The Days of “Buy and Hold” Are Over, says John Mauldin

The economy is still the pits yet stocks are on a tear. What’s an investor to do in these confusing times?John Mauldin, president of Millennium Wave Advisors, admits the average investor doesn’t “have as many good choices” as in the past.Contrary to what “experts” have told the public for years, now is not the time for buy and hold, Mauldin says. “You can be a trader. You can ride the wave, I’ve got no problem with that but I don’t think you want to buy something and hold it for five years.”That’s because he thinks another correction is coming in the not so distant future.Mauldin, who writes the Thoughts from the Frontline e-letter, does think there’s money to be made in real estate. With prices so depressed in many markets, he says buying property on the cheap and renting it “is a prescription for making money.”

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Jim Rogers Says, Gold Will Hit $2,000 and USA Will Lose Status As The World’s Reserve Currency

Good Time To Buy Gold

Good Time To Buy Gold

Famed investor Jim Rogers is “quite sure gold will go over $2000 per ounce during this bull market.”Rogers’ confidence gold will continue to rally stems from a view the U.S. dollar is on its way to losing status as the world’s reserve currency.”Is it going to happen? Yes,” Rogers says. “I don’t like saying it [and] I’m extremely worried about it but we have to deal with the facts. America is not getting better [and] the dollar is going to be replaced just like pound sterling [was].”Rogers didn’t offer a timetable, and it’s likely gold would exceed $2000 per ounce if the dollar were to lose its reserve status.Still, “I wouldn’t buy gold today,” Rogers says. “I think I’ll make more money in other commodities, which are cheaper,” as discussed in more detail here.Among many others, Rogers is “worried about the fact the U.S. government is printing huge amounts, spending gigantic amounts of money it doesn’t have,” the investor and author says. “People are very worried [and] skeptical about paper money [and] looking for places to protect themselves. The best way is to buy real assets. [That] has always protected one during currency turmoil, and it will again.”

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Trading Wisdom of William Eckhardt

“Don’t think about what the market’s going to do; you have absolutely no control over that. Think about what you’re going to do if it gets there. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be.” – William Eckhardt

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Dollar Hits Two-Year High Against The Euro

“This is just another stage of the credit crisis,” said Birinyi Associates analyst Cleveland Rueckert.

“Now we’re seeing the effects in world economies of the trickle down effect of the last year and a half.”

The sell-off in commodities has hit gold, oil, base metals, sugar and grains and is tied to the soaring dollar. The dollar hit a two-year high against the euro on Wednesday as investors move away from investing in foreign markets and look to the dollar as a safe haven. Whereas earlier in the year many investors hid in commodities pushing prices higher than demand warranted, now there’s a big move to cash, Rueckert said. This hurts dollar-priced commodities, which appear cheaper as the dollar gets stronger.

The euro fell to $1.2886 against the dollar from $1.30, while the pound fell to $1.6208 from $1.6698.

Other currencies are also depreciating as central banks try to inject capital into their financial systems. The United States has been doing the same, but the dollar is still benefiting as a safe-haven play.

Gold (GLD) – SPDR Gold Shares

On 10/16/2008 – Bought GLD at $80 per share.

SPDR Gold Shares (GLD)

SPDR Gold Trust (the Trust), formerly StreetTRACKS Gold Trust, is an investment trust. The Trust holds gold, and from time to time, issues the SPDR Gold Shares (Shares) (formerly streetTRACKS Gold Shares) in blocks of 100,000 Shares (Baskets) in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. The Shares represent units of fractional undivided beneficial interest in and ownership of the Trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. The sponsor of the Trust is World Gold Trust Services, LLC. The Bank of New York is the trustee of the Trust. HSBC Bank USA, N.A. serves as the custodian of the Trust’s gold.

Silver (SLV) – iShares Silver Trust

On 10/10/2008 – Bought SLV at $10 per share.

Silver (SLV) ETF

Silver (SLV) ETF

iShares Silver Trust (SLV)

is a grantor trust. The purpose of the trust is to own silver transferred to the trust in exchange for shares issued by the trust. Each iShare represents a fractional undivided beneficial interest in the net assets of the trust. The assets of the trust consist primarily of silver held by the custodian on behalf of the trust. The sponsor of the trust is Barclays Global Investors International, Inc. The activities of the trust are limited to issuing Baskets of iShares in exchange for the silver deposited with the custodian as consideration; selling silver as necessary to cover the sponsor’s fee, trust expenses not assumed by the sponsor and other liabilities, and delivering silver in exchange for Baskets of iShares surrendered for redemption. The objective of the trust is for the value of the iShares to reflect, at any given time, the price of silver owned by the trust at that time less the trust’s expenses and liabilities.