The Gold Bubble – Is it big enough to burst?
Nov 13th, 2009 | By Brian Hunt | Category: Featured, Financial NewsBrian Hunt (The Right Side):
In the past three months, there’s been a very popular – and very wrong – thing to say about owning gold.
I hear it a lot from inexperienced Wall Street analysts, bloggers, and money managers who spend little time living in the “real world”.
Here’s what they’re saying: “Gold is way too popular now… It’s near the end of its bull market.” The recommended “action to take” is to cash in your gold profits and move on to something different.
I can tell you that taking this advice is a big mistake. Anyone who believes gold is too popular with the mainstream public simply doesn’t know who the mainstream public is… and they don’t understand how bull markets end.
Sure… gold is up big since it broke out to a new high in September. In just over two months, it has climbed from $950 an ounce to $1,100 an ounce.
Click here to read the rest of Brian Hunt’s analysis of the state of gold, published online at Fleet Street Invest.
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I definitely disagree with your analysis of gold. Just because the ‘average guy’ on the street does not own gold does not make something a bubble. We have a recent example of this. Oil in 2008 was clearly a bubble that burst and went from a high of $147 a barrell to $30. That is a wipeout. Did the averager person own oil back in 2008? Did the public participate in the runup in oil prices? Not at all. Professional traders and hedge funds were the main reason oil ran up so fast and far and then came crashing down. A bubble can be formed and popped without the public being involved at all. The 1930’s were another example of this type of thinking. The public back in the thirties in general did not own stocks and yet that was a bubble that wiped out. More fear should be exercised about what the professional is doing than worrying about the what the average investor is doing. Your analysis is flawed and dangerous to anyone who follows you.