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Golden Interest Gains!
When even Louis Rukeyser has a guy on his show explaining the value of gold, I am circumspect at best. This guy has been preaching the same drivel for years. The article that came out against Silverado was a hatchet job pure and simple, CNBC allows persons to talk of gold, it just all smells as we are in the very beginnings of this bull. Seems to me, the ultimate contrarian that I am, that things are getting a little dicey in here. Too many touting the value of gold that have made it clear in the past as to how they abhor the golden one. The charts are showing possible breakouts coming soon above the established bull channel as things appear to be heating up in the gold markets. We all knew that day would eventually arrive, it just seems awful sudden to me. Maybe it is just the speed at which things move now and I am behind the times.

This chart is of February Gold on COMEX:

If there is a near term downward reaction in prices, it will only represent a correction in an ongoing bull market. This will not detract from the long term trend in gold that has now established itself. Any shakeouts that occur are typical of bull markets. On the following weekly chart of Comex Gold, you can see the breakout above the bull channel. If this breakout holds, we are then entering a new acceleration phase of this Golden Bull and the long awaited 400 level will soon be achieved. Amazingly, I still hear people talking of how this is a correction in a Bear Market. This Bull was established long ago, and in early winter when it broke above the 330 area the long term trend was confirmed.

I don't see average Joe and Mary going ape over gold and silver as of yet. Matter of fact, I see the opposite. They are still holding onto this 'mutual funds are me' attitude. They continue to drop their fiat into these non-discriminate funds on a paycheck to paycheck basis by virtue of the 401 drops.

Two years ago I shut down the stock market investments and moved all funds to safer avenues. I had started moving funds to silver and gold again in early 2000. Guess what, no matter what they tell you, the funds are safer sitting in other places. Instead of losing the market average of 23% or whatever, you only lost 21% because your guy is good. Now isn't that something to be proud of. What a bunch of BS. Dollar cost average my #@$. Dollar cost averaging is great in a bull market. You should be doing it now with Prudent Bear or Tocqueville Gold Fund. Suzie Doormat is nothing other than a talking head for the likes of Gabbie Cohen. They all continue to spew the same mantra as though the bull is alive and well.

Get out of standard stock market investments and stay out. Unless you can choose very specific stocks, this is a Bear Market and most will go down in concert. These people are lining their pockets with your funds. You say it's too late, might as well hang in there. No it is not as there is much further downside to go. The bell has been ringing for a couple of years now, and yet few are listening. Be wary of bonds also, as how much farther can the prices of bonds truly climb?

By the end of 2003, the stock market may or may not hold today's prices. Bonds may or may not elevate from here in value. Yet, I am here to tell you that that is a risk not worth taking. The whole idea of investing is to GROW your funds while protecting your assets. In order to do this, you need to assume the least risk possible with the most growth potential. The only markets that offer this currently are the Precious Metals and the Natural Resources Markets, and that is gold, silver, oil, grains, cotton, coffee, and others. Get into things 'real' while the getting is good. The crowds will follow later when it finally dawns on them that it is over. By then, we will begin snooping around in the other markets.

When there are 2000 mutual funds instead of 9000, we may have hit a bottom. When the duck is at 500, we may have hit a bottom. When the SP 500 is at 500, we may have hit a bottom. This has much further to go before a bottom is in. The true investor hopes to accumulate wealth over time in a continuous and somewhat safe manner. The true investor knows that there are times that a switch of philosophy is demanded by the markets.

I am not a fan of the 'Greater Fool' theory, or in essence, buy higher and sell higher yet. In order to maximize your wealth you absolutely must "Buy Low, and Sell High!"

So what are you going to do?


Frank A Lechner

Questions or Comments:
The door is always open,
whynotgold@msn.com

Lechner is an independent business owner and investor who has studied the markets over the past 20 years, dating to the last major bull run in precious metal investments. We had a mini bull market in the early 90's and he believes we are currently in the early stages of an equivalent bull market to the late 70's and early 80's.

This is not meant as investment advice. This is only an opinion. Past performance is no guarantee of future results.

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