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October
17
2019

The Caveman’s Diary 2019: “Gold Good… Stocks Bad… Get More Gold”
Jeff Clark

A textbook in my Master of Psychology program theorized that most things in life come down to core drives—food, shelter, sex, etc. Throw in Freud’s pain and pleasure principals and this is supposedly what drives everything we do.

We had a good time poking fun of simplistic theories as to what motivates people. Human emotions and motivations are complex.

Except when it comes to money.

Our wallets are more often than not ruled by our most primal emotions, greed and fear, dating back to the days we huddled in caves. Despite all our sophistication and modern technology, most investors still think like a caveman/cavewoman when it comes to investing.

And what’s happening in the markets right now is so clear that even a caveman can see it.

See if you think 2019 will go down as the year one should have sold stocks and bought gold…

“Gold Good, Stocks Bad”

We read a lot of news around here, and while it isn’t obvious to most mainstream investors yet, there is a definite undercurrent in the markets right now. This trend shows that investors are moving away from stocks and toward gold. And not just by a little bit.

I put the different categories into boxes, and compared Then to Now. What message do you get from all this?

First up, gold funds and other holdings.

Next, trading volumes on gold around the world.

Third, central bank gold activity.

Last, here’s what stock insiders and others are doing right now.

As you can see, interest in gold is growing, while interest in stocks is fading. If I didn’t know anything else and just looked at this data, my gut would tell me it’s time to move away from stocks and into gold.

Big trends play out over years, not days or weeks. As more and more investors transition away from stocks and into gold, this trend should get bigger and stronger.

Is this the time to be a simple caveman or woman and buy gold and sell stocks? Only you can decide for yourself, but you probably know our answer.

One of the worst things an analyst can do is make a prediction that includes both a price and a date. Odds are you’ll end up with egg on your face.

But one thing we can do is look at history. Today’s gold bull market won’t be identical to others in the past—but history does provide clues about how high the price might go based on prior trends.

By my calculations, there have been five gold bull markets since it was legal to own again in 1975. Here are the percentage gains of each, plus how long they lasted.

goldsilver.com