The Apocalypse
is not scheduled for Tuesday
Bob Moriarty
September 30, 2002
Even though it may seem that way.
If you have been casually watching the tech stocks lately, it
must seem as if the Apocalypse is on the way. If you actually
own the bleeding things, it must seem as if the Apocalypse is
actually here.
10 days ago, I
warned of a pending waterfall decline in the stock market
and how it might affect gold and gold shares.
It's here and it's now.
If you look at a chart
of Nortel it looks as if the stock fell off a cliff. This
isn't the action of people shorting the stock, you can't short
a stock at $.50, it's the action of people dumping the stock
regardless of everything positive about the stock and concentrating
on the negative. Certainly Nortel has problems, but is the company
really worth less than half what it was worth 18 days ago?
Apple is
selling for $14 and change. The company has $12 per share
in cash. This is the lowest price for the stock in real terms
since they went public and they are making a profit. Isn't Apple
worth a little more than $2.75 in real terms?
And Lightpath is a wonderful
example of the sheeple
in action. The company has $13 million in cash and a market
cap of $8 million. Shareholders could show a profit if the company
closed the doors on Monday.
The airlines plummeted on Friday
with some of the stocks down 20% on the day. Regardless of how
overvalued the market is and how low we believe it will go eventually,
nothing on earth can rationally change the value of a company
by 20% on one day, only the price.
Baby Bush and his flock of
lawless Chickenhawks are certainly doing their very best to speed
up the date of the Apocalypse but take my word, it isn't coming
Tuesday. But to those few brave individuals who held on to their
tech stocks all the way down, the end is at hand and the sheeple
are dumping stocks to beat the band. It's capitulation time and
if you want to see how it will play out, go back and find a chart
of the Dow for May of 1970.
This isn't THE BOTTOM, it's
just a bottom. The Bear has years more to run. But remember that
the greatest market advance in history was from July of 1932
until June of 1933. I believe that's exactly where we are.
What should gold investors do?
I'm glad you asked that question,
I was about to suggest you proceed with great caution. Many gold
stocks have dropped 10-20% just as I predicted 10 days ago. They
easily could go lower but overall, the gold shares have been
correcting since July. I personally would look to buy some favorites
as the price gets any more attractive. I am not saying sell but
if you fear a major break, you might at least want to lighten
up.
Physical gold on the other
hand and silver are way overbought and the COTs are giving a
great danger signal. The open interest on gold increased
by over 23,000 contracts last week. Gold is at extremes of
emotion only found at major tops. I would be a lot happier if
gold and silver prices dropped by 10% over the next 2-6 weeks
in anticipation of much higher prices down the road. But for
now, be warned. Gold and silver are at an extreme of emotion.
-Bob Moriarty
September 30, 2002
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 321gold Inc Miami USA
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