23/03/2010 - Bob Prechter Reveals the Most Dangerous Gold & Silver Myths
Right now, the gold BULL-ion bandwagon is more crowded than a New York subway train during rush hour. But before you squeeze your way into the crowd of passengers, you should know one thing: Those steering the course are using outdated maps based on ill-conceived notions and illusory hopes.
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A FREE report keeps you on the right side of precious metals March 23, 2010 By Nico Isaac
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Nico Isaac writes for Elliott Wave International, a market forecasting and technical analysis firm.
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Where can you get better information about gold and silver? Take a look at the latest FREE resource from Club EWI, the Gold and Silver eBook. This riveting, 40-page eBook pools the recent and archived writings on the precious metals by EWI president Bob Prechter himself. The result is a comprehensive collection that spans the last four decades of gold and silver history to expose the most dangerous market myths. Off the top is this familiar bit of "wisdom" from the school of Alan Greenspan:
It is impossible to foresee the end of major trends in precious metals
BEFORE they occur. Hindsight is foresight.
NOT SO, says Prechter. Since gold and silver established their all-time record peaks in 1979-80, he has stayed one step ahead of the metals' history-making turns. Here, Chapters 2 and 3 of the Gold & Silver eBook offer up the following excerpts from Bob's earliest writings:
Silver
- November 18, 1979, Elliott Wave Theorist (EWT): With silver prices hovering near $20/ounce, Bob wrote: “If my wave count is valid, silver can be expected to drop back down to between $4 and $6, $3.20-$3.49 some time in the next decade.”
What actually happened: From there, silver prices embarked on a 13-year bear market that saw prices plunge into the $3.50-per-ounce area.
- March 26, 1993, EWT: “Silver is approaching a major bottom" of its decades-plus long downtrend.
What actually happened: Silver found its low in 1993.
Gold
- December 9, 1979, EWT: "After 13 years of rise, Elliott counts now suggest an important top is near in gold. The downside target is at least $282.50."
What actually happened: While the price projection for gold's peak was far off the mark (the Theorist cited the upper $480/ounce range), the time target of early 1980 was met with accuracy. From its 1980 peak, gold prices plummeted nearly 70% before hitting bottom in 2001.
- At the Crest of the Tidal Wave, 1995: “One attractive termination date for the gold bottom is New Year’s Day of 2001 (plus/minus a month). That way, it will have lasted a ... a lean 21 years from the 1980 peak."
What actually happened: Gold registered its low at $255 on February 20, 2001.
Now that we can see that it is possible to benefit from foresight about the end of major trends in precious metals, what about these other popular notions --
- Gold always goes up in recession and depressions.
- Gold always performs better than stocks in economic downturns.
- Gold and Silver are just beginning (as in the year 2010) their biggest bull market runs ever.
Download Robert Prechter's FREE 40-Page Gold and Silver eBook. Is gold a simple buy-and-hold at today's prices? The independent insights in this valuable ebook deliver Prechter's complete analysis and help you decide how to – and how not to – incorporate gold and silver successfully into your own investment strategy. Learn more, and download your Gold and Silver eBook here.
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