I was reading a blog, http://globaleconomicanalysis.blogspot.com/2009/03/gold-hui-looking-good.html. I don't understand Fibonacci analyses so I don't know how this analysis relates to reality. Can anyone help?
I am so sorry your wife has a neuro-muscular disorder.With funding increasing for stem cell research, hope and pray that stem-cell tranplantations will be a viable treatment in the near future .In the meantime, I see a loving, caring husband taking great care of her.
The way that I look at my trading and sometime investment activities is: (1) Always preserve your capital because in a worst case you might have to live off of it for the rest of your life and (2) always exploit significantly any real market opportunities that involve significant mispricing of asset valuations. I loved periods like March 9th because the markets had discounted by 150% the effects of the economic crisis and I hate periods like the current one in which valuations are pricy but perhaps not pricy enough to be called overbought.
There are several other reasons why I am more serious than your average poster other than the simple fact that I have to trade and invest to eat: (1) I manage a lot of money and (2) my wife has a late onset progressive neuro-muscular disease--the sort of condition that could easily consume huge amounts of assets over time. So, I am very highly motivated to thoroughly understand what I am doing and to make sure that both fundamental and technical ideas have been pursued just as hard as I can do so.
We've had this conversation before, but I continue to be amazed at how little money food costs. I am a thrifty shopper, I must admit and always have a keen eye for a budget cut of meat but the bargains almost always abound at our local market. Yesterday I bought a nice unsplit chicken breast of about a pound and a half for $3.25. Most days of the week, I can find some leanish cut of beef that I can marinate as "London Broil" for $4 per pound.
If I want to splurge, I do pay. My favorite, a three inch thick ribeye from a real butcher who only handles high quality product and cuts it perfectly, costs me $32 for special occasions.
Fruit has been particularly cheap this summer. For the last week or so my local supermarket has been running specials on cantaloupe at a buck apiece. I now have six of same ripening on my kitchen table. Southern peaches got as cheap at $1.09 a pound and made wonderful sorbet. Pineapples occasionally dip down to $2.25 each, etc. Americans complain a lot but one thing that they shouldn't complain about, under pain of being shot at sunrise, is the US food distribution system. Farmers and ranchers on the other hand probably have a lot to complain about in that regard.
Chickens may be the answer. Cattle on feed are at their lowest rate in many years and this years calf crop is the lowest since the 90's but the price has barely budged. When the consumer gets pinched, steaks go out of the budget.
Forget the high math, just look as some of the data.
Mine production : Peaked in 2001 at 2645 mt/y. Currently around 2360 mt/y . During this time the gold price went from less than $300 to where it is now. Much of the easy, rich, cheap to mine ore has been mined.
Gold in storage: The largest reserves are USA, Germany, IMF, France, Italy, and Switzerland. These countries together have around 21,000 mt. Traded mutual funds have around 1,000 mt. The US Fort Knox hoard (8,113.5 mt on paper) has not been physically inventoried since Eisehower´s day and it is not known how much, if any, has been sold off to make the deficit look better. Crook´s opportunity.....gold weighs 19.3 grams per cubic cm and tungsten weighs 19.25 grams per cubic cm. Would you like to buy a nice 1000 gram gold plated tungsten bar for only $29,000 ? Looks great. Only a few left !!! As is !
Central banks make paper loans of gold. It is rumored that some of the loans exceed the gold on the books. What is known, the British sold off much of their gold when it was dirt cheap. This deal was done, i think, by their present PM:
Bottom line:(1) A central bank can sell, or appear to sell, or loan, a years mine production if they so please and totally skew the market. (2) Several countries with massive reserves of US $$$$ are increasing their gold reserves. (3) Europeans are buying bars and coins and storing them. and (4) Much gold mining is expensive wrt initial investment and production cost per ounce.
I am long term bullish on gold and prefer mining stock rather than metal in the safe deposit box. Short term, I have no idea. Good investing.
I tried to post you a link to a wikipedia article on fibonaci numbers and technical analysis but yahoo is eating my posts again. Go to your search engine and type in Eliot Wave principle wikipedia and then click on the Fibonaci series item in the contents. There is nothing wrong with either idea, incidentally, but its much easier simply to look at the chart patterns themselves.