Oil V Gold

U

UL in BAC

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I'm relatively new to the markets but have always kept on eye on what was happening. I have set up a fake portfolio to see how it would cope and it's up about 5% overall over 2 weeks.

I'm still a student from a maths and economic background and was wondering in other people's opinion which could increase by a greater percentage, oil or gold and why?

From what I have looked at (and this is my opinion only) I believe oil as the price is quite low but with the extensive threads on both it's hard to distinguish which is better and with a majority of people saying gold, it seems too good to be true.

Thanks in advance for any comments
 
i would say oil but it might not have an uptrend for a while
 
Read an interview of George Soros recently. He shared the "great" secret of his success, which is "keep your money in gold"
 
Askar said:
Surprising. Care to post the link?
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It wouldn't be unusual for Soros to talk "up " a product he was long in, wait for everyone to pile in pushing up the price, and then he closes out his position ! He's done it before.
 
soros made his money shorting the british pounds years ago. not in gold
 
Impossible to tell the movement of any asset class in the short term, especially in the current circumstances ! That is whay leveraged speculation is for mugs and best to invest passively for the long term in range of assets (especially in pensions).

In the Great Depression, oil and most commodities fell sharply for most of the 1930's while gold (which was money) was revalued up by 70% from $20/oz to $35/oz .
The dollar was devalued in order to try and overcome deflation.
Sound familiar?

Two articles which may be of interest re gold and oil are
[broken link removed]

This is interesting and has a good long term gold/oil chart:
[broken link removed]

Think what happens to government bonds and massively printed fiat paper currencies and particularly the dollar may be even more relevant than the oil and other commodity prices as they appear to have decoupled in recent months due to monetary reasons as they did in the Great Depression.
 
george.shaw said:
Impossible to tell the movement of any asset class in the short term, especially in the current circumstances !
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lol. It's incredible how many people don't understand that to make money from the short term movement of a product only requires that you call it right about one third ( or even less ) of the time, and of course you need to be trading the right product, through the right system and with minimal outlay.

That is whay leveraged speculation is for mugs
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The mugs are the ones who believe that.
 
george.shaw said:
Impossible to tell the movement of any asset class in the short term, especially in the current circumstances ! That is whay leveraged speculation is for mugs and best to invest passively for the long term in range of assets (especially in pensions).
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You have got that the wrong way around. It is easier to predict prices in the short term because of overbought/oversold conditions that need to work themselves out than it is to predict longer term behavior. Unless you believe you can predict the future.
 
I would have thought it more difficult to predict prices in the short term e.g. trying to predict the price of oil in March 2009 -v- the price in March 2012.

A lot of indicators are showing that oil and gold are only going one way, and that timing the market in the short term is too unpredictable given the drastic short term volatility and the forced liquidation of many asset classes.
 
Damian85 said:
I would have thought it more difficult to predict prices in the short term e.g. trying to predict the price of oil in March 2009 -v- the price in March 2012.

A lot of indicators are showing that oil and gold are only going one way, and that timing the market in the short term is too unpredictable given the drastic short term volatility and the forced liquidation of many asset classes.
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By short term I mean hours, days.

How do you predict prices years in advance?
 
I personally think gold and oil prices are going to increase in the coming years.

Oil scarity will continue while demand will most likely increase.

With the excessive printing of money at the moment, the inflationary effect will increase the demand for gold as a defensive strategy.

That's why I feel it is easier to predict these prices in the coming years, as opposed to predicting them in the coming months, weeks, days, and even hours. These overwhelming indicators make it rational to expect these increases.
 
You need to understand the way the mkt works - it prices in expectations.
 
That's true, but I feel there is too much information out there to be able to judge the short time movements consistently. The drastic swings that can occur in these assets make it a lot more difficult to predict short term increases or decreases in prices. Expectations can be irrational.
 
lemur said:
You need to understand the way the mkt works - it prices in expectations.
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Hmmmm - the good old efficient market theory. Not sure if in the unprecedented economic times with $8 trillion of bailouts in a matter of weeks (all the spending in the run up to World War II and it's aftermath was only some $2,900 billion) that the efficient market theory holds water.

In an era of financial irresponsibility and corruption (particularly on Wall Street) how can markets possibly be efficient?

Even Alan Greenspan has rejected this silly theory:
"The former Federal Reserve chairman has said that the big mistake he made was assuming that banks' self-interest would prevent them doing anything that would threaten their own survival.

"The information is priced in to the market"
Oh really - how can it possibly be when corporate executives and auditors are being more than economical with the truth.

Bear Stearns and Lehman Brothers collpased out of the blue - in the days before hand their management told us that their companies were ok and did not have solvency issues.

Please - enough woth the efficinet marklet theory - markets are clearly massively inefficient and it is impossible to tell what will happen in the short term - hours, days, months but it is somewhat easier to realsie what is likely to perform well in the medium to long term (months and years).

Leveraged speculators have made the world a casino and have screwed up the system for us all. In order to protect ourselves we must now properly diversify our long term investments and pensions with short term AAA government bonds, gold and safer froms of cash.

Please wake up.
 
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