The amount of nonsense I come across misleading readers, or simply providing bad advice, makes me cringe. Sometimes our own site presents such information like discussing penny stocks and technical analysis.

In general, I distinguish bad advice, misleading or misguided information from that regarding a stock idea that simply did not pan out, of which I have been guilty too -- all of us have hits and misses. However, a post I read on Seeking Alpha promoting gold, with suggestions of doom by tailoring the data to fit the theory. The author supported his point by back-testing only ten years to a known low water mark.

This is not to say that there is not something of value to be gleaned from the story which is about more than gold, but the author chooses to give space to extreme views and some suspect data points.

There is a simple reason that over long periods of time gold under performs a broad based basket of equities available in the stock market. The price of gold fluctuates with demand that is created by fear, and the perception of scarcity. Like stocks, gold may be a good value at times, and not others. Is it really wise to invest in anything when it is at an all-time high, and driven by fear?

A review of history indicates that the price of gold fluctuates wildly and has not even kept up with inflation over the past 35 years.

The following chart comes from Gold Price

more HERE

Posted by Mr Thx Saturday, December 12, 2009


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Sekapur Sirih Seulas Pinang

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Alor Gajah, Melaka, Malaysia
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