G-khan
04-18-2003, 10:59 PM
Richard Russell
Dow Theory Letters
April 21, 2003
Extracted from the 17 April 2003 issue of Richard Russell's Dow Theory Remarks
Karma- - Do you believe in karma? I do. Drop a stone in the water, and the ripples from that splash widen and widen until they touch you. That's karma, and if karma works, the Federal Reserve system is doomed, and I'm afraid the dollar is doomed as well.
Maybe that's the greatest argument for gold. Nobody, even the Fed, can create gold out of "thin air." No, men have to sweat and work, and they even die for gold. Gold is the first metal mentioned in the Bible. I don't think the Bible ever mentioned paper currency, did it?
No, currency (wealth) created by government fiat is man's invention. Our forefathers warned against it, but hey, we've got it, tons of it. Bad karma, folks, it's the essence of "wealth without work."
. . .
Richard,
I have been wrestling with the following for a while now and I bet so have many of your subscribers: Why is it that you allocate only 5 to 10% of your recommended portfolio to gold when you state the following - gold is in a primary bull market; the stock market is in a primary bear market; the dollar is in a primary bear market, and the bond market seems to have topped out? The logic of this seems to lead one to the conclusion that there are no good choices other than gold! Even though you love dividends or interest from your investments so you can "compound," at 4% or so a year (if you are lucky) gold would only have to increase to $338 by year's end to cancel that out. How can you allocate such a low percentage of your portfolio to the only investment area you designate as being in a primary bull market? Honestly, this is the only area in which your logic escapes me.
Please write an answer to this - for your readers benefit. I have taken a MUCH larger position myself, so this is really for your readers.
Your Lifetime Fan
D. Schectman
Russell Answer -- Nothing in this life is absolutely certain -- except change.
As I see it, gold is in the very early stages of a major bull market. I don't now how this bull market will progress; nobody does. The bull market may "get going" in a month, in a few months, in a year or in a few years. I don't know the timing, any more than I know the timing of this bear market in stocks.
Everything is clear and obvious in retrospect. In retrospect, this might have been the time to put all your money in gold coins. In retrospect, this might have been the time to have only 5% of your assets in gold coins and 5% in gold shares. In retrospect, this might have been the time to hold 25% of your money in Newmont and 25% of your assets in krugerrands and the rest in T-bills.
Since I don't know how this gold bull market will work out, and I certainly don't know the timing for this gold bull market, I've been saying as a rough guess -- put 5% of your assets in gold coins and 5% of your assets gold stocks. Personally, I have a higher percentage than this in gold and gold shares, but that's just me. I'm a believer in real money.
Buying some gold, even if you are not a gold-believer, means that you are at least "putting your foot in the water." And if gold just happens to move persistently higher, than at least you've got a head start and an initial early position.
More follows for subscribers. . .
Richard Russell
Apr 21, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
--------------------------------------------------------------------------------
Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $250, tax deductible if ordered through your business).
Do go for the trial. I think that once you read Russell, you will sign up permanently. There is a reason he's been around for 45 continuous years.
Bob Moriarty
Publisher 321Gold
--------------------------------------------------------------------------------
321gold Inc Miami USA
http://www.321gold.com/editorials/russell/russell042103.html
Dow Theory Letters
April 21, 2003
Extracted from the 17 April 2003 issue of Richard Russell's Dow Theory Remarks
Karma- - Do you believe in karma? I do. Drop a stone in the water, and the ripples from that splash widen and widen until they touch you. That's karma, and if karma works, the Federal Reserve system is doomed, and I'm afraid the dollar is doomed as well.
Maybe that's the greatest argument for gold. Nobody, even the Fed, can create gold out of "thin air." No, men have to sweat and work, and they even die for gold. Gold is the first metal mentioned in the Bible. I don't think the Bible ever mentioned paper currency, did it?
No, currency (wealth) created by government fiat is man's invention. Our forefathers warned against it, but hey, we've got it, tons of it. Bad karma, folks, it's the essence of "wealth without work."
. . .
Richard,
I have been wrestling with the following for a while now and I bet so have many of your subscribers: Why is it that you allocate only 5 to 10% of your recommended portfolio to gold when you state the following - gold is in a primary bull market; the stock market is in a primary bear market; the dollar is in a primary bear market, and the bond market seems to have topped out? The logic of this seems to lead one to the conclusion that there are no good choices other than gold! Even though you love dividends or interest from your investments so you can "compound," at 4% or so a year (if you are lucky) gold would only have to increase to $338 by year's end to cancel that out. How can you allocate such a low percentage of your portfolio to the only investment area you designate as being in a primary bull market? Honestly, this is the only area in which your logic escapes me.
Please write an answer to this - for your readers benefit. I have taken a MUCH larger position myself, so this is really for your readers.
Your Lifetime Fan
D. Schectman
Russell Answer -- Nothing in this life is absolutely certain -- except change.
As I see it, gold is in the very early stages of a major bull market. I don't now how this bull market will progress; nobody does. The bull market may "get going" in a month, in a few months, in a year or in a few years. I don't know the timing, any more than I know the timing of this bear market in stocks.
Everything is clear and obvious in retrospect. In retrospect, this might have been the time to put all your money in gold coins. In retrospect, this might have been the time to have only 5% of your assets in gold coins and 5% in gold shares. In retrospect, this might have been the time to hold 25% of your money in Newmont and 25% of your assets in krugerrands and the rest in T-bills.
Since I don't know how this gold bull market will work out, and I certainly don't know the timing for this gold bull market, I've been saying as a rough guess -- put 5% of your assets in gold coins and 5% of your assets gold stocks. Personally, I have a higher percentage than this in gold and gold shares, but that's just me. I'm a believer in real money.
Buying some gold, even if you are not a gold-believer, means that you are at least "putting your foot in the water." And if gold just happens to move persistently higher, than at least you've got a head start and an initial early position.
More follows for subscribers. . .
Richard Russell
Apr 21, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
--------------------------------------------------------------------------------
Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $250, tax deductible if ordered through your business).
Do go for the trial. I think that once you read Russell, you will sign up permanently. There is a reason he's been around for 45 continuous years.
Bob Moriarty
Publisher 321Gold
--------------------------------------------------------------------------------
321gold Inc Miami USA
http://www.321gold.com/editorials/russell/russell042103.html