cope with currency...
Post a Comment
Read more

Depreciation of British Pound 1900-2000

When the Bank of England was formed the powers to create money was finally transferred to private hands. The creation of Fed in US, was just a part of this cycle. Though it is a common knowledge US Dollar has depreciated nearly 100% since the creation of Federal Reserve, the same is the case of all the currencies across the globe. For example, below is the UK Parliament data that highlights the depreciating value of Pound.
2 comments
Read more