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Louis James: Are You Ready for an Early Shopping Season?

The Gold Report: Jeff Clark, senior precious metals analyst at Casey Research, recently wrote in an article titled "Time to Admit that Gold Peaked in 2011?" that countered a chart making the rounds showing gold matching its 1980 inflation-adjusted dollars peak in 2011. The chart implies we should expect a decade or more of lower prices. Aside from the fact that John Williams of Shadow Government Statistics might have a problem with how inflation was calculated, how are gold's fundamentals different today than they were in 1984?

Louis James: The fact that things are different today than in the 1980s is a really good point. The argument over methodology almost doesn't matter. Even if it were true that the gold price of 2011 matched the inflation-adjusted gold price of 1980, that wouldn't mean that gold has to go down the way it did in 1980. There wasn't a near collapse in the banking sector back then. There wasn't the Lehman Brothers upset. The government did not triple the money supply. We're dealing not with apples and oranges, but apples and whales.

TGR: If history is not a map for the future, is John Williams correct that we are getting ready for hyperinflation? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/n3XMmojNHoU/16045

How I Intend to Survive the Meltdown of America

By: Louis James, Chief Metals & Mining Investment Strategist

It is with a troubled heart that I look at the continued fighting in eastern Ukraine. I worry about my friends and students in the country who may well be in physical danger soon, if the conflict escalates. As an investment analyst, it’s the financial war the Russians seem quite willing to wage that has my attention.

It should have yours as well.

In our just-released documentary, Meltdown America, one of the experts noted that the Kremlin had already made moves to dethrone the US dollar as the world’s reserve currency before the renewed East-West tensions of this year. Putin has openly threatened what amounts to economic warfare as a response to sanctions placed on Russia after its Crimea grab.

Now bullets are flying—can Putin’s financial ICBM be far behind? [Read more...]

Casey's Louis James Warns: 'Don't Try to Time the Market'

The Gold Report: You warn investors against trying to time the market. If even experts don't know a bottom until it's behind them, how do regular investors know when to invest, when to buy the next tranches and when to cut losses?

Louis James: The wisdom of not trying to time the market is tried and true. Benjamin Graham said the same thing 60 years ago. I shouldn't have to defend this premise. Even though investors all know it, they fervently wish it weren't so; they just can't help themselves.

You can't time the market. A bureaucrat in Washington can open his mouth and send the price of gold up or down 5% in an afternoon.

Fortunately, we can look for value. Value tends to be slippery in the junior sector when you have a bunch of companies that, as Doug Casey famously says, are little better than burning matches. They have no income. Even the biggest players in the field are so volatile that Benjamin Graham would never touch them.

However, there are things that we can look for. We can compare companies to their peers. We can look at the ounces in the ground and see if something is out of whack. We can look at cash in the bank. The market is so beat up now that some companies with viable projects are trading for cash or less. It's actually possible in a market this beat up to make relatively low-risk acquisitions. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/m_wAlRF1mBo/15512

Gold Miners vs. the S&P - Surprising Conclusions

We often hear the claim that gold producers have not met investors' expectations for the past couple years. While there are many potential reasons for this, one explanation for their underperformance lies in the fact that producers diluted their share structures, leaving shareholders with smaller gains than they would have otherwise harvested.

To show how this dilution has impacted the industry, let's first review how gold miners performed last year compared to the S&P 500. [Read more...]

Fear vs. Fundamentals in the Platinum Market

In October of last year, we published a platinum-market overview in the Casey International Speculator and concluded by saying: "We recommend avoiding South Africa, and in this context it means staying away from platinum producers located there. If the energy situation spins out of control, miners' strikes continue, and the local trouble puts an indefinite halt to a significant portion of platinum production, some speculative opportunities may appear in the physical-metal market or platinum-backed investment tools. If we see signs of that happening, we may speculate on the results."

Although some of the events that we expected did occur this year, the "indefinite halt" has not. The nationwide wildcat strikes that ended in mid-November suggested that that scenario was possible, but the bubbling pot simmered down. We were asked by our readers to share our view on the implications of those actions on the price of platinum.

So, what is the outlook for the platinum market now, and is it time to buy? [Read more...]

Are You a High-Stakes Speculator?

I attended this year's New Orleans Investment Conference along with Doug Casey, Marin Katusa, and Casey Research's CEO, Olivier Garret. It was fun to see many old friends among the attendees and other speakers, but the most interesting thing was an experiment I conducted as part of my speech.

You see, there had been a talk earlier in the conference on picking "ten-baggers" (stocks that go up 1,000%). Now, there's nothing wrong with shooting for ten times your investment in a highly volatile stock. It's neither a crazy nor a hyped-up claim – we've had many ten-baggers in our portfolios, including Silver Wheaton (SLW) and First Majestic (AG). But it's not easy, and many of the nano-cap stocks that offer that sort of potential do the opposite and drop 90% – if not all the way to zero.

So I asked the audience to raise their hands if they wanted ten-baggers in their portfolios. About three-fourths of the audience put their hands up. I didn't take time to count the hands, but it was a lot of people – several hundred.

I then explained the realities involved: [Read more...]

The Bottom Line on Gold, the Dollar, and the Euro

By Louis James, Casey Research

One of the points we've made several times over the last year is that traders stuck in an old paradigm are frequently selling gold for the wrong reasons.

The most egregious (or just plain silly) example is that gold often drops when the euro drops.

This happens, not because there's anything wrong with gold at such times, but because gold is priced in dollars. Instead of being thought of as a store of value in many investors' minds, gold is viewed as a hedge against weakness in the dollar.

But what are dollars priced in? [Read more...]

How Is Dr. Copper Feeling?

By Louis James and Andrey Dashkov, Casey Research

Copper is sometimes referred to as "Dr. Copper," because the metal is used in so many industrial applications and is essential for many different sectors of the economy, from infrastructure to housing to consumer electronics. That usually makes its price action a good indicator of the state of the global economy.

The chart below illustrates the degree to which copper follows economic health – as opposed to gold, which is a traditionally a contra-cyclical commodity. Have a look. [Read more...]

"This Is the Bottom for Gold" - John Hathaway

In an interview with Louis James, John Hathaway discusses the US's economic outlook and why he's delighted by the current bearish sentiment toward gold.

[To be a successful speculator, one must be willing to go against the mainstream investment trends, as John is. There's no better way to get a primer on contrarian investing than by sitting in on the recently concluded Casey Research Recovery Reality Check Summit – and you can do that by ordering the Summit Audio Collection today. Every presentation, every chart and graph, and every actionable investment tip can be yours, in either the instantly available MP3 files, or in CD format.] [Read more...]

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