 What about
Gold?
Richard Russell
snippet
Dow Theory Letters
January 31, 2005
Extracted
from the January 29th, 2005 edition of Richard's Remarks
Question
--
What about gold in this environment of "gradual inflation?"
Answer -- I never worry about
the price of gold. Gold is real money, and it always will be,
despite the efforts of the central banks to have you think otherwise.
Honestly, I worry about a lot of things, but I don't worry about
gold. How about gold stocks? Somewhere ahead gold is going to
take off to the upside, and that's where the gold stocks will
make up for lost time. Very frankly, I don't think the cycles
or Elliott or trendlines are going to tell us when gold is ready
to make its move.
My attitude
is that gold made its low in 2002 and recently rose to a 16-year
high. You decide how much gold you're willing to hold, and then
you forget it. Because inflation is wanted and needed in the
US, the long-term trend of the dollar is down. The dollar's decline
will be erratic, it will probably take place over years, not
weeks or months. Gold can be likened to a Picasso painting or
an autographed letter from George Washington or a flawless D-color
10-carat diamond. You just hold it. You don't try to get a quote
on it every week. You consider it the safest part of your wealth,
and that's it. What do you do with your gold? You leave it to
your spouse or your kids or your best friend.
Gold is true
wealth, discovered by expensive methods, brought out of the ground
by sweat and capital. Gold can't be manufactured out of thin
air by the Fed, and maybe that's the major difference. Nah, I
don't worry about gold, if I have to worry, I worry about my
dollar denominated assets. Now there's something that is legitimately
worth worrying about.
Remember, when
this bear market started I wrote that "In a primary bear
market, everyone loses, and the winner is the one who loses the
least." I'll stand by that statement, and this bear market
has hardly begun.
more follows for subscribers
. . .
Richard Russell
Dow Theory
Letters
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