Last week, we published a 2,500-word opus on what lessons could be learned from the rise and fall of gold.
There was lots of feedback on the general concept and many of the specifics. By and large, the response was positive, with most of the pushback coming from those who were long gold or other metals. I thought it might be worthwhile to respond to some of the comments that came my way, both positive and negative.
1. Denial. I guess this should not have surprised me, but: People called the 38 percent drop from the peak a “pullback.” Really? That’s like saying leprosy is a dermatological condition.
It is not completely inaccurate to say that we don’t know for sure if the secular bull market in metals is over. I have no objection to anyone saying we don’t know how this ends.
But ask yourself this: If stocks fell 38 percent, what trader would not declare the secular bull market over? How much does something have to drop before anyone admits the trend is broken? I chalked that up to trader’s denial.
2. Not about gold. Quite a few people understood that the entire idea of the piece was not about gold, but rather used gold as a jumping off point to discuss investing errors in general. That the 10 “lessons” offered in this piece weren’t specific to gold was by design.
Some of the pushback said this critically – “These lessons don’t even apply to gold!” – which really confused me. It was supposed to be investing advice that could be applied to equities, bonds, real estate or commodities. I have done similar such “lessons” after elections, and about investing in general (see this and this).
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