If the markets are reacting to the Denial and Stigmatization phases of this coronavirus event, then the next transitional phases are… by Chris Vermeulen of The Technical Traders A very […]
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Seeking Alpha/Krystof Huang/4-18-2020
“Be clear about why you buy gold. To get rich? Or to be safe? Many investment writings will conflate these issues. If profit is the primary goal–then like anything else, you must buy low, sell high. And for which, at any given time, there are likely to be a number of investments with stronger current trends than gold. Or – sometimes –perhaps the ones who are always saying ‘this is the time for gold’ are correct. But gold investing is never a sure-fire get-rich scheme. It is safety that is unique about gold. So beware of gold strategies that emphasize profit more than safety.”
USAGOLD note: Huang offers a good refresher course on how to go about gold in times of economic, social and political uncertainty. Not all the advice is sound, but most of it is. Telling investors to “never to pay much more than spot value”, for example, indicates limited knowledge as to how the physical market really works, particularly in times like these when premiums over the spot price are running at very high levels due to the mint and refinery closures, mine production stoppages, etc. Keep in mind that what you read at the link is one person’s opinion …… One thing with which we agree wholeheartedly is the snippet posted above.
Image courtesy of Visual Capitalist
CNBC/Steve Goldstein/4-20-2020
“The U.S. economy will probably fall at an annual rate of around 20% in the second quarter, and will fall further in the third quarter. [TS Lombard chief economist Charles Dumas] said the firm’s modeling suggests earnings per share will fall about 20% and 30% this year. Giving the S&P 500 a price-to-earnings ratio of about 16 for a ‘reasonably depressed environment,’ leads to an S&P 500 below 2000.”
USAGOLD note: Then there’s the possibility of even worse if the economic environment becomes unreasonably depressed. Widely-followed analyst Howard Marks came down with a similarly gloomy stock market assessment yesterday saying “We’re only down 15% from the all-time high of Feb. 19 … It seems to me the world is more than 15% screwed up.”
