What Are We Doing in Gold?
A Statement of Purpose
by James Sinclair
We are in gold because Gold is Money when other money fails. Gold is the only money that has no liability attached to it. It is not a promise to pay but rather good payment. Gold knows no allegiance to any country or economic system. One ounce of gold regardless of the size, form or coinage is one ounce of gold which will be accepted anywhere, anytime. As such it is insurance against the titanic forces that throw world money and markets here and there. A 1000 dollar rally occurring primarily in three days for the Dow is not good news for the Bulls. That type of volatility makes all such investment pure casino. Investors are sick and tired of these 'casino markets,' which can defeat even the most seasoned professional.
We cannot erase the derivative mountain created by the Ivy League computer-nerd wiz-kids. We cannot undo the effects of the 'crimes of greed' committed by so many amoral corporate entities.
All these must still filter through the economic system as a virus does in the human system.
We are appalled by the opportunistic financial engineering that has just resulted in what is considered good earnings by the public of Citicorp and IBM, among others. You would think that the fancy footwork to create facades of good earnings by the corporate criminals now doing the manacled perp walk on evening TV would have had a more sobering effect on major other entities. But, clearly it has not.
All we can do is to insure ourselves against the depreciation of other assets (storehouses of value) by owning gold and gold related investments. We have to protect ourselves against the influence of the speculators who unfortunately have found gold, by selling 1/3 of our positions, carefully and occasionally on strength to bring down the price of our core position. When we have our core at zero cost, we can sit back and enjoy the ride. A little gold goes a long way! We do not need to use margin or trade very often. If you have been using margin at all or trading often, you have been speculating. In this case, you need to acquire a better understanding of what you are doing, and why.
Fortunately, it is not too late to get a grip, to clean up your act, define what you are doing, then act correctly. You are insuring yourself and attempting to get your insurance for free. Just as proper psychology is required to win in sports, so to is it required to win at investing. Know what gold is and why you are in it or leave it, fast.
James Sinclair
Chairman of the Board
TAN RANGE EXPLORATION
www.tanrange.com
21 October 2002
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