Cheap gold - Cheap stocks

01-Jul-2011 Half way through the year already and things are not as you would expect. The rain falls as if it were April not July and much in our investment basket remains at a 'buy" price.

In the stocks portfolio both Stans Energy and Transatlantic Petroleum are still at bargain basement prices. There are good reasons for this but more reasons for them to rise significantly in my view in the coming 12 months. I continue to buy both stocks on a quarterly basis as I said I would at the beginning of the year. By January 2012 I will be all in on both. Then I can sit back to see if my predictions are on track.

Meanwhile gold is looking better than ever.

I cannot believe that in the light of the current economic disaster, both in Europe and in America, people still keep their money in a bank. How many defaults will it take before people realise what is going on? In my opinion every single person should hold at least 10% of their wealth in either silver or gold and that they should hold much of that in the physical form so they are not reliant on the promises of third parties.

I am pretty fed up with talk of a bubble in the gold market. I have been listening to this stuff for ten years - every year I make a killing. Every year I am told by poor people that gold is not a good investment. Who are these idiots? Who has done better than 20% a year without lifting a finger and without any tax liaibility? There are two very good reasons why I consider talk of a bubble to be misplaced.

First of all, the 10 year graph on my website shows the gold price increase year on year is virtual straight line. I accept that 5% peaks and troughs on a monthly even weekly basis are the norm but they still sit around a straight line graph once you look at long term trend, by which I mean anything longer than a year.

Secondly, a bubble is when every fool and his dog have got on board. That is simply not happening at the moment. In fact there is a rush for people to actually sell their gold rather than buy more although the number of adverts asking you to pop your second hand gold in to an envelope seem to have diminished. Ask anyone you know where they would go to buy gold and they wouldn't have a clue. Most idiots think jewellery is an investment in gold. For new members let me be clear. With gold we are waiting for the mania stage to set in. We are making massive year on year profits whilst we wait for that to happen but when it does happen, then the price will go ballistic.

Once everyone is on board and gold and silver have gone through the roof - we will have all slipped out of the back door and made an absolute killing. Yes, even bigger than 20% a year - and that ain't bad when it is tax free. And if I am wrong - well if I am wrong gold is always a great way of making sure you save and making sure you are never poor.

A win-win situation in my book.

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