Why don’t most money managers and financial advisors recommend gold and silver? They won’t recommend gold because they lose control of the asset and are not paid a management fee on gold or silver. In the late 90s, with the advent of the discount broker and the Internet, most stockbrokers lost their jobs. Those who stuck around became money managers. What a deal for them – they ended up managing money for a fee instead of making a commission on stock sales. The trouble is most of them don’t know anything about managing money; they do know a lot about charging you a fee to tell you what to do. You would have been better off just buying gold and silver for over a decade. This is their “day in the sun,” but the sunset is rapidly approaching. How can you tell if your financial advisor is worth a darn? Simple, when gold and silver take off, which should be soon, see if they advise you to cut back on stocks and add precious metals to your portfolio. If they don’t then that will tell you a great deal about whom they put first – them self or you.
This is a very strange world we live in where an official (Janet Yellen, for example) can promote a recovery that does not exist, if you look below the surface – and the hedge funds can jump on the statement to push down the price of gold and silver. No doubt, the price will drift back up as some sense of reality takes hold. These hedge funds are blight on free markets. They ignore reality and buy and sell for a quick short-term profit. They play a competitive zero-sum game and for every winner there is a loser. They beat each other up every day, which is fine by me, but in the meantime, they cause markets to be schizophrenic and to act irrationally. I rue the day when American’s forked over their hard earned money to these handsomely paid fools to place bets with OPM (other people’s money) while they have no skin in the game. They are poison! I avoid them like the plague and invest my own money for myself. I don’t charge myself a commission and can live with the results – though I am looking at the big picture and long term, not daily short-term results like the funds must do.
I had breakfast yesterday with my son Andy and our CFO. We discussed several topics, including our daily newsletter. We may soon make a few changes for the better. I talked about why I often present articles (in the Featured Articles Section or within my own commentary) that suggest the price of gold and silver may fall further. The truth is, no one knows where the price is going on a short-term basis. Is the bottom in yet? Ask JPMorgan. They are in control of the price (at the government’s behest). The precious metals will go up when they allow them to go up. In the meantime, they continue to dump contracts in sufficient volume and at the proper times to cause the algo-driven hedge funds to sell their longs, which JPMorgan happily vacuum up. (See Ed Steer’s comments in today’s Featured Article section.) I understand that there is some confusion on the part of many of our readers. That is why for many years, I have stressed the “big picture,” the “primary trend,” the “buy and hold” mentality and gold’s “insurance” roll in a portfolio. If you try and time your purchases, it is nothing but a crapshoot. If you understand why you need to own precious metals, and add small, regular purchases to your portfolio, you will end up way ahead when the bull market resumes. Ah, but you ask, “When will that be? I’ve been waiting for over two years now and where is the bull?” I can give you an educated guess, which is worthless – Maybe this month, maybe this fall.
Once again, unless we are hit with a black swan event, and there are quite a few possibilities swimming around out there now, the paper market on the Comex will dictate the “when.” That means JPMorgan will decide. But that is exactly the kind of mind-set I would hope you would avoid. If you own gold and silver you have already won. Maybe your best friend and your neighbor have made more “profit” than you have by investing in the stock market. But remember, gold outperformed the stock market for 11 of the last 13 years. Don’t get sidetracked by the “what have you done for me lately” attitude. Leave that for the NFL, NBA and MLB. Keep the faith, add to your non-dollar portfolio on a regular basis and trust me when I tell you that the bull market is NOT dead; it will return, most likely this year and once the bottom is in and the move up commences, it will be exactly the place to be with your assets. I realize this will not change the view of anyone but “the choir.” I am writing to you, “the choir,” and reminding you that yes, you did the right thing for the right reasons and you have already won – only the “non-believers” don’t understand that, but they will. Yes, friends, it is always darkest before the dawn and the sunrise is very close for gold and silver and the good times for the U.S. dollar and the stock market are the dangerous places to keep the majority of your money in.
The main reason that the stock market has held up is because it is the only game in town – and the Fed and the government want to keep it that way by keeping interest rates so low you can’t make any money in interest-bearing investments and by using naked short selling on the Comex to keep prices under wraps in gold and silver. So, when you question whether your hard earned money has been mis-directed into gold and silver, remember that it ain’t over till the fat lady sings and it was the place to be for 11 out of the last 13 years. And it will be again, but this time, when the bull resumes, the rise will be spectacular coupled with a big decline in the dollar and stocks. It has just been a bump in the road.
In today’s Featured Articles section, Marc Faber says, hold gold outside the U.S. in bank safety deposit boxes. I agree with the first part of his statement, but would never keep my gold in a bank’s safety deposit box, not even offshore. We favor private storage with a firm like Brinks. He only got half the story right.