Stocks and Sectors

Congratulations to the stock market on the one-year anniversary of the lows. And congratulations to all of you who are net sellers of stocks, and will be as you enter your retirement. For you, an overvalued stock market is absolute gold. For those of us who expect to be net investors for many years, of course, an overvalued stock market is bad news, since we are buying at higher-than-fair values, but we still congratulate those of you who are lucky enough to be able to sell high while we buy high.

I never have understood why young people – certainly anyone under 50 – get so excited when stocks rally. If these same people walk into a 7-11 and see the price of a Slurpee rising every day, or go to fuel up the car and watch the price of gasoline going up every day, they’d be depressed and/or outraged. Even if they already own a car, they hate to see car prices rise because they know they will be buying another car eventually. So why does it make people so darn happy to see stocks rise when they know that they will be buying on balance for many years?

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Peter Cooper submits:

The inscrutable Chinese are hardly likely to inform the world that they are on a gold buying spree for fear of sending the gold price through the roof before they can finished their acquisition plans.

China’s gold reserves amount to 1,054 tons, ranking fifth in the world, said Yi Gang, central bank vice governor on Tuesday. China is the largest gold producer in the world, with more than 300 tons of gold produced annually, all of it consumed locally and not exported.

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Scott’s Investments submits:

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The Gold Report submits:

The Gold Report caught up with John Embry, Chief Investment Strategist, Sprott Asset Management, to get his thoughts on gold and some mining stocks he favors. Embry, an industry expert in precious metals, has researched the gold sector for over 30 years. Read about why he thinks gold could gain another 30% this year as a greater proportion of the public realizes the degree of difficulty that sovereign debt is in. He believes as confidence in gold returns, people will seek an outlet in gold stocks, especially small-cap gold producers and junior explorers with solid projects.

The Gold Report: John, in Investors Digest of Canada, you recently said you’re expecting gold to gain another 30% this year.

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Richard Bookstaber submits:

I am not going to spend time here talking about how the price of gold is off-the-wall, that it is not just a bubble in the making, but a bubble waiting to burst. I don’t want to waste your time on that point. We all know it is a bubble.

George Soros has said “The ultimate asset bubble is gold”. Many of the top asset managers, such as Tudor and Paulson, are piling on; Paul Tudor Jones recently said gold “has its time and place, and now is that time.” The banks are echoing this view with their research. Goldman Sachs has a research piece that looks for gold to approach $1,400 in the next year. The more ebullient Charles Morris of HSBC has said, “I absolutely believe it’s heading into a bubble, but that’s why you buy it. ” He, along with a number of other professional and otherwise rational managers, looks for gold to move as high as $5,000 an ounce.

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S.E.Wells submits:

Rubicon Minerals (RBY) reported some new information on its F2 zone on March 9^th, 2010. See here for details.

As an investor in Rubicon, I’ve been trying to make sense of the information available to me about this discovery. It will be some time before a 43-101 compliant resource statement is available because it’s an underground deposit and more drilling needs to be done to meet those exacting standards.

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Mark O’Byrne submits:

Gold: Gold dipped sharply in US trading yesterday from $1,136/oz to $1,118.50/oz before closing down 1% to $1,120/oz. Gold also fell in pounds, euro and Swiss francs but remains near record nominal highs in these currencies. Gold rose to $1,123/oz so far in Asian trading and is currently trading at $1,119.50/oz and in euro and GBP terms, it is trading at €825/oz and £749/oz respectively.

Receding eurozone debt fears saw US equities maintain last week’s gains but equity markets in Asia were mixed and have fallen in this morning’s European trade.

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Hard Assets Investor submits:

By Julian Murdoch

Last Friday, gold closed up 1.5 percent for the week to end at $1135.20/oz, thanks to a U.S. dollar that couldn’t decide if it was strengthening or weakening. Of course, whether the gains continue remains to be seen, but for gold bugs, it seems one thing is certain: Gold demand has never been higher.

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Tim Iacono submits:

Don’t look now, but they’re talking about junior gold mining stocks in The Wall Street Journal. Surely that’s a first and, if not, you can probably count the times that this subject has appeared in the paper over the last ten years on one hand.