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World markets make new 5 year lows and what did the safe haven of gold do??

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john_1
Super Contributor
Did it fly like a bird, Did it come to the rescue, Did it shine on the day....No it fell $41...
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31 REPLIES 31
john_1
Super Contributor
Look at the time of my post 22 22 21 I think it all must be some kind of conspiracey
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Robbie
Regular Contributor
My interpretation: Both should'nt fall - one of the 2 will turn around. If the markets keep falling like now, gold will surely turn north - but I think from Monday. [I think if the DJIA does not close below 8000 by Friday, then it will turn north and gold will test $640 - which I think is the bottom]
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Not applicable
This is not a normal market. People are pulling money from everywhere to fund margin calls etc, or to go into cash. This includes the more risky assets like emerging markets, but also commodities like gold. Hence, everything falls... Like one UK newspaper said: "The sky is falling! Sell sky!"
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Shard
Super Contributor
Alot of this is as a result of so much negative media and the lovely information super highway speedy disseminating the pessimism into the market and making everyone panic.
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platsak
Super Contributor
Dow Futures in the Green. Rest of the world bleeding. Moral of the story. Life's not fair. Live with it... Has a real bad ring to it though.
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john_1
Super Contributor
What a crock of *****e!!! the only thing that is rising is the Dollar...WHY? when the fed is printing money...WHY? when the US ecnomy is poked...WHY? when they are the centre of all this mess....BECAUSE THE US DOLLAR IS THE WORLD BASE CURRENCY AND THE FINACIAL SAFE HAVEN....NOT GOLD!!!!!!!!!
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Wizard
Super Contributor
The DOW just made triple bottom. There should be a nice rally from now on lasting few moths. GOLD I think made a major double bottom. The irony is that both of them will rally at the same time from now on. At some point in the near future, they will separate and start going in different directions.
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Wizard
Super Contributor
I like this type of negativity Johnny. :) It will make it really big Bull Run in Gold. But the day that u say we have to buy Gold in few years time I will sell.and buy the banks that u hold :)
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SimonPB
Valued Contributor
yip, the world is buying US$ and US gov T bills. They certainly not buying gold.
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barry_1
Super Contributor
Now i'm likely to bring the Buffet fans down on me,but i feel he's protecting his own ass,by saying sell all foreign shares and buy only American....He must be sweating a bit as their prices sink!...All that currency returning to the US to prop up their debt ridden society!...i've never been able to understand how any country can measure their financial success by the amount their consumers spend?....surely value of exports over imports and self suffiency are the only measures that count?
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SimonPB
Valued Contributor
but if you read the buffett statement. He never said the shares he was buying wouldn;t go lower, and he said it may be a long time before he is making a profit.
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Running_bull
Frequent Contributor
Way i see it, US and world power houses are in a recession and are experiencing deflation, or rather, low inflation. Gold is one of the most beneficial from inflationary times, hence the weak gold prices. HOWEVER, pumping so much cash (especially dollars) will reverse this. When economy turns... We WILL see hyperinflation, leaving tangible assets in the money. Thats when we will se Gold do its thing.
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SimonPB
Valued Contributor
what buffett said

Buy American. I Am.
By WARREN E. BUFFETT

Omaha

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: "I skate to where the puck is going to be, not to where it has been."

I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: "Put your mouth where your money was." Today my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.
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barry_1
Super Contributor
Thanks Simon,this article has a way of dealing with our frustrations,never said the chap was not brilliant,just that nothing i try seems to work at the moment.Can't wait for long term at my age though!
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SimonPB
Valued Contributor
lol, well yes an buffett is 77. so in truth he ain;t really like to be around that long term either ...
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louisg
Super Contributor
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louisg
Super Contributor
Barry at these levels one could build a portfolio of high dividend paying, quality companies (including property shares and the like)that can provide about an initial (after tax) return of 10%(one would have to make use of ALL the tax breaks). That's R8300 per month per million. The dividends/interest should compound above inflation over time. The price/capital appreciation will take care of itself in the long term.OMO
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Not applicable
Ja ...I have a HUGE issue with the buffet acolytes....there is no doubt about his success and I am 100% convinced that his strategy will work.....truth of the matter is the man is eccentric with eccentric needs....if however for people who are normal his strategy is the worst investment strategy u could possibly have.....he totally ignores the one commodity which is the most valuable by FAR and that is time....can he spend the money in the time he has available....no....has he had a great quality of life...yes maybe in his idiosyncratic way but would that work for most ppl...living in the same dull house driving the same dull car...wearing the same dull clothes etc can be done with far less effort and far more fun...for him its a game which is great but for normal ppl this is ludicrous....deferring pleasure till you are dead is for looneys
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doomsdayza
Super Contributor
Louisg, which companies would you have in that portfolio? MTN, SOL, PPC? How many shares would you personally use to make up the portfolio. What's a good mix of shares and sectors in your opinion? Thks
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