Gold Outperforms... Everything

Lance Lewis  Nov 14, 2008 2:20 pm

Gold Outperforms... Everything
 
Yellow metal may be the only safe bet.
 

 

Fourth, we’ll look at “equities”, as defined by the S&P 500 (SPX).

The SPX has clearly been a loser in all fiat currencies (and even worse when denominated in gold at the bottom).  In reality, stocks have been in a bear market in “real” terms since 2000.  Thus, the longer-term trend remains bearish as well.


Click to enlarge

Lastly, we’ll look at the major fiat currencies themselves.

Other than than against the yen, the dollar has been a clear winner for 2008 and a multiyear winner against 3 of the major fiat currencies. Nevertheless, the longer term trend for the dollar remains bearish since 2000.


Click to enlarge

Conclusions?

The long-term trend of gold and “commodities” (as defined by the CCI) remains well intact, as does the bear market in the dollar and “equities”. The bond market is a little more difficutl to call one way or the other, but, since sovereign debt prices generally follow the currency that they're ultimately denominated in, the dollar’s fate will likely determine the bond market’s ultimate long-term trend, as will the trend of commodity inflation.

So, does one bet on deflation or inflation in terms of dollars going forward? I’ll leave that up to the reader, but here’s a final thought:

I may be somewhat biased as a long-term gold bull, but perhaps one should bet on neither, and simply bet on gold, given that it has outperformed “commodities” (as defined by the CCI), “equities,” and bonds over the past 9 years?

Just a thought.


Click to enlarge

Rate this article:  (0 Votes)
Comments (3) See All Comments »
11-14-2008, 2:54 pm
Great article.

With this data, you have made a great case that the economy of recent years has been built up on a shell of credit, and debt.

A few points:

Gold will not outperform equities, if one has compoun
Read More
11-14-2008, 2:54 pm
Great article.

With this data, you have made a great case that the economy of recent years has been built up on a shell of credit, and debt.

A few points:

Gold will not outperform equities, if one has compoun
Read More
11-14-2008, 2:55 pm
test
Read More
discuss this article and more on the mv exchange
Long a handful of intermediate and junior golds, as well as NEM, GFI, ASA, GDX, and GLD. Also long the TBT (2x short the bond market

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options.  Click here for a free 14 day trial to OptionSmith by Steve Smith.



The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2009 Minyanville Media, Inc. All Rights Reserved.

Ticker Talk
Popular Tickers:
SPX »AMZN »RIMM »
Select
  •  
Talk Now
Share this Talk on your site:
Send us your feedback

Our Professors

rss article alert