Flippin through the channels last night I came across Cramer on Mad Money. When I first became interested in the market I used to be fond Of Cramer or so they tell me. Anyway he suggested buying a gold stock as a hedge against inflation "when the FED lowers interest rates next week". Great idea Jim Ive been doing that for the last two years welcome to the party. You see what Jim isn't telling his good audience is that he's also been buying gold and gold stocks, that the rate cut will already be priced in and that he and his pals will be locking in profits as the market sells the news. Then gold falls along with the gold and silver stocks and the retail investors come up short again. Now the gold and silver mining stocks are a great place to be for the long term, but Carmer will get right back in just after he tells his audience to get out of the gold stocks. Think I'm just picking on poor ole Jim? take a look at the chart of the gold miners index GDX (Link 1). You can see the place to buy was 35 to 40 range to buy and that's where Jimmy got in, not the 45-55 range. I can see this one a mile away,Jimbo wants suck the retail investors into gold and the gold stocks on the rate cut rumor, then he will sell them into the rate cut news. If the GDX were to drop below it's current support of 45 it will likely fall all the way to it's prior support of 35. That's where he'll tell you get out, but that's the place to buy. Now the big money the institutional investors flood back in until they figure they have squeezed every last cent out of the new rally-except yours that's Jimmy's job. That's when Jim again finds another reason to get his viewers back into gold and gold stocks. and the beat goes on and the world goes round and round.
So look out, he will entertain you and give a good tip in between times, but you can bet that whenever Jimmy&pals want to take profits he will tell you to get in and tell you to get out when he wants in. In or out long or short he will be the first to screw you. And that's Cramer's golden rule.
You may ask how I know all this? The same way I knew the rumors that Warren Buffet was buying Countrywide Financial and Bear Stearn's as I was short them, the same way you know your fifth grader is lying to you and because you can hear him for yourself. (Link 2)
This you just gotta hear to belive (Link 3)
Link 1:http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gdx&sid=0&o_symb=gdx&freq=1&time=9
Link 2:http://youtube.com/watch?v=GOGLvxqAk4A&feature=related
Link 3:http://youtube.com/watch?v=yxPH9ng50cQ
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2 comments:
If you do some checking a short while back Mr C was hot on Nova Gold(NG) as the gold stock to own. I don't remember exactly the price at the time was in the upper teens. Now its like 9 and Mr C won't touch it with a 10 foot pole. Isn't it a better value at 9 than it was at 19?
Well it closed @ 9.38 today. It would be a better value above 10 than under. Whatever happened to it on Nov. 20 th at least all of the sellers were pushed out. If new buyers are to come in and push it to all time highs then it must clearly trade above 10.If it fails to attract new money i won't go much beyond 10. Also you can see the drop under 10 a rise above 10 and the ensuing downtrend. Notice how they are trying to break that downtrend line? I would want it to break that prior little peak above 10 before I get in. Let's say 10.50. So go long 1/4 position above 10.5 and be out otherwise, but don't just buy now make NG prove that it can attract new money.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ng&sid=0&o_symb=ng&freq=7&time=18
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