Wednesday, December 23, 2009

Not Even Close to the Top

Not too long ago, The Colbert Report had a segment on gold, poking fun at the relationship between gold buyers (or more accurately, sellers), and conservatives. Apparently Glenn Beck, among others, is sponsored by a gold investment company. I too find it interesting that there seems to be a connection between conservatives and gold, though those of you who know me well know I'm certainly no conservative, not even close to one. (In fact, I would like to ask, where were these people in the Bush days?) But now that gold has been making headlines in the mainstream media, and now has even been featured in a comedy show, does this mean we're close to the top?

Of course not. As I have mentioned before, when we're close to the top, everyone around you will be investing in gold, hoping to strike it rich. People who have no business speculating in gold mining stocks will be admonishing others for not having put some money on the table yet, or worse, for selling their gold. The top will be characterized by mania, both metaphorically and psychologically.

However, what we have now is consistent with signs of a stage two bull market, where gold begins to be featured in a skeptical media and is still generally ignored by the average Joe, though institutional investors begin to show some enthusiasm. After all, The Colbert Report segment wasn't really positive on gold; in fact, it was negative, trying to tie gold with a bunch of crackpots. But at least we're no longer in stage one -- if we were, there wouldn't even have been a segment in the first place.

As of late 2009, the news media are still negative on gold. Slowly but surely, though, people will warm up to it, laying the groundwork for stage three. Just be patient. Everything is still running on schedule.

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