In 2002, Profit Confidential began warning readers to get back into gold-related investments, specifically gold stocks. “I’ve been pushing gold bullion and gold shares for over a year now. Back in January 2002, I personally started buying gold shares,” Michael Lombardi said on December 13, 2002.
This gold stocks guidance and analysis proved to be extremely timely. Gold bullion was trading at under $300.00 an ounce when Michael first started recommending gold-related investments. Many gold stocks recommended in Michael’s advisories gained in excess of 100%!
Back in 2002, Profit Confidential started offering gold stocks analysis to our readers, and continues to do so today. And, we have been recognized as one of the first investment letters advising its audience to jump into gold stocks, very early on in the gold bull market. The analysis we provided resulted in many gold stocks rising 100% or more in very short periods of time.
Profit Confidential has also been ahead of the investing curve by successfully advising readers to dump certain stocks, and to put the proceeds into gold-related stocks.
In the June 2, 2005 issue of Profit Confidential, Michael noted, “Most investors in Google, surprisingly, are retail investors. And, that’s why the stock can go higher—because only 20% of the stock is owned by institutions. If the institutions jump in and buy Google, the stocks will certainly move higher.”
Michael recommended Google as a buy when it was trading at $288.00 per share. On November 5, 2007, when Google reached $700.00 per share, he advised readers to sell their Google stock and put the proceeds into gold-related investments. Coincidently, gold bullion was also trading at around $700.00 per ounce. Michael’s message was to trade each $700.00 share of Google into $700.00 of gold-related stocks because he saw gold as a much better investment.
He was right. Since then, Google has struggled to break through the $700.00 per share level. Gold, on the other hand, touched $1,923 per ounce on September 6, and continues to trade above $1,700 per ounce.
And, gold stocks are expected to continue to shine. Gold has experienced 12 consecutive years of sequential growth. The recent weakness in gold bullion prices (more like a correction in an ongoing bull market) is a tremendous opportunity for smart investors.
The overarching driver of the price of gold will continue to be linked to the global financial crisis, and ongoing tensions in the Middle East. As a result, gold is expected to rise every quarter next year and average $1,925 an ounce in the final three months. Some analysts believe gold will rise above $2,200 an ounce. (Source: Larkin, N., and Roy, D., “Soros bets big on gold as prices expected to hit record highs,” Investing November 20, 2012.)
Today, you can regularly find our economic analysis of gold and gold stocks in Profit Confidential. Each time gold prices moved higher, we told our readers to buy more gold-related investments. See what we have to say about gold’s future rally in Profit Confidential.
Fasten your seatbelt, dear reader. We’re in for a global financial crisis, a currency fiasco, and a stock market collapse all in the same year!
I’m being too bearish? Not after you read this…
In their search for economic growth in 2009, the Federal Reserve and other major central banks in the global economy started lowering interest rates and printing paper money.
While the central banks of the world wanted economic growth, they inadvertently created the “trade” for big investors like financial institutions and banks. I talked about this last Friday. (See “Stock Market: The Great Collapse Back to Reality Begins.”)
The “trade” had investors borrowing money from low interest rate countries and buying bonds in high interest rate countries, pocketing the spread. In the world of finance, this is often referred to as the “carry trade.” It works as long as the currencies of the low interest rate country and the higher interest rate country stay stable.
But now, the “trade” is backfiring as the currencies of emerging markets go into free fall.
China, the biggest economy in the emerging markets and second-biggest in the global economy, got most of the “trade” money. According to the Bank for International Settlements, in 2013, foreign currency loans and borrowing by Chinese companies from other countries was close to a trillion dollars. In 2009, it was only $270 billion. (Source: Telegraph, February 1, 2014.)
European banks have the biggest exposure to emerging markets, having lent them $3.0 trillion. Breaking down this number even further, British banks have loaned $518 billion to the emerging markets; Spanish banks come in second … Read More
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