Forum Archive Index - May 2002

["Ben Dutton" <bendutton@sharechat.co.nz>]

Some great posts on Gold here and it's fantastic to see some of you making
some serious returns - congrats, and may it continue for a long time.  But I
can't help but draw comparisons to the hype currently surrounding gold to
Internet stocks in 1999.  Now, for you traders and active investors - that's
great.  Make some money - hell, make lots of money.  But others (perhaps new
investors to the sharemarket) I think should take heed and be a bit more
careful.  Buying gold stocks is not for everyone because, when gold does
crash down to earth (which for the reasons below I think it will) people
will be burned just like April 2000 or 1987 etc etc.

Why do I think this is turning into a speculative bubble?  Well, what's
gold?  Does gold have any real practical value in the world?  No.  Gold is
just another currency, whose value is determined by speculators and
perception.  It doesn't make software (Microsoft), drinks (Coke), jet
engines (GE) etc etc.  As Snoopy's humorous quotes illustrated - what are ya
gonna do with your gold post-apocalypse?  Flake it off?

The link to Gold Eagle that Nick sent in was relatively amusing.  The vast
US government conspiracy against gold.  I just know Rubin and Summers were
lying awake every night, thinking about the price of nuggets and how to
subvert them.  Or maybe not.

Anyway - gold is great if you're on board the train.  But watch out, because
it will get derailed somewhere along the path.  And I just don't want to see
new investors jumping in without thinking or knowing what they're doing then
losing out and losing faith in the markets.

Best Regards

Ben Dutton
(Thinking about getting a gold filling).


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