Steven Bauer, Ph.D.: Forecasting Industry Groups and Commodities i.e. their ETFs is very similar to doing my Analytics on any Sector or grouping of any given security. For me it is more fun but it requires much more time than grinding the analytics for a single Company – just more meat to chew on. When you hit “Gold / Silver” meaning when you identify a Commodity that is about to turn Bullish or about to turn Bearish, you have a bonanza that needs to be exploited. That’s why I do my Forecasting so diligently and have for decades.
Without my Forecasting Methodology, making timely and “Wise” investment decisions my work / analytics just leaves those (would-be profitable) Companies, Commodities and ETFs on a long list somewhere other than in your portfolio where they should be.
All this work / analytics has to do with what I refer to as my “Rotation Model.” Within the realm of my Forecasting, the risk as well as the reward ratio can be very accurately calculated – ahead of taking positions. This quickly separates those securities with a high probability for future profit from what I call “the also-rans.”
So, for me, the rhetorical question is: why not invest in those securities that offer the lowest possible riskand the highest possible reward? A rather simple deduction, don’t you think? You might like my article “Risk and Reward” discussing this aspect of my work / analytics.
Gold, Silver and all precious metals can be very profitable and also very painful. Currently we are in the“painful” stage and that does not appear to be changing in the coming days or even weeks. Many years ago I published this article. It has to do with “Perspective” a word that I often share when writing or advising. I hope it helps you. Gold & Silver – a Perspective.
Some Analysts do their jobs consistently well and others do not, it is just that simple.
My Basic Views on the Gold Mining Industry
As mentioned in my Rotation Model article – all securities move from Bullish to Bearish and back again to Bullish just like the U.S. Indices / Global Indices / Sectors / Industry Groups and all Companies, Commodities and ETFs. There are always current Big Winners and unfortunately always current BIG Losers — the trick is to be able to sort “calculate” (see above) the current Favorable from the current Un-Favorable. (Please study the below table; it has been “Un-Favorable and “Red” for a very long time.)
My focus in Forecasting is “WHEN.” When is it prudent to own a Company / ETF for the ride UP? Please remember, there is also the ride DOWN that needs to be carefully monitored! It is kind of like taking your family for a drive to a fun destination. The kids always say: “Are we there yet?” Patience is also not a long-suit for children and very often is NOT for many Investors. I just try to help with my on going guidance and direction and it always seems to get us where we want to go or be!
You may want to visit my Performance article on Gold: Gold 5 – Year Performance. Silver is (approximately) twice as volatile as Gold and should always be treated independently from Gold. Silver 5 – Year Performance.
Together Gold and Silver has been, I said “has been” a great place to have invested your money in recent years. However, my Forecasts suggested at the top over two years ago that these good times are waning, if not over. Forecasting is a necessary part of ‘Investing Wisely” and that converts to consistent results.
Gold and Silver for me has performed brilliantly. However, over the years, it has also taken some major hits of over 50% and that will occur again. I will keep you posted. Please scroll down to my fifteen year chart, it tells you quite an interesting story. I hope you are prone to listen to such stories.
I have long since taken profits and suggest you give consideration to do the same.
For me – Tracking the Fundamentals – is heavily weighted (weighting = 40%) in my analytics and my Valuation Methodology is by far the best I have come across in well over 50-years of routinely doing this task on many Companies / ETFs. I am a Very Cautious Asset Manager when it comes to preserving profits. Once I have them “profits” going for me and I often do, I am quite willing to take profits and not even consider two things. Those two things: a) what it goes higher? – and – b) rely on my Forecasting and Analytics to guide my bottom line.