SOS Precious Metals going thru the ROOF!

Gold touch historical high at USD1452 per oz

Silver is on 31 year high at USD39.21 per oz

Marc Faber, Jim Rogers, even Michael Shedlock is bull on gold and silver (in the long run) but expect correction before the next up cycle.

Even Charles Nenner is bull on gold, but also expected a correction before it goes to USD2500 per oz in the long run.

Long run (definition: between 5-10 years)

On a fundamental perspective, demand < supply, so fundamentally, the price should fall. HOWEVER, as we are aware, financial market price is decided by price actions of investors and speculators, which is not the genuine buyers who use the metal or genuine sellers, who produce the metal.

In other word, financial market price for gold or silver is based on the behaviour of the participants, what they understand and what they are fed. The simple deduction is MONEY PRINTING = INFLATION = GOLD & SILVER price will go up in the long term (investors and speculators long term is 1-2 years)

MyView

It is the fact that price action WILL never equate to the fundamental of the stocks or commodities, if that is the case, everyone will make money. Price action normally discount the future expectations (as normally fed by the media). So, one can conclude that the financial market price does not correlate (100%) with the fundamentals.

According to Prechter and Nenner, there are many case proven that even the quarterly results improve or better than analysts expectation, the price goes down, mainly because the market is in a DOWN cycle, period. Similarly, sometimes you find that a stock has lousy fundamentals, but keep on going up, so, it is based on the perception or interpretation of the crowd. That is why a few ways are used (not perfect) to study the price action, such as candle stick, technical analysis, elliote wave, cycles analysts, pivot point, demograhy cycles, and many more tools around, but none is perfect because human behaviour is not easy to measure.

So, depends how you look at the long term cycle, if I think it is very uncertain and a long term DOWN cycle, I go for the low beta, high dividend stocks and solid fundamental stocks. If you think it is a UP cycle, you can go for high beta stocks or even penny stocks. Like what Buffett said, only when the tides is down, you will know who is swimming naked.

So, both fundamental analysis and technical analysis tools are useful in their own manner, there is no perfect tools, but there are good and not so good tools, just use and make the most of it. Remember, even CLSA uses feng shui for the market prediction, like tossing a coin, but with different basis.

In the long run, the conclusion is the same, it is always the BANKER (as to casino) wins. If the majority wins, then, everyone is rich, no one will be poor. Everyone plays their own role, some advisors cannot be the kings, and some kings cannot be the advisors period. IN the very long run, everythings will balance itself.