Another great buying opportunity for gold and silver or do you buy Japanese equities like George Soros?Posted on 08 June 2013 with 1 comment from readers
Friday saw another big sell-off in the precious metals space as professional investors reasoned that their short-term risk capital might be better employed chasing up US or Japanese equity prices.
George Soros has apparently started buying Japanese equities, having previously dumped his holdings with remarkably good timing just before the recent 21 per cent collapse. For this trade we can see plenty of good logic. He is playing the volatility of the Japanese Nikkei index like a violinist on a Stradivarius.
Last in, biggest losses
However, those US investors piling into stocks at this late stage of the rally risk being the last people to arrive at this party. Last in, biggest losses remember. The bubble could grow like the Nasdaq in 1999 but remember how that ended in tears? Is your timing that good?
Meantime, George Soros has also recently taken an extremely high risk bet on the gold junior share index that we previously revealed in an exclusive (click here). This index took a big hit yesterday but is likely still higher than his strike price.
So the opportunity is there for anybody who missed the initial sell-off of gold and silver to buy now. Talk of gold dropping to $1,000 by Dr. Boom Nouriel Roubini is nonsense (click here). He also expects the Dow to carry on rising for a couple of years. Still he also predicted a crash right after the start of the four-year rally.
Dr. Boom is an economist, not a market trader, and seems to have caught a nasty dose of QE. We would sooner follow old George into this particular house of the damned. Everything he touches seems to turn to gold, and he is long $240 million in the king of metals at present.
Japanese equities also look a winner, just so long as the yen carries on appreciating at the same time. But that cannot go on for much longer – because a strong yen is bad for exports – and unless you have the ear of Mr. Soros you might end up missing the call to sell.
High volatiility is going to be the name of the game for the next few months, perhaps years. It’s easier to lose your shirt in such an environment than make a profit. We would rather buy what looks cheap than what is already expensive, but hey that is really up to you.