by Gavin M. I'm often asked the question whether it is time to buy gold. I always answer, "which one? The physical gold or paper gold?" You have to separate the two because the latter is easily manipulated by algos and the former is much more desired. However, in my opinion, I never really understood the love for the yellow metal. I certainly do not hold GLD or GDX in my portfolio; never have and never will. I do trade paper gold be it futures or ETF but I never want to hold it like others do as an inflation hedge. They say FIAT money relies on a lot of hope. I tend to think gold goes the same why. Here's why: Gold is a piece of yellow metal. Apart from its historical significance and value, what does it really offer? If we are all in a doomsday scenario and there is a continuous nuclear winter, what would you rather have in your house: gold or a shotgun? I would prefer the latter. I can use the shotgun to rob people with a lot of gold. But before I incur the wrath of all the gold bugs out there, I really want to emphasize my point here. I am against paper gold added to your portfolio not physical. I liken physical gold as having a disaster preparedness kit in your basement. I truly think this is what owning physical gold is all about. However, adding GLD or other SPDR or wonderful ETFs to your portfolio will not do much to increase your chances of making a lot of money in a market crash. In 2008, I made a lot of money shorting everything. I did not go LONG gold futures nor ETFs in 2008 because the US financial collapse happened. It was far from it. You need to evaluate your reasons for owning the yellow metal be it paper or physical. I just think owning gold ETFs and futures will only be detrimental to your overall financial standing because they are so easily manipulated. Let's explore the SPDR ETF: GLD. This is an ETF that entitles you to own a portion of the trust that owns the gold via BNY Mellon. You do not have a direct stake to gold bars held in the NY vault. You can't somehow go to BNY tomorrow and say, "Hey I own 100 shares of GLD, how many micro ounces of gold do I have?"
How many gold bugs have suffered buying gold since 1400, 1300, 1200 and now 1100? I cannot accept the answers of, "Oh, I'm in it for the long term." This is the usual defense of investors who cannot admit defeat. Investments, like trading, can incur huge losses if one is too stubborn to realize the errors of one's ways. In the end, gold, like everything else in this world, is manipulated. Buying or selling is not a matter of being right, but a matter of timing. Timing is key, and timing is paramount.
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by Gavin M.
Seeing as I am currently in Europe, it's afternoon here and it really helps in being so wide awake to trade the US session. I was trading AMZN pe-market as it was already quite active and that continued into the NY opening session. The options at the open were really horrible. The CBOE decided to add 0.50 option strikes as well. What for? Sometimes I think they have complete idiots as employees over there. The Move in AMZN today is absolutely stunning. I was quite shocked that the buyers did not step in 10 minutes after market open to stop the bleeding. I guess fear will overcome any bullish sentiment. Those of you who took calls into today, take your profits. It could be an atypical day. As for our clients, we warned them that there could be significant profit-taking today. Those who followed, got paid well before it sunk to 560. Want to learn how to trade? Check out our discounts now! |
Multiple AuthorsTraders from Equity Sense will be writing on this blog on positions and other market-related things. Archives
May 2018
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