A Very Tricky Bear - Buy Gold

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Gold is beholden to no government and to no central bank. Gold has no counter-party. Gold possesses the unique distinction of being wealth on its own. Gold haters and ignorant investment advisors fail to understand that fact. History tells us that these morons have to learn the hard way, usually by going broke near the end of a vicious bear market.

I've written that one of the most difficult things to do in this business is to enter early in a bull market and to "ride the bull" through the greater part of the bull market. By the same token, one of the difficult feats in this business is to exit early in a primary bear market and stay out until the bear market is within striking distance of its final low. I intend to do that, and I am going to badger my subscribers into doing the same thing.

Wall Street makes its living by selling its wares to the public. If Wall Street can't sell one variety of its wares to the public, then it dreams up another item. In this business, it's always a case of "buyer beware." In a bear market it becomes progressively more difficult to sell anything. In the final phase of a bear market, it becomes impossible to sell any item to the public. People "want their money back," and they'll sell anything they have to do that. That's always worked in the past, but I'm wondering if maybe this time is will be different. The reason I say that is that this time there may be serious questions about the dollar. Will people or institutions sell their best equities for questionable Fed notes?

That's where gold comes in. Gold is beholden to no government and to no central bank. Gold has no counter-party. Gold possesses the unique distinction of being wealth on its own. Gold haters and ignorant investment advisors fail to understand that fact. History tells us that these morons have to learn the hard way, usually by going broke near the end of a vicious bear market.

The bear is mean, and he's pitiless. Advisors and analysts today are relatively sophisticated compared with the breed of the past. For this reason, I believe that this bear market will be trickier and more subtle than any before it. Already, the "internal market" has broken down in the face of a rising Dow and in the face of all the "good-time" news. What else does the bear have in store for us?

Frankly, I don't know, but my guess is that somehow the bear will have us believe that we are missing out on potentially great profits in the stock market. Already, we have experienced a juicy counter-trend advance that has recouped a good portion of the 2007-2009 losses.

That's encouraging, and it has served to turn many well-known analysts and advisors bullish and optimistic. A recent Bloomberg survey of 2000 advisors showed that the majority of these "experts" believe the market is headed higher. Great, so give the bear a gold star and a cigar. He's won an early round. It's going to be hard to stay out of this bear market. But I'm going to do it, and I hope most of my subscribers will too.

Legendary newsletter writer Richard Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter).

Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron's during the late-'50s through the '90s. Through Barron's and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-'66 bull market. And almost to the day he called the bottom of the great 1972-'74 bear market, and the beginning of the great bull market which started in December 1974.

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