Gold Higher than the SPX
Eddie Elfenbein points out that Gold is now higher than the S&P 500.
S&P 500 at $909.
Gold at $930
This is some pretty wild stuff . . .
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Gold Weekly (cash contract)
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SPX Weekly
Thursday, October 09, 2008 | 05:30 PM | Permalink
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Gold is a terrible investment.
If gold every worked out in the long run as an investment, brass, lead and gun powder would have been a better investment.
Posted by: Owner Earnings | Oct 9, 2008 5:34:27 PM
Gevalt
Posted by: marty | Oct 9, 2008 5:37:02 PM
Does anyone consider valuations when spitting out their increasingly lower market bottom predictions? I mean, overall market PE ratio's are substantially lower than at any point in the last 20 years. The earnings base today is much higher than it was just a few years ago in the bear market of 2000-2003. I firmly believe that now is a better time to invest in index funds than any time in the last 20 years.
You can't just assume that the market can fall as much as Japan in the 90's or the S&P 500 in 2000-2004 without considering the underlying fundamentals/earnings. The yield on stocks right now is way way higher than the yield on anything else, even if corporate earnings decline further.
Posted by: Adam | Oct 9, 2008 5:38:00 PM
Close the Market? GE should fire all the CNBC guys, WASH THEM OUT!!!
Posted by: MM | Oct 9, 2008 5:41:25 PM
Yes, and the dividend yield on S&P 500 is 3.3% compared to the ten year treasury yield of 3.78%. I was a stock bear but I think I'm buying now.
Posted by: Mike M | Oct 9, 2008 5:45:02 PM
I'm starting to think that the P/E ratio's have been inflated this whole time. I think this is a 30 year correction of a completely busted monetary and economic system, much more than a "credit crunch".
Posted by: Zebov | Oct 9, 2008 5:46:18 PM
Friday before a long weekend?
All bets are off IMO.
Support?
ZERO !!!
Posted by: PeterR | Oct 9, 2008 5:46:25 PM
Hey, that reminds me of a chart I once saw:
http://bigpicture.typepad.com/comments/2006/01/chart_of_the_we.html
Posted by: Namazu | Oct 9, 2008 5:48:57 PM
A couple of months ago when I bought some silver at $15 an ounce there was no problem getting it. Now at $12 an ounce I can't find it anywhere. So, I'm buying gold but it is also becoming as scarce. Go up and look on the websites of the big companies who sell precious metals like Kitco. There is a legitimate shortage. So, this tells me a couple of things: The price is not reflecting the shortage so it is being manipulated. And more investors are beginning to flock to precious metals as they conclude that they can not hide in stocks, bonds, treasuries or even cash.
When capital preservation becomes more important than capital gains, precious metals are the only way to fly.
Posted by: Pat G. | Oct 9, 2008 5:51:42 PM
Hey BR: Didn't they riot in Pakistan after the Karachi Exchange closed down for 7 straight days?
Posted by: Chief Tomahawk | Oct 9, 2008 5:59:56 PM
Barry, have SPX and gold ever crossed before?
Posted by: leftback | Oct 9, 2008 6:00:14 PM
Since ^IXIC1881 has been hit, I have been looking for a new main theme for my investments. My main theme for the next 12 months will be gold.
Regards,
Mich(AU1881)
Commentor formerly known as Mich(^IXIC1881)
Posted by: Mich(AU1881) | Oct 9, 2008 6:02:24 PM
The stock market began climbing from 11K to 14K a year _after_ housing turned south. Clearly that was a bubble. With housing and stocks on the outs, oil rose quickly, but that was also a bubble. Now with oil in the dumper, your father's Oldsmobile of save havens, gold, is clearly experiencing the latest stupid investor bubble. Like $120 per barrel oil (i.e. before the peak), now would be a great time to get out of gold. Like most investments, your gains are being driven by the greater fool theory rather than a rational valuation of the asset.
Posted by: Frank Jewett | Oct 9, 2008 6:03:14 PM
Ok,
Now we have hit bottom. This is my second bottom call in two days and the second one I have ever made. If I wish hard enough, can I make it happen.
This market is too low to short, too scary to buy for many.
When does the government crank up the prinitng presses in earnest? Helicopter Ben...we need you!
Posted by: Rich Shinnick | Oct 9, 2008 6:05:46 PM
Adam, I don't have the answer, but it might do well to ask; What were the underlying fundamentals/valuations in Japan as the Nikkei cratered?
Posted by: Andrew | Oct 9, 2008 6:06:12 PM
Zebov has it right. For 30 years, people have been pouring money into stocks rather than savings, expecting infinitely sustainable higher rates of return. The constant positive pressure as new money gets dumped into the pot is the reason why markets are generally bullish. It's the mother of all bubbles.
Posted by: Frank Jewett | Oct 9, 2008 6:07:27 PM
Wait a sec- I thought they were pouring money into real estate- expecting infinitely sustainable higher rates of return...
Posted by: Paul in NYC | Oct 9, 2008 6:11:56 PM
So, Frank, you are saying that when one buys stocks, we aren't saving? What is savning? Buying CD's and or Treasuries? Stuffing it in the matress?
People are looking for a return on investment that at least matches inflation. Stocks are the ONLY place 99% of Americans can go to beat inflation.
Also, who was the famed investor that said you want to be buying when there is blood in the streets? Well, I would have to say that right now there is plenty of blood, but I'm not buying. I think I have drowned in the blood.....
Posted by: jdamon | Oct 9, 2008 6:12:24 PM
Posted by: leftback | Oct 9, 2008 6:00:14 PM
lb, surely in the '77-'80 timeframe..
People better watch out for Gold..
echoing the first comment, it's time, yet?, to wake up--Finance, as we know it, is an Illusion, a, wholly, Arbitrary reflection of the Real Economy.
People would be well served to move their JMK treatises to the PoliSci section, of their Libraries, where they belong. Right next to the, brilliant, works on effective agitprop by Bernays..
Might want to add some good Histories of the Medici family..
As George Carlin, so rightly called it: "It's called the American Dream(MadAve.v.1.0), b/c you've got to be asleep to believe it"
If we haven't learned, by now/soon?, that Paper and Things are two different Animals, we're, surely, going to get lost in the jungle..
Posted by: Mark E Hoffer | Oct 9, 2008 6:13:05 PM
The earlier comments about market p/e being lower and therefore it is a good time to buy would be correct if we knew for certain what the "e" was now and going forward 6-12 months.
We'll get more info next week, but I worry it will not be good. And companies won't lower guidance too far. So the next year will see companies inching down guidance across the board. It all depends on how bad the macro picture gets.
Will we look back and say "remember how tight the commercial paper market was?" (things recovered) or will we be saying "Buffett is doing a decent job as Chairman of the Federal Lending Bureau." (everything went to sh**.)
Posted by: Todd | Oct 9, 2008 6:14:32 PM
@Posted by: leftback | Oct 9, 2008 6:00:14 PM
Posted by: DavidB | Oct 9, 2008 6:15:05 PM
"..Now with oil in the dumper, your father's Oldsmobile of save havens, gold, is clearly experiencing the latest stupid investor bubble..."
Frank, thanks for calling me stupid, I would have been pissed off, but then I clicked on your link to get to your website created on April 17 2008 to teach Real Estate professionals how to use outlook. And then I wasn't pissed off anymore.
Posted by: Mich(AU1881) | Oct 9, 2008 6:16:01 PM
Regards,
Mich(AU1881)
Commentor formerly known as Mich(^IXIC1881)
Posted by: Mich(AU1881) | Oct 9, 2008 6:02:24 PM
Mich,
that's hiliarous, you crossed my mind, last night, when the .IXIC quote scrolled passed the bottom of the telescreen..
you'll be right, here, too..prob. may be, though, broad market inefficiences leading to, even lower, stocks of Goods to purchase..
Posted by: Mark E Hoffer | Oct 9, 2008 6:18:07 PM
"you'll be right, here, too..prob. may be, though, broad market inefficiences leading to, even lower, stocks of Goods to purchase.."
Mark, I totally didn't understand this sentence. Are you saying I will be here on this blog in the future, or saying I may be right about gold at 1881??
On another note, I am open to ideas in terms on main themes. I am not a Technical chart person. I do well when I recognize a main theme either in a stock or markets in general and leverage to make it meaningful.
If anybody is wondering why it was IXIC1881 I would explain that too.
Posted by: Mich(^IXIC1881) | Oct 9, 2008 6:28:44 PM
Does anyone else find it odd that we are exactly 1 year from the markets high on 10 9 2008?
I've seen a lot of crazy thing in my day and for the market to put in it's low on the anniversary of the high wouldn't surprise me at all.
I've been bearish for 2 years and I have to observe that a pretty bad future is being priced in here...
Posted by: Vermont Trader | Oct 9, 2008 6:28:50 PM
