06 May 2010

Market Tanks, Gold Up

All Posts 7 Comments

As of this writing, the S&P 500 is down about 4.3% on the day, while gold is up over 2%. (I can’t get the exact figure because CNBC is very slow to load…presumably from the traffic.)

Folks, do you believe in the critiques of Keynesian policies or don’t you? If you do, then you know the current “recovery” is spurious. You should get out of the stock market and into commodities.

7 Responses to “Market Tanks, Gold Up”

  1. Ash Navabi says:

    CNBC is reporting that the selloff occurred because some punk trader accidentally typed in ‘billion’ instead of ‘million’:


  2. Doug says:

    Tempting to leave, but what about Apple stock? I know nothing is “as good as gold,” but AAPL is doing incredibly well, and the company has 30-40 billion in the bank and no debt.

    Are there some companies worth holding on to?

    • bobmurphy says:

      Doug, sure, if you have specific reasons to favor a stock, I’m not saying you’re wrong. But I think a lot of people hold a bunch of their wealth in the diversified “market” because they’ve been told that this is the smart place to put your money.

      • Doug says:

        Ah, okay… that makes sense. Honestly, it’s the only stock I own, and has grown 300-400% over the past four years… then again, we’re going to use some of it for home improvement stuff.

        Can’t wait for your co-authored book to come out… isn’t that goinhg to address building personal wealth?

  3. Maurizio says:

    Bob, not even Chinese stocks? As a long term investment, I though China has to grow in the next 10 years.

  4. dc says:

    Bob, are you serious? Since the ‘recovery’ is going to go bust faster than you can say “what bleeping multiplier was that again?” what will the effect be on the commodities? How’s copper going to hold up when that construction boom is going kaput, and what about demand for fuel? When the downturn reasserts itself, where’s the demand for all those beautiful commodities going to come from? Last time I thought about it, I vaguely concluded that commodities go up when demand for them goes up, but for the life of me I couldn’t figure out how demand for commodity can possibly go up when people use less of them, what with all that downturn and stuff.
    I can see how getting a bit more gold bullion could be of use in case the currency goes bust, but other than that I can’t even see much good in gold (full disclosure: i own a few ounces of the glitzy stuff in a vault).
    When the downturn comes, the only thing that’s good anything is political connections and useful skills (that involve making/fixing stuff), at least that’s the way I see it, and if that’s true, I’m screwed, having neither.
    Here’s the ugly truth in my opinion: the only people who will fare well in the coming downturn are those on the top of the food chain already, the rest of us is going to have grand old time trying to make do with whatever we have at hand. And unless you have inflation adjustable income (and who has that?), inflation isn’t even going to help you with your damn mortgage and car payments.
    Want to prepare for the downturn? Pay off your debts, first on your car, then on your housing, and save as much cash as you can, because massive inflation is not guaranteed: they can turn off the spigot on a moment’s notice.
    Unless you have a big back-yard where you can store commodities, what good do your ETFs do you? Seriously.

    • bobmurphy says:

      Yes I was serious. I am thinking there will be large price inflation, and that some of the non-US-bloc countries will pull out of the depression after a year or so. I said “commodities” because it seemed too risky to say “get out of the stock market and put it all in gold.”