Articles


  • Timing the Bottom



    By caseyresearch.com

    An interesting thing about the uptick in gold prices over the last couple days is the number of people asking me if I think gold has bottomed. This is somewhat amusing, since we all know that no one can time a market, and the questions are coming from my peers—professionals who should know better.

    This reminds me of Doug Casey’s famous story about how he bottom-ticked the market in the 1970s: He was a broker at the time and put together an order for a client named Elmer who later reneged on the purchases. So Doug followed his own advice and bought the shares for himself. This happened to be the very day the market bottomed.

    Note that Doug did not know that it was the bottom of the market when he made those purchases. He did know that they were good stocks at great prices—the ingredients of any smart speculation.

    Another story: Rick Rule of Sprott Global fame formed a partnership to invest in junior resource stocks in 1998 and, undeterred by the “nuclear winter” that gripped the sector for two more years, formed another in 2000. Gold would eventually bottom in 2001, so Rick was clearly early.

    Note that being early did not matter; both ventures ended up returning roughly 20:1, and investors made a killing. Rather than fretting about timing the market, Rick simply focused on “buying low.”

    Key takeaway: not only can nobody time the market, those who have made fantastic amounts of money speculating in this sector didn’t even try. They made money buying when valuations were ridiculously low… and simply waiting to be right.

    Most people only have the courage to do this with money they can afford to lose—which explains why we call my newsletter the Casey International Speculator and not Casey Safe Investments.

    What would we do if safety was our top investment priority? Well, as I wrote after Bernanke’s mere suggestion that the Fed might scale back a little on its money printing, it is now plain as day to anyone with their eyes open that “the emperor has no clothes.” Gold may take some time to consolidate and rally, but that doesn’t make Wall Street a safe bet. We think the safest portfolio allocation under present circumstances would be 50% gold, 50% cash.

    But preserving wealth is not our only goal here at Casey Research. For many of us, readers and colleagues alike, it’s not even our top priority: we want to make money—lots of money. And it is our view that the recent market volatility is evidence that our projections of more economic trouble ahead were and are correct. That means our overall strategy is correct and remains intact, which in turn implies that the current selloff is a buying opportunity. Hence, we still recommend our basic allocation model of 33% cash, 33% gold, and 33% equities that should do well in times of crisis.


    Read full article
  • Rabindra Kayastha

    Authorized Person for MEX NEPAL
    Mob: +977 9856030634

  • Pawan Dhakal

    Biratnagar Branch Manager
    Mob: +977 9852033934

  • Our Clearing Member

    Himalayan Commodity Brokers
  • Our Banking Partners

    Laxmi Bank
  • Bank of Kathmandu
  • Nepal Investment Bank Limited
  • Century Commercial Bank Limited