I continue to recommend that investors stay out of the stock market (except for my recommended stocks). Continue to hold ‘gold-cash’, not ‘dollar-cash’, thereby keeping your money safe and sound in bullion until stock prices fall to more reasonable levels when measured in terms of gold. I do not have any trading recommendations at the moment.
I received some questions about my comment in the last letter that in a hyperinflation “Both gold and the DJIA will rise, although I expect that gold will climb at a much faster pace. In other words, it is better to own stocks than currency in a hyperinflation, but gold will outperform stocks by a wide margin.”
To clarify this point, gold will outperform the general stock market. But importantly, most gold stocks will outperform gold. Therefore, if you are prepared to accept the risk of owning mining stocks, own those on my recommended list.
Note though that I say “most gold stocks”, which clearly does not mean all of them. Some gold stocks will underperform. It is inevitable that some gold stocks will be buffeted by the risks that come with owning stocks – like political risk, bad decisions by management, acts of God, etc.
As they say, it is a ‘market of stocks’ and not a ‘stock market’. There are many sectors, and the best performing sector in a hyperinflation is the gold mining stocks.