Is the Gold Bull Market Finally Over?
The bull market in gold has run now for 12 consecutive years, the longest consecutive positive streak of any asset going back to, at least, 1800, far as I know. (If anyone knows of any other asset that's gone up the same of more years in a row, please let me know.) Over this stretch, surprisingly few have jumped aboard the bull to ride it up. And now the bull seems to be shaking off a lot of us.
An excellent website I follow, sponsored by Jim Sinclair - one of the smartest, most experienced folks I know in the area of gold (and general economic matters too) - has documented the panic that has descended on so many who have put some portion of their assets into gold. I don't know if these are people who recently (let's say in the last few years) invested in gold, or if some of them are among the few of us who invested sometime back when this bull market began. Whoever they are, they're apparently pulling their collective hair out and complaining to Sinclair. They're complaining to him because his site has been - for free - presenting the case for holding gold lo these many years. If you read the postings, you find that some are getting pretty nasty with this guy, I guess feeling he has somehow "betrayed" them, now that gold's price has headed lower. Frankly, I don't know how the guy puts up with this, but my best judgment tells me that he really did start this website as a kind of service to others, and will continue it in the same spirit. (Far as I can see, he doesn't make any money off of it, although he does own a junior gold miner, and therefore has an interest in gold continuing its upward march. Then again, I don't think he believes sponsoring this site is going to make a whit of difference to the success or failure of his business.)
But back to the gold bull market, what's happening on Sinclair's site really exemplifies why it's so difficult to stick with a real bull market. When I mentioned above that "the bull seems to be shaking off a lot of us," that's exactly what bull markets do. (Richard Russell taught me this vivid way to understand the occasional downturns in long-term, powerful bull markets. He runs a great service, Dow Theory Letters where you can tap into one of the great minds in investing - his.) Picture if you will, this massive beast shaking and bucking what you might call the "weaker hands" off his back. It's like the bull wants to shake off the detritus that's weighing him down before he takes off on his next leg up. Great image, isn't it?
Anyway, this is a long way of saying that the bull market in gold isn't over, but those who hold gold are being tested and some will fail the test. Too bad for them. On the other hand, I certainly understand the way they feel right now. Heck, it doesn't feel great watching the price of gold go down the way it has lately, especially if you've got any significant portion of your net worth dedicated to this item. Of course, one lesson to learn here is that you can't let emotions rule your investing. Another might be that, while it's not the easiest thing to do, identifying a primary bull market, investing in it early, and staying with it is a skill you may want to develop. Frankly, it's the only way I know of to really making any significant money in the markets. The rest of the trading in and out that most of us do hardly nets us all that much in the end.
An excellent website I follow, sponsored by Jim Sinclair - one of the smartest, most experienced folks I know in the area of gold (and general economic matters too) - has documented the panic that has descended on so many who have put some portion of their assets into gold. I don't know if these are people who recently (let's say in the last few years) invested in gold, or if some of them are among the few of us who invested sometime back when this bull market began. Whoever they are, they're apparently pulling their collective hair out and complaining to Sinclair. They're complaining to him because his site has been - for free - presenting the case for holding gold lo these many years. If you read the postings, you find that some are getting pretty nasty with this guy, I guess feeling he has somehow "betrayed" them, now that gold's price has headed lower. Frankly, I don't know how the guy puts up with this, but my best judgment tells me that he really did start this website as a kind of service to others, and will continue it in the same spirit. (Far as I can see, he doesn't make any money off of it, although he does own a junior gold miner, and therefore has an interest in gold continuing its upward march. Then again, I don't think he believes sponsoring this site is going to make a whit of difference to the success or failure of his business.)
But back to the gold bull market, what's happening on Sinclair's site really exemplifies why it's so difficult to stick with a real bull market. When I mentioned above that "the bull seems to be shaking off a lot of us," that's exactly what bull markets do. (Richard Russell taught me this vivid way to understand the occasional downturns in long-term, powerful bull markets. He runs a great service, Dow Theory Letters where you can tap into one of the great minds in investing - his.) Picture if you will, this massive beast shaking and bucking what you might call the "weaker hands" off his back. It's like the bull wants to shake off the detritus that's weighing him down before he takes off on his next leg up. Great image, isn't it?
Anyway, this is a long way of saying that the bull market in gold isn't over, but those who hold gold are being tested and some will fail the test. Too bad for them. On the other hand, I certainly understand the way they feel right now. Heck, it doesn't feel great watching the price of gold go down the way it has lately, especially if you've got any significant portion of your net worth dedicated to this item. Of course, one lesson to learn here is that you can't let emotions rule your investing. Another might be that, while it's not the easiest thing to do, identifying a primary bull market, investing in it early, and staying with it is a skill you may want to develop. Frankly, it's the only way I know of to really making any significant money in the markets. The rest of the trading in and out that most of us do hardly nets us all that much in the end.
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