BGEIX historic closes under 10.50 since beginning 2005.
5/26/2005 9.94 20 0.94% since the beginning of 2005 has been under 10
11/3/2008 10.45 28 2.26% since the beginning of 2005 has been under 10.50
Closed at 10.09 on its first day of existence 8-7-1988
All time high close 30.24 12-6-2010
Above through 6-14-2013
dates by year under 10.50
48 days closing under 10.50 since beginning 2005
WEAT has been making a multiple bottom since beginning of April--it may hold, may not--we'll see--the US$ made many multiple dollars in 2008 before it exploded up.
"it will be time to sell out gold holdings and go into the next undervalued class."
Spoken like a true contrarian--i say when the central bankstas are doing victory laps--fade the victory laps!!
I doubt it CL--Plosser is not one of Benron's buds.
"Already plagued by the ‘Too Big to Fail’ (TBTF) problem back in 2008, the regulators have now succeeded in creating a new, even more dangerous situation I characterize as MAFID, or ‘Mutual Assured FInancial Destruction.’ Because all banks are swapping and therefore holding essentially the same collateral, there is now zero diversification or dispersion of financial system risk. It is as if there is one massive global bank with thousands of branches around the world, with one capital base, one liquidity ratio and one risk-management department. If any one branch of this bank fails, the resulting margin call will cascade via collateral transformation through the other branches and into the holding company at the center, taking down the entire global financial system…
I continue to regard the risks of an equity market correction or even a crash as unusually high at present for a variety of reasons as discussed in previous reports. Whether this has started to unfold is, of course, unclear, but recent price action does suggest a trend reversal may now be underway.
As for commodities, these remain the cheapest they have been relative to equities since 2007. A few of them look a bit pricey, including crude oil, cotton and palladium. Gold, however, has been among the worst performers this year and with a volatility far above the historical average. While that might scare away those speculators playing in gold via ETFs and other paper instruments, it is also playing into the hands of longer-term investors who hold physical gold as a form of insurance against financial instability, monetary inflation and currency depreciation. The risks of and regulatory responses to collateral transformation should, in my opinion, only serve to increase the demand, and price, for such insurance in future."
from John Butler --posted in Financial Sense Blog
I am still accumulating BGEIX daily, CL. If you take the last 6 times gold stocks have been this undervalued compared to gold, average increase between 3 months and 4.2 years has been 221%. If you throw out the parabolic 1976 increase, the average increase of the other 5 times has been 155% in 3 months to 2.1 years and that includes increases even in the extreme bear market for gold in the late 90's. Whatever happens, happens of course, and it doesn't mean No. 7 has to be average, could vary either way but the smallest increase off these undervalued levels has been 52% in less than 3 mos.
I like the odds.
Robert Happek says:
June 3, 2013 at 10:20 am
One of the most popular arguments against gold as an investment is that the price performance of gold is no match for the long term record of the stock market. In other words, in the long run, the stock market gains more in value than gold does. This argument is a fallacy based on a powerful deception. Let me explain.
The basic question is how is the performance of the stock market measured? The classical answer to this question is an index of the stock market, for instance the Dow Jones index. The Dow Jones index is more than a century old, it is widely tracked and used. When comparing gold against the Dow index, indeed, it is true that gold can not match the long term performance of the Dow index.
But the Dow Jones index is not a truthful indicator of an actual investment into the stock market. That is because the Dow index is an average of a selection of stocks, a selection which is constantly changing. For instance, a few years ago, Enron and General Motors were part of the Dow Jones index. These companies went bankrupt producing spectacular losses to the their stockholders and bondholders. The Dow Jones index did not incur any loss because Enron and GM were quietly removed from the index and replaced by better performing stocks. So by definition, the Dow Jones index has a buit in survival bias by quietly ignoring losses in the stock market due to companies falling on hard times or going outright out of business.
A correct comparison between an investment in gold and an investment into the stock market needs to track a selection of say 100 stocks from 1910 on until today as a buy and hold investment. Comparing gold against trading in the stock market is not fair. Trading in the stock market should be compared against trading among a set of commodities like oil, silver, gold, fertilizers etc. I am quite sure that if trading in commodities is compared against trading of stocks, that commodities would outperform the stock market.
It would be extremely interesting (even from a research point of view) to actually track the performance on an investment into 100 publicly traded companies over a period of 100 years. The investment should be a buy and hold investment where no trading is allowed. Indeed, when looking at the composition of the Dow Jones industrial index 100 years ago, none of the names on that list exist anymore. Most of them went either out of business or merged with other companies, were bought out etc. I do not have the time to do this investigation, but perhaps somebody on this forum could investigate this questions thoroughly. In fact, this could be a very good subject for a PhD thesis in economics. I would not be surprised if the result of such an investigation would show that a buy and hold investment in the stock market has spectacularly underperformed a buy and hold investment into gold during the past 100 years.
Our host, Steve, has produced some excellent posts where he tracked the decline of ore quality, energy usage and production amounts of various mines producing precious metals. These posts give a very good insight into the true prospects of the mining business. Somebody should do a similar investigation of the true performance of an investment into the stock market over the past 100 years. Again, by investment, I mean a buy and hold investment and not a trading investment as represented by the Dow Jones Industrial index.
Modern societies have a strong bias towards survival. We do not care about history, we do not remember the dead, we do not care for the cemeteries. Similarly, we do not care for the bankrupt companies of the past. A failing company is quickly removed from the stock market (try to find the historic price record of the former GM stock) in order not to destroy the illusion that the stock market goes only up in the long run.
The Greatest Fundamental Reason to own Precious Metals--Input the phrase to the left in your browser--excellent analysis.
NEW YORK | Wed Jun 5, 2013 2:27pm EDT
(Reuters) - Demand for U.S. gold and silver bullion coins is still at "unprecedented" high levels almost two months after an historic sell-off in gold released years of pent-up demand from retail investors, the head of the U.S. Mint said on Wednesday.
His comments are likely to allay concerns among some traders that frenzied buying by mom-and-pop investors since mid-April after prices plunged to two-year lows had started to fade.
Their interest has helped prices recover to above $1,400 an ounce, providing key support to prices after institutional investors fled the futures market and exchange-traded funds.
"Demand right now is unprecedented. We are buying all the coin (blanks) they can make," Richard Peterson, acting director of the U.S. Mint, said in an interview referring to the Mint's suppliers.
The Mint, one of the world's largest gold and silver coin producers, may resume making platinum bullion coins after receiving requests from dealers, he said. It stopped making the coins in 2008 due to low demand.
(Writing by Josephine Mason; Editing by Maureen Bavdek and Cynthia Osterman)
We compared the price of a tonne (metric ton) of gold and silver ore from each of our companies to the price of Professional Blend Topsoil, EverBlack Premium Mulch, and ComTil Compost. After totaling each company's tonnage of proven and probable gold and silver ore Reserves and dividing it by their respective market cap, we got a price per tonne.
As of late April 2013:
Goldcorp Ore Reserves $10.26 per tonne
Topsoil $31.74 per tonne
Compost $49.59 per tonne
Mulch $88.16 per tonne
From Bullion Vault article 6.4.13
"I don't want to burst any bubbles"--Bursting of the bubble to worry about now is the equity bubble--that would send money back into the long bond--in fact commercial traders are buying the long bond now. We may see 120 again for TLT before we see 90.
"Gold And Silver In Constant 1920 Dollars--Mark Lundeen " Put that in your browser. Interesting perspective on where gold and silver are now in constant dollar terms. It looks like gold is sitting right at the same point it rallied in 1976. Not saying we can't go lower--but to go significantly lower than $5 in constant 1920 US dollars coupled with gold miner pricing lower than anytime since the 1940s is a powerful incentive to accumulate BGEIX. I don't know how long we will have this opportunity, but at these prices and lower its hard to imagine in this age of confetti currency printing that you could go wrong. If it takes 6 mos. or 3 years to double, as has been chronicled in 2x BGEIX posts, from the ultimate low (10.40--May 17 2013 so far) its a buy and if it should ever get below 10 again, its load the boat time. Remember we have been below 10 (constant non-dividend adjusted terms) less than 1% of the market days since the beginning of 2005.
"if the fed has to get aggressive in raising rates. "
Inflation got up to close to 20% in the late 1940's and the fed capped long rates at 2.5%.
1:5 reverse split at close 11-9-11. Since TMV has significant price decay because of leverage (3X), it would be hard to project, since timing of a drop or climb in interest rates is not know precisely.
Bruce, i've been buying into the weakness, mostly through BGEIX, which acts like GDX. I do have positions in GDXJ and GLDX also. I am ready to accumulate if gold does another leg down, but would rather see it recover from here :). Since commercial traders are buying the 30 year bond again, we may get an upswing in TLT up to 120 or so. It may prolong the gold bargain period for another month or so. But no magic eight ball here--that's for sure.
What if Larry LaBorde If you can type that in your browser and interesting article about the possible future of the present reserve currency in light of German repatriation of gold announced earlier this year.
what if Larry Laborde--type that in your browser--especially interesting in light of Germany's decision earlier this year to repatriate its gold from the USA. I'd link it, but Yahoos don't like links.