Tuesday, March 18, 2014

Marc Faber says "Buy low sell high"

Well basically, we had a huge run-up in prices starting in 1999, from $255 oz. to $1921 oz. in early September 2011. We’ve been in a correction period since.
Now, I think the correction period was partly justified because there was too much enthusiasm and too much speculation, leading to the peak in September 2011.

But I think that there may have been some market manipulation as well. My sense is that the correction has probably come to an end. If anything, the fundamentals for gold are much better today than they were at the time of the peak, but the price is down.

Every investor understands “buy low and sell high” as a principle, but when prices are low, nobody wants to buy. We had very negative sentiment recently.

Of course, we could one day enter a long-term downtrend after the long period of growth and asset inflation over the last 20 to 30 years.

But when I compare gold to the S&P, the S&P is up substantially since 2011 and gold is down substantially. If you compare the performance of gold shares to the S&P, it has been a disaster for gold shares.

When I look around at asset prices; real estate, bonds, equities, paintings, collectibles, vintage cars, I think the price of gold is actually one of the few assets that are relatively cheap, relatively inexpensive now.