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Katwoman
21st September 2009, 10:08
Just as real estate is all about location, location, location so gold and silver prices are all about fundamentals.

During the real estate boom homes with no major change in the fundamentals (ie they were not moved to a new location) were going up in price simply because interest rates were lower. This effectively did away the advantage of buying the home at a low interest rate since the total cost remained the same. This type of irrational exuberance underlies the mind set of far too many investors which is why they get burned.

The same can be said for PE ratios in stocks. We have seen PE ratios that make no sense since the dot.com bubble and yet people keep buying equities. Why would anyone do this when the fundamentals make no sense?

On the contrary even though the dollar has gone up recently and PMs pulled back the fundamentals of each have not changed. The national debt has not gone down, no new jobs have been created, the GDP has not grown, and congress has made no real attempt to reduce spending on unconstitutional foreign wars or entitlements.

Until this occurs PMs remain in a bull market and this pull back represents another buying opportunity before the big run up.

ccjoe
21st September 2009, 12:22
Just as real estate is all about location, location, location so gold and silver prices are all about fundamentals.

During the real estate boom homes with no major change in the fundamentals (ie they were not moved to a new location) were going up in price simply because interest rates were lower. This effectively did away the advantage of buying the home at a low interest rate since the total cost remained the same. This type of irrational exuberance underlies the mind set of far too many investors which is why they get burned.

The same can be said for PE ratios in stocks. We have seen PE ratios that make no sense since the dot.com bubble and yet people keep buying equities. Why would anyone do this when the fundamentals make no sense?

On the contrary even though the dollar has gone up recently and PMs pulled back the fundamentals of each have not changed. The national debt has not gone down, no new jobs have been created, the GDP has not grown, and congress has made no real attempt to reduce spending on unconstitutional foreign wars or entitlements.

Until this occurs PMs remain in a bull market and this pull back represents another buying opportunity before the big run up.

Exceptionally rational post Kitty
thanks
joe

cowboycarl04
21st September 2009, 13:02
This post makes too much sense. I can't wait to see CNBC use it on one of their programs and call you part of the "fringe" movement.

Speaking of fundamentals, isn't it true that earnings per share in the S&P 500 is down around 98% or higher since this time last year? To me, it only validates what you are saying, which again was great!

silversurfer1
21st September 2009, 16:52
Katwoman that was a simplistic post yet dead on. Gold/Silver are on par-boil and the pot will soon blow....as you said the fundamentals are certainly there. I just hope this pullback gets a little stronger as I need to buy at least a few more hundred ounces before it gets cost prohibitive for me - and that point is coming soon.

Cash2Riches
21st September 2009, 17:03
Very very true statements, yet all you hear about on CNBC and other channels is about how the economy is recovering? I don't get it. The day we see CNBC head lining PM's all day will be when its time to sell, they'll be very late to the game.

slvr
21st September 2009, 17:26
Just as real estate is all about location, location, location so gold and silver prices are all about fundamentals.

During the real estate boom homes with no major change in the fundamentals (ie they were not moved to a new location) were going up in price simply because interest rates were lower. This effectively did away the advantage of buying the home at a low interest rate since the total cost remained the same. This type of irrational exuberance underlies the mind set of far too many investors which is why they get burned.

The same can be said for PE ratios in stocks. We have seen PE ratios that make no sense since the dot.com bubble and yet people keep buying equities. Why would anyone do this when the fundamentals make no sense?

On the contrary even though the dollar has gone up recently and PMs pulled back the fundamentals of each have not changed. The national debt has not gone down, no new jobs have been created, the GDP has not grown, and congress has made no real attempt to reduce spending on unconstitutional foreign wars or entitlements.

Until this occurs PMs remain in a bull market and this pull back represents another buying opportunity before the big run up.
You know what they say "the markets can stay irrational longer than you can stay solvent"

One day irrationality must meet with reality

I think we can all stay solvent for a long time, though. I hope :)