You make the most money when things go from truly awful to merely bad!
So said Arjun Divecha of GMO. I was reminded of this observation earlier this week after speaking at a conference on the Gold Coast, where investors were, how shall we put it charitably, somewhat pessimistic about gold prices, and downright skeptical at the thought of owning the metal in their portfolios. And whilst we understand their caution, and do see the potential for lower prices in the immediate future, including a potential trip back below USD $1,000oz, one can't help but think we are close to a fantastic buying opportunity in the metals. After all; - ETF gold holdings are at their lowest level in years, back to pre GFC levels - Hedge funds are net-short gold for the first time in over a decade - Gold stocks have sold off circa 80% in the past four years - The Gold Silver/Ratio is now sitting at 74, more than double where it was in 2011 - Headline after headline predicts lower prices and “the Death of Gold” It's truly awful, which is precisely the point. All that and more (VIEW LINK)
Gold bull since early 2000. Have spent +20yrs working in investment analytics, research & portfolio construction. Author of two books on investing in gold and the causes of the GFC. Lover of markets, competition & technology