By Harold AGJ Davis     19 July 2016  Change unfolds as a slow and cumulative process over extended periods of time until something happens to cause an abrupt shift. Rock formations contain layers of different thickness and colour, often separated by very thin boundaries. What happened from one moment to the next? Human history unfolds in much the same way, except that timespans are shorter and few recognize the periods equivalent of rock layers. Perhaps many are unaware of this cyclicality because it is partially obscured by the cumulative nature of technological progress, and they fail to consider that the route taken was not the only choice, nor was it inevitable. Thus, when a market guru suggests that his favourite holding period is forever or when the “buy, hold and prosper” types chant their mantra, they may be biased by uncritical confidence in the successes and good intentions of their known and familiar layer, the secular western world since 1945.

By Harold AGJ Davis    10 July 2016  Most old market denizens are familiar with Charles Mackay’s 1841 classic “Extraordinary Popular Delusions and the Madness of Crowds”, and know from personal experience that it is easier to read about collective insanity than to recognize it when you are in the midst of it. After all, “This time it’s different!” Oh, really? The remarkable political stupidity that has gripped Europe and which reached dizzying depths in Britain can only be described as a madness of the ruling elites. Now, with Europe and the U.K. threatening to unravel, a wave of anxious flight money is seeking safe havens around the world, and an extraordinary popular delusion believes that U.S. Treasury long bonds yielding 2.11% are an appropriate sanctuary from the storm. However, considering how often people in a panic make bad choices that end in tragedy, could this be another?

  We would not mention this if it would not provide us with a perfect example of whom not to listen to or take advice from despite the fact that they may be appearing on television. In a television interview, this TV commentator was imparting his negative opinion on gold to the viewing public abusively by chastising the guest for having advised gold as a part of a portfolio. Fact?  What was incredible is at that very time of the December 2013 on air interview; numerous gold stocks were making their major price bottoms and have seen gains since then of 800% to 1500%. Their enormous price gains have shown the business television host to be an even greater fool.   The interview? In an incredibly rude and bombastic manner, the interviewer asked the guest if he had regrets for even having recommended gold implying that investing in gold had caused gold investors inordinate suffering and pain. The key point was posed in an extremely pompous and disdainful manner as if he (the host) was an expert. He is not by any means as we will show! At that time, with gold down and numerous mining stocks fashioning major price bottoms while at multiyear price lows, the guest was condemned by the ignorant uninformed interviewer. Yet, the guest is not a “gold bug” but rather always recommends a balanced portfolio including a percentage in gold stocks. The commentary by the host was so overdone that within minutes we received calls […]