Caution Tape (Photo credit: Picture Perfect Pose)
Oct. 30
Don Coxe – one of the gurus followed in The Apprentice Millionaire Portfolio ( available from amazon.com )
His writing is always of interest and in his latest issue, we find these points that he wrote on Investment Recommendations, personally the most intriguing:
1. The US election matters. If Obama wins, the Democrats should also hold the Senate, but the Republicans would probably still maintain control of the House. Virtually the only concrete budgetary proposal Obama has made in two years is that the rich must pay more. That will have only tiny impact on the deficit. Therefore, the asset that wins from an Obama-win is gold. If Romney wins, he will attempt, and probably succeed, in negotiating a deal with the Senate, which the Democrats would barely control—if at all. If a credible budget deal were done, it would be good for stocks and bonds, but bad for gold.
2. The outlook for demand for agricultural inputs from row crop farmers is probably the best of all time. Grain prices are high, and carryovers are at record lows. Crop insurance has prevented most US grain farmers from losing heavily from the drought. Expect farmers to invest heavily. Meat producers are being skinned alive at the moment, but by midyear will be benefitting from much higher prices for hogs and steers.
3. The US has been experiencing the biggest deficits and lowest interest rates of all time. Both the Keynesian and Friedmanesque stimulus policies are being employed on a scale never seen outside banana republics or the Weimar Republic. Yet the economy moves at the speed of an arthritic octogenarian. The eurozone’s biggest contribution to the global economy is to make the US economy look good in comparison, thereby justifying the S&P’s lofty valuation. We grow increasingly doubtful. Caution is in order.
4. We believe that gold will break through the $2,000 level within the next year. Picking gold stocks without regard to political risks becomes somewhat more challenging as bullion prices rise, because many governments see higher prices as a justification for higher taxes and/or royalties. For this reason consult the authority of The Gold Investor’s Handbook – avaialble at Amazon.com Gold is THE Safe Haven Click here for investment profits and much more detail on the ins and outs of investing in gold
- On Oil and Gas: “Speaking from personal experience, the universe of oil, gas, oil service and pipeline stocks is so vast that investors should never abandon it. One advantage for these commodities: unlike metals, they can’t be recycled; gluts go away, and shortages always return.”
Related articles
- Invest in What China Needs to Buy: Don Coxe (theburningplatform.com)
- Obama Win Would be Good for Gold: Don Coxe (forbes.com)
