Keeping Winners and Selling Losers
Investors appear to be following what they have been taught, selling their losers over the last 18 months, gold, and keeping their winners over the last 18 months, stocks.
In this case however, at a major market junction I would rather be short stocks thn gold although obviously I was a few days early in making the switch. Over the next 18 months, however, I think we will be rewarded.
John Mauldin’s letter of April 12th has a good review of the numbers behind the current government budget proposals.
Just to put this all into perspective, the S&P 500 / Gold trend relationship points to a current valuation on the S&P of around 1330 based on gold’s drop over the last two days.