A quick note on some of our commentary in April — it has been an interesting month for TBP.

On April 9th, I mentioned that the Great Rotation theme was incorrect: It was not stocks into bonds, as is so commonly claimed. Rather, it was a New Great Rotation: Commodities into Bonds. Since then, Bond yields have plummeted and gold has collapsed. Had I followed my own insights and put on a Gold short/Bond Long trade, it would have made some money. Alas, we are investors not traders.

This led to a comment asking the question: What Are Gold’s Fundamentals ? Most of the Gold investors I see have a flawed understanding of what drives gold prices. That was followed with World’s Biggest ETF/Contrarian Indicator: GLD > SPY.  As far as contrary indicators go, this was similar to Pimco Total Return Bond Fund surpasses Vanguard S&P500 fund to become the largest mutual fund back in October 2002.

We did a few interviews as to why Gold was collapsing, including this one on BNN (Gold country). It is nuanced, and apparently not what people were expecting.

This all culminated in yesterday’s 12 Rules of Goldbuggery — which went totally viral.


Back shortly . . .


Category: Gold & Precious Metals, Valuation, Weblogs

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Update: Rotation, Gold and Markets”

  1. Chief Tomahawk says:

    “This all culminated in yesterday’s 12 Rules of Goldbuggery — which went totally viral.”

    Sounds like the makings of another Washington Post column.

  2. Moss says:

    I think the bigger picture is that deflation is now in the lead again. The inflation crowd may have thrown in the towel. Rest assured the next round of easing will begin. South Korea already announced it to battle Japan. Europe will lower rates, China will do something then back to the US and the UK. I do not think the Fed is going to do anything to reduce or withdraw the latest QE. It is all talk.

  3. Pantmaker says:

    Commodities are collapsing because the economy is in the crapper. Hopefully the new and improved great rotation will be people heads from their asses into reality.