- The Big Picture - http://www.ritholtz.com/blog -

Bitten by the Gold Bug? Some Lessons

Posted By Barry Ritholtz On January 12, 2014 @ 9:30 am In Apprenticed Investor,Gold & Precious Metals | Comments Disabled




I did something different with my Sunday Washington Post Business Section this week. Starting with the 2,500 word long form discussion I wrote for Bloomberg [2], I simplified this and edited it down to half that length.

The print version had the headline Bitten by the gold bug? You’ll do well to heed the past [3], while the online version was titled A gold enthusiast? Listen to the head — and history [4]). For those of you unfamiliar with media, the headline is typically written by an editor, and not the writer. (this is an adaptation that bloggers are forced to uncomfortably make when playing in MSM playbox). I still prefer the headline I wrote on Wednesday, 10 Lessons Learned from Gold’s Epic Rise & Fall [5].

The goal of the WaPo version was to take the basic investing concepts from the longer form version and make them more accessible to a general audience. I think we accomplished that.

Toward that end, here are the 10 lessons as written in the WaPo column:

Lessons from Gold’s Rise & Fall

1 . Beware the narrative
2. Carefully examine new investment products
3. Ignore history at your own peril
4. Leverage is always dangerous
5. Understand the circumstances of the moment
6. Don’t be unwilling to walk from a bad investment
7. Ask what is already reflected in the price
8. Don’t guess
9. Ignore end-of-the-world tales, conspiracy theories and other nonsense
10. Listen to the skeptics

The idea was not to make a call on the near term direction of Gold. (As I noted recently, I haven’t the foggiest notion whether gold goes up or down from here). The idea was to see what investing lessons could be learned from the errors others have made.

I hope you find it useful . . .



A gold enthusiast? Listen to the head — and history. [6]
Barry Ritholtz
Washington Post, January 11, 2014

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2014/01/bitten-by-the-gold-bug-some-lessons/

URLs in this post:

[1] Image: http://www.ritholtz.com/blogwww.washingtonpost.com/barry-ritholtz/2011/03/31/AFWBwIBC_viewAll.html

[2] Bloomberg: http://www.bloomberg.com/news/2014-01-07/10-reasons-the-gold-bugs-lost-their-shirts.html

[3] Bitten by the gold bug? You’ll do well to heed the past: http://thewashingtonpost.newspaperdirect.com/epaper/viewer.aspx?key=p%2F9dxkfA95UcbcY%2Bj2RkUM67KGAjEiHWOkSj11cTn9BznnzbieLeMZURPgVZyExR%2FXen4UFGZ13x%0D%0AbK1IeFrXmadxUuABeUqpE0p131aEHoNMqTbfxLblVFEUlsP6%2Bm%2B69f6fz%2Fq81UY%3D%0D%0A

[4] A gold enthusiast? Listen to the head — and history: http://www.washingtonpost.com/business/a-gold-enthusiast-listen-to-the-head--and-history/2014/01/10/d00d6cd2-762d-11e3-b1c5-739e63e9c9a7_story.html

[5] 10 Lessons Learned from Gold’s Epic Rise & Fall: http://www.ritholtz.com/blog/2014/01/10-lessons-learned-from-golds-epic-rise-fall/

[6] A gold enthusiast? Listen to the head — and history.: http://www.washingtonpost.com/business/a-gold-enthusiast-listen-to-the-head--and-history/2014/01/10/d00d6cd2-762d-11e3-b1c5-739e63e9c9a7_story.html

Copyright © 2008 The Big Picture. All rights reserved.