If you want to talk investing, as opposed to trading, what has performed better than Precious Metals over the last 1, 2 or 3 year periods? What am I missing?

Longer. The gold bull dates back to the middle of 2000, which is 8 years, with the last 3 spent well above the primary trendline. A reversion to mean seems in order here, if not long overdue.

Now if we talk trading, take a look at the performance & the chart formations of such things as GLD, K & SSO. GLD has also a nice gain on currency. K & SSO are recently up about 250% & have formations resembling not completed reverse head & shoulders.

A mixed bag. SSO has news out, GLD's approaching overbought IMO (as is $HUI) and K looks to be rolling over. Not the end of the world by any stretch, but I don't think I'm a buyer here. Maybe on a pullback.

I think it is a proven fact that perhaps the most common mistake investors make is to sell their winners & keep their losers. I'm sure you would agree.

My most common mistake is hanging on too long. Losers get chucked right away - it's the discipline of taking profits that I have trouble with.

As to predicting the future course, I'm sure we'll have great volatility. We are in the midst of a race to the bottom by the major countries of the world to inflate their money supplies. The race is for 2nd & 3rd place. The US has #1 locked up. I remember when Nixon closed the gold window & I've read about other such periods of currency devaluation. Now is one of those periods.

I've no doubt on the correctness of this statement, although being the reserve currency buys the dollar a bit of room. I guess we'll see for how long.

Another interesting point, there appears to be a tremendous appetite for the major gold producers as evidenced by the recent new offerings of between $2 & $3 billion. It has tempered the upward move of this group. However it has helped to stir up activity in the juniors, presumably because of the anticipated takeovers. Why else would the majors want a big wad of cash?

This is the best argument so far for a bull move.

Two I am familiar with OSK & SGR.

Truth is I have no idea how things will play out but I want more wins than losses.

I get the feeling oil has seen the bottom in this area & I'm starting with some Income Trusts.

I share that opinion, which is why I'm cautious on gold, and miners in general. Oil is a major cost in mining, and unless these companies are smart enough to hedge down here, they could be in for a nasty surprise. I guess the mexican operations would be OK since fuel is subsidized in Mexico. Still, cost control is something you need to look at if you're long the miners, especially when it comes to fuel.

As i've said before, I really don't have strong convictions either way - i'm just trying to balance the debate by presenting some of the bear arguments, although I must say the bull case has legs. The only thing making me nervous is the number of people who share that view. Bears are hard to find in this sector.

ebear