Well, I missed this year’s runup in gold. Looks like I’m an idiot:
But then I look at the ten year chart. Gold has been in a serious bear market for several years.
Should I jump in now? The theory is gold moves opposite to stocks. If I believe stocks are going lower, then I should buy gold. The Economist just did a piece that sums up the issues.
Investors are cautiously returning to a fickle market
THE Valentine Day’s special at Sharps Pixley, London’s first high-street bullion showroom, is a £115 ($166) rose dipped in gold. But what that special someone would really want is the £27,000 “kilobar”, smaller than a slab of chocolate but reassuringly weighty in this time of turmoil in financial markets. Both have sold well since the shop opened last month, says Ross Norman, the boss. Yet he is struck by how “apologetic” his British clients are about buying gold. It suggests many are novices, gingerly placing their first bets against the global economy.
They are not alone. From libertarians in America to Indian housewives, gold’s fans have helped push spot prices up sharply this year, defying the rout in global commodity markets (although gold also defied the prior boom in commodities-see chart). In early trading on February 11th gold surged above $1,200 an ounce, its highest level in more than eight months, amid a big sell-off in global stockmarkets. Mr Norman notes that January rallies in the past two years quickly petered out, partly for seasonal reasons: retail buying in the biggest markets, India and China, starts with the Hindu Diwali festival in late autumn and ends at this time of year with Chinese new year. He says the rally is still tentative, though this year “it has a bit more oomph.”
Fear is one source of oomph. One Swiss-based bull likes to call gold “a hedge against ignorance”, noting the myriad question-marks hanging over the global economy. They include the strength of China’s economy, the impact of falling oil prices on emerging-market producers, the debt woes in America’s shale-oil industry and the fragility of global banks. What’s more, the dollar-which rivals gold as a haven-has also weakened recently.
Other factors have been on gold’s side. Its recent rally has coincided with falling oil prices and renewed fears of deflation that have pushed down interest rates. Because gold offers no yield, the lower the returns offered by alternative investments such as bonds, the more attractive it looks. The move by big central banks to impose negative interest rates on commercial-bank deposits makes gold an even more attractive store of value-the shiny equivalent of cash under the mattress.
Supply may also help the bulls’ case. The World Gold Council said on February 11th that the amount of gold mined in the fourth quarter of 2015 was down by 3%, its first quarterly drop since 2008. It expects the trend to continue as cash-strapped mining firms trim investment.
The demand picture is more nuanced. Overall, global demand dipped slightly in 2015. But Indians vastly increased their holdings of gold jewellery in the second half of last year, befitting one of the world’s fastest-growing economies. In China, shoppers bought fewer gold trinkets but more gold coins and bars as investments, perhaps reflecting concerns about their falling currency and stockmarket.
This year the latest data suggest there has been a net inflow of funds into gold-related exchange-traded funds, which are investment vehicles that account for about a tenth of global gold demand, says the World Gold Council’s Juan Carlos Artigas. He expects buying by central banks in the developing world, which surged in the fourth quarter, to continue as they diversify their assets.
Sceptics — -among them Goldman Sachs, an investment bank-nonetheless argue that gold will fall for a fourth straight year in 2016, largely because of higher interest rates in America. On February 10th Janet Yellen, chair of the Federal Reserve, offered a downbeat assessment of the American economy in testimony to Congress. Though she still left the door ajar to further rate rises, stockmarkets and the dollar reacted negatively, while gold rallied. The more pressing financial fears become, the higher it is likely to go.
Random things learned about LED lights.
+ They save huge on electricity bills. Figure 70% to 80%.
+ They save huge on heating. Figure 90%.
+ They should last 25 years. No one knows how long. Their “long life” means they’re ideal for hard to reach fixtures — like traffic lights.
They have drawbacks:
+ They often give out a lot less light. The wattage rating is irrelevant. Check the lumens.
+ Their output color may not be pleasing.
+ They cost a fortune. You may never recoup their added cost in electricity savings.
+ Don’t believe they’re “dimmable.” Some are. Some aren’t. Some need special dimmers to be dimmable — not the normal ones you have on the wall.
Same old, same old
Stop falling down stairs. You can fall down three stairs and break little bones in your foot, and be in a mess for months.
Going down is the most dangerous.
The worst stair is the last one.
The last stair is always higher or lower than the others. Hence, it’s a hazard.
Call cell phones twice.
The first time the person you called will be fishing his phone out of his pocket, or wherever. He’ll miss your call. The second time you call, he’ll answer.
CHECK. CHECK. CHECK.
I’m looking at a $101,000 proposal for new LED lighting technology we need. Beautifully done proposal. Reasonable payback.
I Google the principals of this small firm. One of them was sent to jail in 2011-2012 for running a Ponzi scheme — to which he plead “guilty.”
I called him at his new LED lighting firm and gently raised the issue.
He said I shouldn’t believe everything I read on the Internet. (I don’t.)
I asked had he been to jail? He said “he served his time.”
End of that discussion. He steered the conversation back to the topic at hand — his company’s proposed LED lighting installation.
It was bizarre.
Always check air fares on different days.
They vary like crazy. From reader Lucky Marr.
I booked our Delta flights to Nova Scotia on January 4th for May 20th (I always book early when possible). The 1st Class fare was $595.36 one-way.
There was a change in our flight and I had heard there had been an increase in fares (stupid with low fuel costs) so I checked the exact same flight for the exact same day and the one-way fare was $1839.00 one-way.I just checked again today and the exact same flight for the exact same day is now $589.00 1st Class one-way.
However, if you leave 3 hours earlier with 2 stops the fare is $3138.00. They all connect at JFK to the exact same flight arriving at the exact same time in Halifax.
Ironically, we are flying free anyway using the $600.00 each coupons we received for stepping aside in Miami last spring, where they put us up for the night, fed us then upgraded us from Economy Comfort to 1st Class MIA/ATL/PHX.
Some tasty (?) humor
Harry Newton, who’s coming back to New York tonight on JetBlue. Why tonight? Last night was more than twice as expensive.
I never make recommendations on whether the time is right to buy gold stocks. It never works out.
I buy and sell them on mental (actually written down) stops but one never knows what will happen next week
LED lights can and do work with dimmers…read the fine print first…I just bought two 6-1/2″ ceiling lights that work on dimmers from http://www.lampsplus.com/ Also, they can be used in ceilings with insulation. Be careful if replacing ceiling lights in insulated ceilings…no one seems to know why but many are not recommended for such use. I bought 12v LEDs (on line) for my RV at a very reasonable price…they work great.,,should work in your car as well.
I believe I also suggested to you just prior to the FED interest rate increase that gold might go up …it did…maybe not a huge amount but enough to make a few shekels, as you might say…