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Tech Passes "Sell By" Date

Daily Rap 04-19-2013

Overnight markets were pretty much a nonevent, although I would have expected with earnings season having been so poor, and the world economy so weak that even IBM was unable to pull enough levers to make the earnings estimate, that the tape would have been under a lot of pressure today. The technology sector has been just horrendous, as IBM, SAP, Oracle, Accenture, and Infosys -- which encompass a very broad spectrum of world GDP -- have all had real problems. Almost everyone else has stumbled as well, with Microsoft one of the lone exceptions, where perhaps expectations were low enough that its numbers were not a problem, even though they were not great. After all, the company does have important new products that are rolling out, albeit...more

Last year's posts for Ask Fleck

Q: Hi Fleck - I feel for those of your readers who feel lost. Despite a 350% rise in gold in the decade when I first started taking your advice, because of the meltdown in miners, I'm at break even today with NEM being below my $35 initial position at $400 gold. Of course break even means in USD, which has lost so much of it's value that I'm really down by 50% or more.

I don't have any question about how the end game will turn out, but I arrived at this point by accumulating steadily throughout the ten years with investments steadily becoming larger as my income grew (from age 30 to age 40). This strategy worked great without the burden of trading any positions for nine years, but now I'm in shock from being no further ahead had I done nothing.

My question is, how do I learn from these mistakes? With the benefit of hindsight, should I have kept my powder dry in depreciating cash while waiting for the right moments to buy in vast quantities and selling at peaks? That might have worked for the miners, but for gold, I only see three buy the dip time periods.

Fleck: It is really a great question. Obviously, gold has done far better than most all miners. And the lesson is one I learned the hard way as well, and that is that there is the main market -- gold -- and there is the derivative market -- miners.

Oftentimes the derivative of the "thing" does better, but sometimes the "thing itself" does best, and up until now, the latter has been the case.

I sensed that a few years ago, and began trading my miners (and noted that I would be doing that, so everyone would know). In the next up leg, miners may do better, but I am still going to trade them until I am convinced that is the case. I hope that helps.
(posted: 4/19/2013)

Q: Bill,

Kyle Bass

This article appears to mirror Kyle Bass in his feelings about Japan. One of the knocks against gold is that we are not seeing inflation. Is it possible that we have something other than inflation be the trigger for money to move into gold in a big way.

I would assume that inflation would ultimately be a problem but maybe it would not be the main catalyst to gold taking off in price.

Fleck: It could be any numbers of catalysts that wake up the gold market.
(posted: 4/19/2013)

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