Q: Any thoughts?

Fleck: My least favorite family of questions involves requests for my "thoughts." Please make your questions as specific as possible. If you're really interested, see the "Fleck's Thoughts" links listed in the left-hand column of the site.

Q: When do you think __________ will happen?

Fleck: Often enough I find I have a good idea about what will happen, but not when. Timing is difficult to impossible to get exactly right, and in my opinion people focus way too much energy on it. My approach is therefore all about being alert to the clues that what I expected to happen has begun.

Q: How or when can I invest in your fund?

Fleck: My fund is currently closed to new investors.

Q: Do you think there is a "plunge protection team"? Is the stock market manipulated?

Fleck: The Working Group on Financial Markets (aka the "PPT") does exist. But the thesis that it or any other part of government somehow manipulates the stock market on a day-to-day basis is not credible, largely because there are too many adversarial moving parts and keeping such activities a secret with so many people involved over the years would be impossible.

Q: How do I, or should I, open a foreign bank account (China, Canada)?

Fleck: I have an account in China that holds money I was paid for an appearance there. I don't know of a way to have a renmibi account outside of China and it is not easy to get money into the country. As for Canada, I have an account at CIBC because of their private banking services. Opening a Canadian account requires a passport and another photo I.D, plus a reference from a U.S. bank you have a relationship with. The level of service you get after that is a function of how much money you wish to deposit in either the bank or the custodial section. As for should you open a foreign account, you have to decide for yourself. I don't see a big need for an Asian bank account, but the Canadian banks (and currency) are stronger than the American ones, which works for me.

Q: What is the best way to buy gold: bullion, coins, futures, or ETFs?

Fleck: There is no best way. You need to do what you are comfortable with. There are advantages and disadvantages to each. If you own physical you need a safe way to store it, but it is money that is "out of the system." Owning futures is probably too complicated for the average non-professional investor. There is nothing "wrong" with owning the GLD or PHYS ETFs, other vehicles just work better for me.

Q: How/where should I buy physical precious metals?

Fleck: I use Kathy Derbes. Her Web site is www.kdpm.com.

Q: What is deflation?

Fleck: "Deflation" is a greatly misused word. Folks sense its onset whenever they see lower prices in any asset class or any group of asset classes. That does not signal deflation. Deflation is when the dollar appreciates against a basket of goods and services. Or, said differently, your dollar goes further. Also, see the Rap on 4/22/2004.

Q: What is the bullish case for owning precious metals?

Fleck: Gold and silver (and I almost always mean both when I refer to gold) have an unequaled track record as stores of value and mediums of exchange throughout human history. I.e., they are money, in the truest, soundest sense of the word, and offer what I think is the best protection against the inevitable debasement of fiat (paper) currencies worldwide, but particularly in the U.S., as well as inflation.

Q: If the market tanks, what will happen to gold, silver and the miners? Will rising rates hurt precious metals and related ideas?

Fleck: First of all, these are markets, and anything is possible, and in a liquidity crisis (i.e., a "crash") most everything gets sold. But remember, not every stock selloff is a liquidity crisis (2008 was an extreme version of one). Stocks and gold have no real reason to be correlated. Gold isn't a "risk on/risk off" idea; an investment in gold is about a lack of confidence in currencies and central banks. People the world over are generally under-invested in gold and over-invested in paper, so I see buyers at the margin everywhere and at all times. However, gold is a market like everything else and it has its violent corrections, which are hard to anticipate (miners are a derivative of gold and have extra baggage, making them even harder to predict). What all this means is there is no reason to think that gold and miners should sell off if stocks do, but they might. You must decide what you think about all of this and plot a course of action that makes sense to you.

p.s. As always in this type of discussion I mean silver too when I say gold.

Q: You have said certain ratios (i.e. Gold/Silver, Gold/XAU) "don't matter much." Do you feel the principle of mean reversion is really no principle at all?

Fleck: Mean reversion I believe in, but most of the ratios are too nebulous and thus I don't pay attention to them.

Q: What are your views on uranium, oil, platinum, natural gas, and other commodities?

Fleck: As a rule, trading commodities is extremely difficult, time-consuming, stressful, and an incredibly reliable way to lose money. Most do-it-yourself investors would be wise to stay away, and most professionals don't need my guidance on the subject.

Q: What is your opinion of owning TIPS?

Fleck: Here is a well-stated TIPS primer from one of our readers: "If you only had two choices with your money, it would make sense to buy TIPS over conventional Treasuries. They are pricing in outright deflation as far as the eye can see (well, until very recently, but they still price in very little "inflation"), which is unlikely. If even a modest amount of inflation shows up in the CPI over the next several years, you win (again, versus conventional Treasuries).

"However, given an infinite number of choices, I would rather do something else with my money. With TIPS, you are lending to the government for practically nothing in return, then asking them to tell you each year how much extra they will compensate you for losing your purchasing power. It would be like giving a mechanic a blank check and telling him to fill in what he thinks is fair. Your car is fixed, but you got hosed.

"And if the long end cracks, a 10-year Treasury and a 10-year TIP will both tank -- there is just no way the CPI will keep up with whatever the bond market is sensing. So short duration is still key, irrespective of the instrument.

"Remember, there is no free lunch."

Q: Who is __________________?

Fleck: Always try the Friends of Fleck section of the site first for people I mention regularly. If they are not listed there, search the Web.

Q: How can I subscribe to the Lord of the Dark Matter (LODM)'s service?

Fleck: First of all, his service is designed for professional, institutional investors, and so is the fee (over $25,000 per year, depending on what level you want). He considers individual requests to subscribe on a case-by-case basis, but keep in mind there are compliance and other regulatory checks that must be met. Second, to protect his intellectual property, he does not take on brokers or advisors as clients, preferring to deal directly with the end user. This, of course, is part of the reason he also prefers to remain anonymous. If you are still interested and think you might qualify, send Bill an Ask Fleck submission and he will forward your request to the LODM.

Q: Are you a contrarian?

Fleck: I am often labeled as such, but I believe being contrary just to be contrary is a fool's game. You can't fade every single sample set you find. Contrary for contrary's sake is unrewarding and unpleasant.

Q: I found a stock I think is way overvalued. Should amateur investors short stocks?

Fleck: First of all, valuation is never a good enough reason -- on its own -- to short a stock. Second, I think short selling for folks at home is extremely dangerous to your capital. You have to watch them constantly and there are way too many ways to get tripped up.

Q: Do you give personal financial advice?

Fleck: 1. I am not a financial advisor; thus, I do not offer nor can I provide individual advice to readers in response to questions on their investment portfolios.
2. I do not give advice on specific stocks. When I mention a stock in the Rap that I own, I list it at the bottom of the column, in the interest of full disclosure. My feeling is that you should know if/when I am "talking my book."

Q: Do you think the silver market is manipulated?

Fleck: No. Silver is a thin market, and it is possible to push the futures around to some degree (which does happen); thus, silver is extremely volatile and always has the potential to go berserk -- in either direction. But massive collusion to suppress silver prices is nonsense -- not to mention, if it did exist, they have done a terrible job. "But what about the Hunts?" The Hunts weren't stupid, they just got beaten. "But what about JPM?" Silver is not where it is because JPM was short it. My silver buddy, who is very experienced as a silver trader, would tell you that story is nuts, as would my friend who in fact used to trade the silver book at JPM.

Q: Are you worried about deflation? Do you anticipate hyperinflation?

Fleck: I have never believed in the case for deflation. The Fed prints too much money to worry about that. As for hyperinflation, it is in the realm of possibility, but it won't happen until after we have a funding crisis, thus it will not be a surprise, to Rap readers at any rate.

Q: Do you still own _________________?

Fleck: If I mention a stock I own in the Rap, I list my position at the bottom. If you are curious about a particular company, search the site for that company's ticker symbol to see if I have ever listed a position and if so, how recently.