Predictions Feel Good

A random email arrived today in my “in” box:

“Gold has hit an 18 year high of $481.50/oz. last seen in 1987. This even though inflation has remained rather subdued. Frequently you will see a market move without any clear fundamental indication of why such a move should occur only to have that reason revealed later. Although there may be buying by some investors as a hedge against the possibility of a surge in inflation this does not appear to be the major cause of the strong bull move in gold since there has not been a corresponding down move in the bond market. A true believer in the inflation story would short bonds and buy gold. Instead bonds just like stocks have been stuck in a trading range. A more plausible reason may be that the oil producing nations are plowing their profits into the gold market as a hedge against the instability in that region. We may also be seeing buying by China as they may be planning to establish a gold backed economy. This would be a prudent long term move by the Chinese as their main competitor on the world stage (the U.S.) debases their currency with uncontrolled spending. Investors should include gold in their portfolio mix as that market remains in a long term Secular Bull Market. My stock of choice remains Newmont Mining (NEM $47.07).”

It is simply amazing that people listen to and act on such “talk”. When you talk like this there is no need for accountability as the story being told always has multiple outcomes laid out…hence the teller is never “wrong”.