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Recieved this today from someone who went to gold show this weekend, seems the timing of the show couldn't have been worse with the meltup recently
I went to the Gold Show in San Francisco Marriot on Sunday 12/01/02, and thought I'd share my observations:

The first is that I didn't see many there. Only one echoing main tent hall for talks. That is a bit surprising, because gold and gold stocks are generally up over the last year. I found discussing the situation with individual newsletter writers the most interesting :

David Tyce, manager of the Prudent Bear Funds (and web site) was the most bearish (surprise!) talking about Dow 2,000 with one of the gold mining analysts who showed Kondratiev wave analysis overlaid on price changes, Stock market changes and gold prices. Pretty nice work, but definitely fringe negatives.

Jim Dines, the original self proclaimed gold bug, with pretty models in tow, looked less stressed. He pointed out that the drop in interest rate is so low that defined pension funds problems of obtaining the return needed for covering expenses will get worse. He is a little negative on stocks, but shows at least one indicator of a possible short term rise.

Adrian Day wasn't sure if we would have inflation or deflation, but that even in past serious deflations like 1929 gold did well, and could do so now. Surprisingly, for this crowd, there was much more talk about possible deflation than inflation, a view I disagree with.

Harry Brown, Libertarian candidate for president spent close to a half hour with me over wine discussing politics and his personal experiences in getting books published. A very charming tall image belies his extreme views: Bush is a megalomaniac and using the war to expand his powers. The US isn't going after North Korea, because they might actually have Nuclear weapons, and the inverse on Iraq.

My favorite is Ian MacAvity who writes the Deliberations news letter. His political commentary is savvy and skeptical like mine: Poindexter in charge of the computers that will keep track of all of us is so amazing that George Orwell couldn't get such a story printed. Ditto on Kissinger writing the new Warren Report. The best analysis I have seen of bubbles was done by Ian: He took most of the famous bubbles: 1929 stocks 1989 Japan, 1980 Gold etc., averaged them, and lined up tops and bottoms with 2000 US stocks and October 2002 low, and suggested that the high of the current rally could be quite a bit higher, but would probably define the trading range for the next decade plus, like it did in many other bubbles. I didn't get his charts, but am considering reconstructing them.

Paul Kangas of Nightly Business Report gave the keynote with decidedly bearish, well argued expectation for continuing economic weakness, not unlike my own view. (Presentations without charts are hard to remember for me, but here goes:)
The bearish sentiment from Investors Intelligence is too low at 25% when it is usually at 65% at market bottoms. Low levels of cash in mutual funds of only 5.1% means that if there are customer redemptions, funds will have to sell, and is a negative. He expects further US dollar weakness (as most of the others above). He described the real estate bubble with the low (55%) equity as a dangerous situation that will more slowly unravel in regional pockets. On the positive side, he thinks earnings could start to improve, and that accounting reform will add credibility (yeah right)

Gone is the hubris of yester years, when this conference included a bunch of the Internet euphoria. And gone is the excitement. Is that bullish or bearish for gold? I'm still long some gold stocks and feeling disappointed. My view is that Bernanke is right in the extreme and that the US dollar will be repudiated in my lifetime. But what do I know? I can tell you that my short term batting opinion on gold has been pretty bad.

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