01/21/11 Baltimore, Maryland – Yesterday, we began telling you about our visits with our strategic advisors…that is, people who advise us about what to do with our family money.
One of them runs a fund that focuses on India. The other runs a fund in Germany. Both are looking for bargain stocks – one in the Old World. The other in the New World.
Yes, Asia is the New World now…America is part of the Old World.
And both of our strategic partners told us the same thing: it’s gotten a lot harder to find bargains.
So what do you do, we asked. “Just keep looking…” was the answer.
We were explaining the difference between investing for yourself and investing for your family. If you’re investing for yourself you usually have fixed objectives – often retirement financing. Since you know when you will need the money, you need to focus on investments that will pay off in the allowable time.
Trouble is, the trends that pay off most tend to be very long term. And very hard to time. Gold, for example, is probably going to pay off in a big way – some day. It has been in a bull market for a decade. It is hard to imagine such a powerful bull market ending in a whimper… Most likely, it will end in a Big Bang…as the price goes vertical.
We’ve been saying for a long time that the Dow and gold will probably come to the same number, sooner or later. Maybe around 3,000. Maybe 5,000.
Whatever it is, it will be a big payday for people who’ve stuck with gold. But what if you need money next year…or the year after? And what if you buy gold today and it drops 50% – as it did during the early ’70s…in the middle of a huge bull market? Bummer, right?
But if you’re investing for the family, you can take the long view. You can buy gold, bury it…and forget it. Maybe the next generation will need it.
Just don’t forget to tell someone where you buried it!
Regards,
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Just learning that inflation was caused by money creation was enough reason for me. Then to find out commerical banks are creating it too?? I’m just not sure why it took me so long to become suspicious of paper money in first place.
i can’t remember where i buried anything!
@Deft: I could have said the same thing, verbatim.
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Hmmm… bury your gold for a long time? Doesn’t sound smart to me. Buildings are placed over it. Land trades hands. Govnmt’ seizes properties. Natural disasters (such as floods, earthquakes etc) revolve and scoop the soil. Landmarks disappear.
You can (and should) bury some of your gold, but NEVER for the long term. And never without a proper map!! But I think (hope?) Bill is just using a figure of speech…
It is rather hard to envisage metal drops 50%. Just yesterday, the monetary picture was painted bleak and colorless and the printer was roaring ahead full steam. And today, the story seems taking a full U-turn. The scenic view of grand canyon remains splendour and it will remain same for centuries until it is struck by a unsolicited comet. White color doesn’t change to gray, green or yellow overnight.
The macro view remains same. Printer is working at least at par as of yesterday, as reported. People shuffle here and there, adhering to their own personal anthem unchanged. In the midst of the current metal fending off a hard blow, only the old man MG stays unwavered, still upholds his personal constitution, by endless repetition of “Whee, whee, whee”.
There is one thing out of a thousand to bear in mind, ie, “things aren’t that cheap as of yesterday.” The trend remains same.
Bill, please share your thoughts on the “Unified Zombie Theory” or more aptly the “Grand Unified Zombification Theory” in the emerging democracies such as Tunisia, where now people expect more of the government and the police is calling for union representation, etc. Thanks!
As a matter of fact, it behooves us to delve into the [GUT (Grand Unified Theory) of Zombie] before things start to get really out of hand…