Cramer Says to Buy Gold

Noah, it was a very nice break out for gold this week. I was waiting for it to break its down trend line and jumped on. I believe the markets are rightly concerned about all the paper that's being issued by most governemnts in an effort to liquify their financial systems. The long term charts for AU look very strong to me.

With respect to bonds, I believe the markets' concern is again, the massive amount of new supply that's coming over the next several years. The US Treasury will issue $2 and perhaps closer to $3 trillion this year alone to fiance the deficits, programs and bail-outs. Federal deficits (ex stimulus packages & bail-outs) should remain at $1 trillion plus over the next several years. Ditto record deficits for the foreign industrialized nations. The bigger question is, who will buy all this paper and what price will be required to clear all the new global supply. This has been a concern of mine for quite some time. I would not be at all uncomfortable shorting the long bond. :)

I was persuaded by UD's argument regarding Gold as an investment several weeks ago, and began building a position in GLD. Clearly I do not have the actual bullion, which is both hard to get, and in my view impractical when you consider that the government could confiscate it as they have in the past, and if we truly need gold to barter, things will have deteriorated to the point that things other than gold coins (guns, ammo, food medicine) will be more valuable.
So, my question is, do you agree that GLD is a good way to exploit the investment opportunity of gold, or is it merely a sham since there would be no way for me to gain any possession of actual gold from this etf if I ever wanted it.

mh23, I also have the GLD. It seems to historically track the cash market very well and lets hope that correlation continues.

I also have ABX, the Canadian gold miner which has been a very strong performer over the past several months. It's management team has an excellent track record plus I'm familiar with the company. However, there are operational risks with any mining operation and the reason I prefer the GLD which removes that risk from the equation.

The only mining stock I own is FCX. I took a position at 31 and have felt no need to add to it, but as you know, they are big Copper miners, so I don't own them as a way to gain exposure to gold. I agree with you on GLD, as an investment vehicle, it seems like the best way to get exposure to the Gold market without actually trying to buy gold, which as I said before is difficult and impractical. I don't know where this is heading, but I do believe that 1500-2000 is certainly possible. The economic arguments regarding its future viability as a currency are interesting, but for my purposes, besides the point. It seems that enough people will view gold as something worth owning, which will drive up the price. If it hits 1500 I will sell at least half of my position, and if it goes to 2000, I will probably sell the rest, unless I feel the momentum is there to carry it higher. I stopped buying stocks a few weeks ago, because I now think the market could easily hit 600. The only company I totally lost faith in and dumped was BAC. Everything else I am still holding on to, and I will buy more if we substantially breach November's lows.

mh23 - I bought a gold bar from: http://www.mtbcoins.com/

http://www.urbandigs.com/2008/11/get_out_vote_gold_advice_anyon.html

100G, back in early NOV at about 745/oz, the cost for me was 754/oz, or $9 over spot. He would only sell me one bar, he had two only, and for cash only. I rub it every day, it sooo cool!

Anyway, GLD is basically a receipt for actual bullion held in a vault. So, I think its a good way. If your that worried, go to GOLDMONEY.com and setup an account and buy there, for storage and some other fees.

"I think the HF world will also jump on the only trade that is working, gold, and give it ummph"

Urbandigs - I think you're attributing too much sophistication to the buyers of gold at the moment. Hedge funds largely have been in it already (to the extent they're in it at all), and now gold is to many of the folks I talk to simply a momentum play.

See, many of those who bought into the currency debasement/printing money/high inflation theory have been long gold already. Einhorn has actually been in the trade for some time. (Sort of makes sense, given that he's talking his book now).

From an economic theory standpoint, that debate has already been had and positions taken. And believe it or not, the economists I have heard recently (I was at a panel discussion this past week) are not really concerned about inflation. These are smart guys, and the discussion included much talk about quant easing, expansion of the Fed's B/S, etc. etc. But they really aren't worried at all. Fascinating discussion, and I'd be happy to share details, but too long for right now.

My take, though? I think gold will run up.

Why? Not because of underlying economic arguments. That train left the station some time ago among the thinking. Not because of hedge funds.

Because of the retail buyers. With all due respect, when I come on this board and read posts from all these folks about how they're buying gold, it's the equivalent of the shoe-shine man and cab driver talking about it. And believe me, when I hear friends of mine who are not in finance and don't understand economics talking about it, I know it's a momentum play.

So it will run up. Not sure how much, but I'm now thinking about where/when to exit. Which is what you gotta do when momentum takes over.

I agree, and I know many HFs that have positions in it already. But trust me, if it starts running, the momentum trades will placed on top as well!

PS: I posted on this thread way way long ago, and the reasons why I put my trades on. But I hear what your saying. Everytime I see a TV ad or a Print ad to buy gold, I think the same thing!

yournamehere, to trade commodities successfully, folks that I know plus your truly, rely on the black art of technical analysis. In this market, it's about the only tool that seems to work, at least for me. There are way too much economic cross currents and too many expert opinions to rely solely on fundamentals.

I was on the gold trade beginning a couple of years ago and exited the position a few months ago as the $1K barrier seemed to be a major sticking value area at the time. Today, the market seems to have completed a multi-month correction/consolidation without disturbing any of the long term uptrends.......very normal for bull markets regardless of the asset class. I don't much listen to media or economists for investment suggestions but do listen to the message of the markets.

I will say this, there is a growing lack of trust out there by quite a few investors for paper asset whether it be equities of fixed income. I think you might agree that they have darn good reasons for this.

"I will say this, there is a growing lack of trust out there by quite a few investors for paper asset whether it be equities of fixed income"

Are you saying that a fundamental flaw with equities and fixed income is that they're "paper assets"? Not sure I follow this argument. Sound like a new one to me! Did you really mean to say instead that there's a lack of trust in the dollar/paper currency? That would make more sense as a statement.

See, the debate to focus on is gold vs. the dollar. Plain and simple. If I buy gold, it's as an alternative to my cash dollars, not as a speculative trade compared to equities/fixed income. I make decisions regarding equities and fixed income on their own merit, without regard to gold.

So as far as trust in the dollar is concerned, you have no idea how many discussions I've had with folks in finance, industry, academia and otherwise regarding the dollar and inflation. As I suggested above, the ones who BEST understand how the Fed works and what quantitative easing is, and what the Fed and Treasury are doing - in other words, the economists - are the LEAST concerned about any prospect of inflation. The people who are MOST concerned make a simple observation, i.e., that the Fed is printing money and the Govt is stimulating the economy, and reach an imperfect conclusion, i.e. that it will lead to a destruction of paper currency.

I'm not saying gold is not going to keep rising. On the contrary, I think it will. All I'm saying is that I believe those piling in right now don't really get it. That makes it a momentum play. And that's why you need to think about an exit point.

>Are you saying that a fundamental flaw with equities and fixed income is that they're "paper assets"? Not sure I follow this argument. Sound like a new one to me! Did you really mean to say instead that there's a lack of trust in the dollar/paper currency? That would make more sense as a statement.<

My premise is simple- global equity values have collapsed as have numerous fixed income securities regardless of their credit rating. These are all paper assets which is what the majority of investors have accumulated specially through 410K plans. How many long term investors have not had their heads handed to them in the past 5 quarters? My point is that the appetite for paper investments (non tangible) has lost much of its luster. I was not addressing the currency factor.

With regard to currencies, I'm bullish on the USD and have been for many months (ex versus the Yen) and have stated so repeatedly on this forum. Again, regardless of what all these experts state, what I see are trends and market behavior.

>As I suggested above, the ones who BEST understand how the Fed works and what quantitative easing is, and what the Fed and Treasury are doing - in other words, the economists - are the LEAST concerned about any prospect of inflation.<

I haven't spoken to the vast number of experts that you have but I also believe the probability of inflation for the foreseeable future is remote at best. I have stated this several times on this forum. My conclusion is based simply on the message of the financial & commodities markets. I see nothing but deflation across the board. There is no need to guess when the deflation trends will begin to reverse.....the evidence will become evident in the behavior of the financial markets.

>I'm not saying gold is not going to keep rising. On the contrary, I think it will. All I'm saying is that I believe those piling in right now don't really get it. That makes it a momentum play. And that's why you need to think about an exit point.<

All bull markets are momentum plays regardless of asset class. Also, all bull markets end at some point and become momentum plays for short sellers. Remember the "buy now or be price out forever" thesis for Manhattan real estate? Exit points in bull or bear markets are not as complicated and most folks make it out to be assuming one understands the application of technical analysis. For example, a very simple rule for 401K holders-sell when the S&P 500 violates its 200 day moving average on a weekly or monthly close and reinvest when the market stabilizes above it. This simple rule would have kept folks out of every major market collapse early and at the same time given the upside of bull markets.

serge07 - I don't disagree on inflation, USD or the phenomenon of timing bull/bear markets. As for technical analysis, I'll leave that to you. Not my gig.

"These are all paper assets which is what the majority of investors have accumulated specially through 410K plans. How many long term investors have not had their heads handed to them in the past 5 quarters? My point is that the appetite for paper investments (non tangible) has lost much of its luster."

Not sure I'd reach any conclusions about the appeal of an asset class simply because it's in the form of paper (or electronic) securities. "Tangible" assets took as much of a fall during this crisis. Kind of a bizarre characterization.

Quantitative easing by the Federal Reserve: I fully understand what their objectives are mainly, to artificially push rates below market rates. Price control is I believe may be a better term for their action. It may work for the short term but I wish them all the luck in the world in fighting market forces over the long term.

However, the announcement by the Fed to purchase some $800 billion of mortgage securities did make PIMCO's Bill Gross a boat load of money as well as for his investors.

>"Tangible" assets took as much of a fall during this crisis. Kind of a bizarre characterization.<

yournamehere, you are correct. I was trying to differentiate in my statements above between tangible & non-tangible assets and did a poor job of it. Tangible assets (mostly industrial metals and construction aggregates) have collapsed as well due to the steep decline in manufacturing demand. AU thus far, is the only tangible asset that I'm aware of that has survived the sell off.

mh23, I'm holding off investing on the long side until at least the second half of the year the exception being, short term i nature. Too many issues remain outstanding with regard to the banking system, new government policies (very concerned about the secret ballot initiative & impact it may have on the markets), ballooning issuance of Treasury debt & global debt, poor corporate earnings/outlook plus disappearing dividends & share buy backs to name a few.

Zero financials for me which I never cared for anyway even during bull market cycles.

I do like FCX over the long haul but the Phelps Dodge acquisition is a bit of a snag for them during this economic contraction. Ex PD, the gold content of their business would have been far less diluted. However, I would rather own shares of FCX over any financial out there. Their management team is excellent and have a terrific track record of replacing reserves.

Yournamehere essentially made the argument why I started building a position in GLD a few weeks ago. Whatever the economic arguments may be, the fact is that this particular asset class is poised for a run up, not unlike a new condo in an emerging neighborhood. Too many people now view this as the next place to make money, and this time, unlike real estate, they can get in and out rather quickly with low expenses. My entry point is low enough that I believe that I will make a nice profit at some point as this asset goes up. With my luck, I will be too early rather than too late when taking profits, but that is not a problem for me.

UD, I'm not really worried in the sense that I want to own gold, because I don't. Rather, I am minimally concerned that the ETF GLD has the credibility to be reliably used as a vehicle to invest in gold. The reason I don't want to own gold has to do with the fact that, if society truly devolves to a point where gold coins are need to buy things, it will be too much work having to worry about securing it. I realize that this is really far-fetched (I hope), but if things get that bad, I will have other things to worry about than protecting my actual gold.

I agree serge, I got caught in a value trap with a lot of my positions. I don't really mind because I had a long-term view as to when they would hit their target, but that being said, no one likes to over pay. The one sector that has done well for me is finished food product/consumables, CAG, KFT, PEP. If I see a panic sell that drags these companies down appreciably, I would probably add a bit more. I like some of the utilities as a long-term defensive position, but I would rather wait to build positions until after we get some more data as to how bad this recession is going to get.

And the condo metaphor harkens back to the early days of the housing bubble.

looks like GOLD is about to break out to new highs. Only $50 away! Stevejhx, has your feelings changed at all since we first discussed this topic about 4 months ago?

Ill repeat, I view gold as money, and I view the gold trade in response to the debasement of all fiat currencies and gov't meddling with markets to deal with debt deflation. Hyperinflation, ehh, not so much. I dont think the gold trade will be about hyperinflation.

The surging price of gold/silver, when price of copper still is falling, tells me the markets lack of confidence in paper money or the governments ability to solve this problem. Its a race to debase.

agree with you urbandigs unless market puts a double bottom today (testing Nov lows now).

I probably have no business buying gold if I have to ask the following basic questions, but I haven't been able to figure this out on my own. If you buy a kilo bar which would be around 32,000 how do you know you're getting real gold--do you ahve to take it to be appraised like a diamond purchase or do you just rely on the certificate you get? More importantly when you go to sell, what will you have to do? I know urbandigs says that he purchased from MTB and they will buy back their own gold, but what would they require if you brought in gold to sell that you didn't purchase there?

Thanks

dmf13... just make sure it's a kilo not a "broker" kilo... plus or minus 30%...

OBTW... one of my close friends worked for a major bank in its gold trading desk... I'd say... should I buy gold? He'd say.. ."hell" if I know? w67th.. there are only two types of people that should be trading in this product... the producers and end users.. .everyone else is just in vegas... :)

Well I only bought a 100g bar, for 2400 in cash from the dealer and it came with its certificate from PAMP Suisse, and they do buy back their bars for spot bid.

My main investment is in GLD stock/calls, and DGP in my portfolio. I dont know much of buying physical gold, just wanted to do it once and have some in my possession. I know coins have a huge commission markeup, so bars are better. Thats all I know. My position in gold was from mid 2007 to Fall 2007 or so. Average is prob just under $700/oz. Entry at this point is a bit risky, because nothing goes in straight line and it looks like it is about to bust through highs, and you may see big positions take profits.

I believe that physical gold ownership is subject to unattractive tax consequences. I believe gold is treated as a colletable and thus subject to a tax of up to a maximum of 28%. Accordingly, I've generally preferred to use GLD in an IRA Rollover account.

Should be "collectible."

Hypothetically, if we weather this financial crisis without any major fiat currency failing, do you think gold will go up or crash down? If fiat currency can survive this "once in a century" crisis, it pretty much means gold is permanently obsolete as currency (something I clearly believe to already be true).

tech_guy - well there is plenty of wishful thinking there, but I guess it could end up being the case. Either way, gold so far has proven to be not only a capital preservation play, but a money maker as many got destroyed holding equities that plunged.

Its a silly statement though. Gold may go to 1400, and then fall back down when the crisis eases. Ill be way out by then, so does that mean you were right and those in the gold trade for the right reasons were wrong?

Its not that I view it as a currency, I view it as money in the sense that fiat currency everywhere is being debased. I did not own gold before mid 2007, and only bought it because of the potential crisis that me & and a few of my close ex-trader friends thought was coming in MAY/JUNE of 2007. As things progressed, I believed more and more that it would play out that way and bought more.

Talk of weathering a financial crisis right now is silly, not saying you are silly or your statement is silly, just that right now with things the way they are, you never know what news you may wake up to that is destructive! Hence gold. Most of the deleveraging is out of it by now, and it appears gold will now do what it prob should have done last year when fear levels were higher. Not that fear levels are not high now. But reality is sinking in that this crisis is as deep as some bears were arguing, and governments everywhere are debasing/printing to stimulate their local economies. Who can trust who? What paper money may be worthless? Who may crater? Questions that will soon be answered.

stevejhx, mh23, serge, MMafia, techguy, sgbhan, nicercatch, faustus, what upppppp!!!

wheres spunky?

thought Id bring up some old school streeteasy

Gold is at 1161. I believe it has a great deal further to go. Thanks for posting.

U.D. Nice piece. The huge amount of government debt that must be financed along with the high probability of the gov't printing it's way out of it's obligations does not augur well for Treasuries. The secular bull market in treasuries is over!

I'm looking into gold and am really confused about how to buy it but don't love the idea of the ETF. I'm looking at the Perth mint in AU but don't know whether to do certificates or have it physically stored. It sounds like a safe option but I admit I don't really know what I'm doing. Can someone help me?

You could buy physical bullion in Kilo, 100 oz, 400 oz bars from a dealer, and store in your bank vault..

My husband said do the opposite of what stevejhx said, so I bought gold, and I've done well enough that more more thousands of people have touched me.

ahhh, I remember this old post

I can't believe stevejhx was wrong. That really shocks me.

FLMAOZ JuiceMan

LOL! Gold is at the $1250 handle...

LOL! Stevejhx said to sell gold. It keeps going higher and higher...

but...what did you say? are you on record?

I wrote a letter to CNBC.

hilarious.

i wote a letter two.

Gold was probably the single best investment class over the last ten years...

Shena Tova!

My my my. RS, Juice, take posts from 2 years ago - after which gold sank, btw - and discuss it as if I had made that post yesterday.

You're wrong about everything else, & now this. How sad.

so...when you said to sell, you meant to sell for a month and then buy and hold?

Bullion for immediate delivery advanced as much as 0.5 percent to $1,293.35 an ounce, before trading at $1,289.75 at 3:45 p.m. in Singapore. Gold, which often moves counter to the dollar, has advanced about 18 percent this year and is heading for its 10th annual gain.

http://www.businessweek.com/news/2010-09-22/gold-climbs-to-record-silver-jumps-to-30-month-high-on-dollar.html

I hear the price of tulips is rising simultaneously.

And the price of real estate in the Inland Empire.

And Florida.

Please.

Yeah, I remember that episode that Cramer said to buy tulips.

And Tim Seymour said to buy real estate in the Inland Empire. Or wait, was that Shanghai? So confusing to keep track of what these guys say and then do the opposite.

How much was gold 2 years ago when Cramer said to buy it and stevejhx said to sell it because Cramer said to buy it?

Gold traded in a range of 712.30 to 1002.95 in 2008 with an average price of 872.40.

Every dog has his day.

10/05/10 current price: 1340.23

History is history. I am long GLD and GDX but feeling a bit nervous at these lofty levels. So the more interesting question is whither gold today? - rather than a silly piling onto Uncle Steve.

Like all bubbles, the seeds of it's destruction increases exponentially as price increases above 'rational' clearing price.

So in the immortal words of a bygone philosopher
'do you feel lucky, punk?'

"Like all bubbles, the seeds of it's destruction increases exponentially as price increases above 'rational' clearing price. "

If you can't figure out when to buy, what makes you think you can figure out the 'rational clearing price'.? Like everything else, you don't have a clue. Here's one...

"There's no fever like gold fever."

So gld has had a nice run. Did you go ballz deep leveraged? You must have enough now to move to manhattan. No?

Oh I had this big mouth at the yacht club. Csco this, apple that, gold this. Owned the cheapest pos boat, yeh he was trading 10 share blks.

Aren't diamonds your best friend? Or was it re is the best retail investment? So many bucket shopisms. I'd bet if manure had a run up, you'd do a show and dance on why to get into manure!

Reminder! doggie owns a yacht. And if you own a yacht, his is probably bigger.

w67, just because fools like ericho (or cramer) are bullish on gold doesn't mean it won't go up quite a bit more

se24, don't disagree w/ you, but the way ericho spks you'd think he took his entire life savings and his kid's allowance and leveraged up 50x into gold... I'm sorry, but my wife is full up on her 403B with consumer companies and commodities, we are diversified. As I am sure Ericho is too... yet he comes on here talking up 1 data point w/o mentioning he is getting his azz handed to him w/ the LIC 2007 purchase at the PH, I am sure with a min of 5x leverage if not more. HE has taken a 100% hit to his equity... did he get 10x leverage to buy gold in his schwab acct? Did he go 100% of his cash to go into gold? He's just talking his book, just like when he was talking PH at LIC 2 yrs ago.... just a tool....

And again he EARNS his living getting ppl to swap into different assets. Much like a realtwhore... NO VALUE added to society, just a crumb eater....

Like NYC RE, where gold ends, is a big question mark, but like I said, much like in Vegas it is the rare bird that can walk from the table after hitting black 20x.....look at how many ppl in NYC RE did not sell when given 2 solid yrs of data that point to a bubble bursting.

no argument on ericho... but gold might be very far from being a bubble at this point if benny& get to have their way with yours and mine savings accts
and at the point it does become a bubble the reason so few people are able to get out or get short is that final 10% of the bubble is 50% of price move

I own a bunch of December 2010 gold (GC) futures from 1180.

I took half off the table today at 1348.

:)

Here's what irks me about you W64thstreet....
You come on these boards to criticize others about their financial decision (to buy a home) last year (bottom of housing). Like Steve, you criticize about gold as an investment since the beginning of time. The truth is, you've been wrong about almost EVERYTHING since March of 2009 but yet you come on these boards acting like you know it all.

You're a fake.
Pure and simple.

"yet he comes on here talking up 1 data point w/o mentioning he is getting his azz handed to him w/ the LIC 2007 purchase at the PH,"

Wrong.
I bought my place in April of 2009.
Closed in August of 2009.

:)

So let me get this straight. Let me first adjust my strap on. Much better.

So you were 'selling' gold right up until you took half your position off the table. What'd ya get scared? Flmaoz.

For most ppl on se, do you think as a % of assets and liabs gold represents A greater share of 'wealth ' than their nyc re?

Ericho, if you bgt and sold perfectly on every pos asset that geitner is manipulating, you'd still wouldn't make up for your pos 'home' in lic.

muhahahahaha....

bulls make money.
bears make money.
pigs get slaughter.

Cuanto cuesta el goldo?

Oro es expensive

193.32%

$1395 and climbing

1398.8 high today.

:)

The gold market's endorsement of QE2?

Good thing we spited Cramer by shorting when he said to buy.

Any updates on gold?

SSOs still outperforming gold since the crash...

Did Steve pick the time to sell a bit too soon?

Gold is at 1200, how does this compare to Cramer's buy call?

$1295 http://www.forbes.com/sites/fredoltarsh/2016/04/30/gold-prices-go-viral-reach-highest-level-of-the-year-but-cant-break-1300-is-it-similar-to-sp-2100

This seems about the right time to revive this classic old thread. When I first joined SE in 2009 and came on to the discussion forum, it had many conversations of this ilk. I did not understand a word of them then, I still don't understand a word of them now, but for those who do understand this stuff, it might be fun to see how the comments and predictions fared over the intervening decade.

Anyone who bought gold at the time I revived this thread has made out like a bandit so far!

Isn't gold trading below what it was a month ago? I thought it took a pretty big dip around my birthday?

March 16 GLD was 139.80
Apr 3 GLD closed 152.74

I revived the thread on March 14, so first opp to buy was March 16, but if someone bought March 13, they’d still be significantly ahead as March 13 close was 143.28 vs Apr 3 close of 152.65

Silver is supposed to follow where gold leads but so far that has not been the case.