Contrarian Alert
When two of the world’s biggest newspapers write big Sunday pieces on one of your favorite investments, is it time to cash out?
Heh, if you answered yes, sell some gold today.
Both the New York Times and the Los Angeles Times are making our contrarian bone ache with weekend edition titles like “Inside the Global Frenzy for Gold” and “Why Gold Is Shining Brighter.” They’ve helped push the spot price to $1,110 an ounce early this morning, yet another record high. Addison Wiggin and Bill Bonner have repeatedly said that the “trade of the decade” is still on, but the media is making it hard on us today. Geesh… Matt Drudge’s big, bold headline this morning — even bigger and bolder than the healthcare reform news — “Gold Hits Record High as Dollar Wanes.”
Let the record show that both Chris Mayer and Dan Amoss told their readers to sell some of their gold stocks Friday, but neither left the market entirely. Chris’ Capital & Crisis readers took 112% profits by selling half their stake in one of his favorite gold miners. Meanwhile, Dan’s Strategic Short Report readers bagged a quick 68% trading options on a gold miner ETF that were set to expire in January.
“At the risk of stating the obvious,” Dan wrote to his subscribers, “we don’t want to lose sight of the fact that gold stocks are ‘stocks.’ Aside from the movement in gold bullion prices, gold stocks are sensitive to the overall level of the stock market. My lack of confidence in the broad market holding up tells me that now is a good time to take profits on our Jan. $40 GDX calls.”
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