It’s better to make money than to be right. This is one thing many people forget when investing. Markets are psychological battlegrounds where one investor tries to out-game the other. You win by anticipating what others are thinking, not by deciding what is right or wrong.
Many are saying that gold is in a bubble. While gold has risen in value, it has not gone parabolic indicating that it has yet to reach bubble proportions. The bubble will be marked when your barber/grandmother/pet food retailer recommends gold as a great investment.
Gold may be in the early stages of a bubble. And that’s the distinction investors must realize. After-all, Greenspan first dropped his ‘irrational exuberance’ tagline in 1996…years before the Internet bubble burst.
Here are some noteworthy quotes from a recent Bloomberg article:
“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment,” Soros said at the World Economic Forum’s annual meeting in Davos, Switzerland, in January. “The ultimate asset bubble is gold,” he said.
…and one from guru trader Paul Tudor Jones
Gold is “just an asset that, like everything else in life, has its time and place. And now is that time,” Paul Tudor Jones said in an October letter to clients.
