5 Things Every Investor Should Do Now - Part 5 of 5

This is the final segment of the 5-part series "5 Things Every Investor Should Do Now". This segment was actually done before the November 2012 elections but Hurricane Sandy delayed its posting. Please view it and I hope you share it with others.

The 5-part series is now more important than ever:



To view the previous 4 segments, Go to my youtube channel "paulmlad".

I wish all of you a safe and happy Thanksgiving!

Paul Mladjenovic
Ravingcapitalist.com

P.S. Because the economy will get worse and many hazards are coming our way, it is important to be informed and prepared. Get a free subscription to the Prosperity Alert and stay a step ahead.

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5 Things Every Investor Should Do Now- Part 4 of 5

Investing can be a dicey pursuit (as it has been in recent years). With that, I post this.

This is part 4 of the 5-part series "5 Things Every Investor Should Do Now". Part 5 should be up within the next few weeks:




In the coming weeks you will see an educational program that will reflect this post and help you put into action what the video covers.

Thank you for viewing....I look forward to having you visit again.

In the meanwhile, check out the latest program:

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P.S. to be alerted to the next issue (or video), follow me at
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5 Things Every Investor Should Do Now; Part 3 of 5

This is part 3 of a 5-part series. You can see parts 1 & 2 at my youtube channel found at
http://www.youtube.com/paulmlad

In part 3, I cover another point that I believe is important not only for investors, but for everyone in our uncertain economic times:





Here are some take-away points for viewers:

1) Get a free subscription to the Prosperity Alert email newsletters. New Subscribers will get
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2) If you prefer to only get the report mentioned in this video, "15 Ways to Make Money in Your Spare Time, then CLICK HERE.


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I wish you a great year...make it great!


Regards,

Paul Mladjenovic
http://RavingCapitalist.com
http://www.ProsperityNetwork.net

P.S. make sure your family and friends are ahead of the curve too. Share this post with them!

Warren Buffett vs Gold and Silver…and the Winner is…

Recently, the folks at Berkshire Hathaway have talked down precious metals. Warren Buffet and Charles Munger (two titans of the stock investing world) had made some unkind remarks about precious metals in general and gold in particular.

I have tremendous respect for them (who doesn’t?) and I think that if the topic is “long-term stock investing” then few (if any) could match the performance they have racked up in recent decades. I wish them continued health and prosperity! But I write this essay for a very specific issue and that is their attitude towards precious metals.

I believe that it is a less than stellar record when you scrutinize it. If you were an investor with them you would obviously be doing it by investing in Berkshire Hathaway, right? Therefore, we could easily construct a scenario where we could have pitted their stock against those barbaric and unproductive metals, gold and silver.

Let’s imagine that you broke up your portfolio into 4 parts and invested equally on the first trading day of 2000 into the following entities;

1) Berkshire Hathaway class A stock
2) Berkshire Hathaway class B stock
3) Gold
4) Silver

How would that type of portfolio performed since the beginning of the millennium?

1. Berkshire Hathaway class A stock started at $54,800.00/share and closed on April 30, 2012 at $120,800.00 for a total percentage gain of 120.44%. Nice!!

2. Berkshire Hathaway class B stock started at $35.40/share and closed on April 30, 2012 at $80.45 for a total percentage gain of 127.90%. Also Nice!! (please note that the stock price quoted here is adjusted for stock splits)

3. Gold started January 2000 at $282.05 (Kitco.com closing price 1/4/2000) and closed on April 30, 2012 at $1,651.25 for a total percentage gain of 485%. Ultra nice!!

4. Silver started January 2000 at $5.30 (Kitco.com closing price 1/4/2000) and closed on April 30, 2012 at $31.20 for a total percentage gain of 488%. Ultra nice again!!

Given the above, one can see easily that the two most popular precious metals outpaced the stalwart Berkshire Hathaway by nearly 4-to-1 over nearly 11 ½ years! Bashing precious metals for being unproductive is certainly uncalled for…especially given that amazing comparison.

If you noticed, I didn’t choose some arbitrary period like a single year or other short-term measurement. As most of you know, Mr. Buffet (to his credit) is a true long-term investor and patience has been his “secret” to success. He typically doesn’t trade stocks or decides to jump in one day and jump out the next. “Buy and hold” for him is not some flashy saying…it is part of a long-term discipline approach to wealth-building.

Therefore, I think the comparison in this essay is valid.

Look…I like stocks and I like precious metals and my Dummies guides on these two topics attest to that. When times are good (I look forward to that), stocks will most likely lead the pack. But when times are as uncertain and as dangerous as they have been (and still are!), you need diversification above and beyond mere paper assets.

There will be plenty of good stocks that should do well during the next few years but I am definitely very bearish on the overall stock market because the massive risks from many venues are still there and in some ways growing more dangerous.

Yes…there will come a day when I am not bullish on gold and silver. However, given that politicians, government bureaucrats and central bankers have not stopped their massive financial and economic mismanagement, that day is still very far away.

------------------------------------

Coming this month to subscribers of the Prosperity Alert the new report "the Precious Metals Consumer's Buying Guide"...free! To get your free subscription, CLICK HERE.

The Silver Reverse Bubble of 2012

Copyright 2012. Paul Mladjenovic. All rights reserved. In late 2008, when silver was massacred in the futures pit and saw its price fall from over $20 to under $10, I told my readers at that time that silver entered into a “reverse bubble”. I know it sounds odd, but let me re-visit the concept. As you know by now, a “bubble” is when an asset reaches an unsustainably high level due to artificially stimulated demand. In 2004, I wrote that housing was entering a historic bubble because government policies such as excessively (artificially) cheap credit inflated the price of real estate to nose-bleed levels. The real estate mania was everywhere in 2004-2006 as buyers were going berserk. At the time, I had done a seminar with my favorite real estate expert (David Corsi…look him up!) entitled “Housing Bubble Profits” and detailed my bearish rationale for why I thought that housing was entering a dangerous phase and that real estate investors and speculators would get hammered. The bottom line is that when an asset (real estate, stocks, whatever) gets bid up to high levels artificially (a level way above its’ true market price), the next step will be a painful plunge. I go into greater detail in prior essays on the anatomy of a bubble. In late 2008, I initially wrote about what I thought was a “reverse bubble” in silver. In other words, artificial selling pushed the price of silver below its true market price. For a brief moment toward the end of 2008, the price of silver on the futures market was actually lower than a silver miner’s cost of mining it. The culprit was excessive shorting on the futures exchange by several large financial institutions. This excessive short selling in silver futures has been painstakingly documented for many years by one of the world’s leading silver analysts, Ted Butler. I consider Ted Butler, David Morgan and Jason Hommel to be the world’s best silver analysts and I highly recommend their research for anyone serious about silver. Whenever an asset’s price is artificially pushed down below its true market price, the resulting move boomerangs to the upside sooner or later (usually sooner). This is essentially a “reverse bubble”. What happened to silver? Silver hit a mind-boggling low of $8.88 (spot price) on November 24, 2008. It then went on a strong rally hitting $48.70 on April 28, 2011. It did touch $49.85 overseas during April 29th. That 29-month rally resulted in a gain of about 461% before a sharp correction in May 2011 took silver to the $30s. As I write this, silver is hovering around $31 and has been consolidating since mid-2011. Massive shorting by a handful of large institutions had again entered the picture. Has silver entered its second “reverse bubble”? Judging by the supply/demand data and market machinations (including excessive shorting in the silver futures market), I believe that the answer is a resounding “YES”. I won’t punish you with the latest data since others do a much better job of analyzing and presenting it (see the latest research from Ted Butler and David Morgan…again, look them up!). What will silver’s price look like a year from now…or 29 months from now? I am on record as forecasting that silver will hit $100 during 2012-2013. If silver were to mirror its percentage run from 2008-2011, then you are talking about silver’s price being in the general vicinity of $142. There are some that offer compelling views that silver could easily exceed $200 in the same general time frame. In the coming months, I will be reviewing and discussing silver’s fundamentals in venues such as preciousmetalsinvesting.com and in my free newsletter so I look forward to silver’s next rally. How much longer will a buying opportunity still be available? Given so many positive factors for silver, I think that triple-digit silver is not an “if’…it is a "when". Got silver? --------------------- Paul Mladjenovic is a CFP practitioner, speaker and author of “Precious Metals Investing for Dummies”. He edits the financial newsletter Prosperity Alert (available free at www.RavingCapitalist.com).

5 Things Every Investor Should Do Now - Part 2 of 5

The world is crazy and disruptions are here and more are coming. The series "5 things every investor should do now" is meant to help you get through this unsettling economic period with less pain and more safety than most investors. This is part 2 of this 5-part video series> In the coming issues of the Prosperity Alert, we will provide more alerts, information and resources to help you survive and thrive in these times. Subscribe by clicking here. Coming soon: Updated: Profit from the Commodities Super-Boom! To be alerted, get your free subscription to the Prosperity Alert. New subscribers will get a free ebook on Budgeting & Financial management tips and strategies. I wish you continued success... Regards, Paul Mladjenovic Editor, Prosperity Alert Newsletter

Lunacy and Confusion over the Gold Standard

It drives me crazy when I read stuff by “economists” that is just plain wrong. Some of them are allegedly “MBAs” and “PhDs” but I think that their common sense is actually “DOA”.

Unfortunately, millions in the public arena see their interviews and blogs and they seem to automatically swallow their commentaries… hook, line and sinker. Let’s address some of the nonsense that these pundits are expressing.

Some conventional and well-known economists have expressed the idea that a gold standard is a bad idea and that the gold standard was a major (and possibly THE major) catalyst for the Great Depression. One well-known fellow surmises that an equivalent of the gold standard is the reason why today’s European financial crisis is going on. In due course, I am sure that they will blame the gold standard for global warming and probably the heartbreak of psoriasis.

I have expressed myself on this topic in video venues such as at Preciousmetalsinvesting.com and at my Youtube channel (You can look up “PaulMlad”) but the topic deserves attention here.

The case can easily be made that most financial crises have occurred when governments didn’t use a gold standard (or any type of standard).
The point that critics make is that the gold standard “removes financial flexibility” when a system-wide financial crisis unfolds. They don’t like a gold standard because it is viewed as a “rigid constraint”.
In a monetary system that is on the gold standard, the amount of currency you can produce at will is indeed greatly constrained since the amount of currency (dollars or euros or whatever) is limited to the amount of gold that is on reserve. This condition puts the breaks on the unlimited creation of a currency.
The real problems behind today’s (and yesterday’s) financial crises and depressions have nothing to do with constraints such as a gold standard; the problems come from mismanagement of spending and debt… and governments that are too expansive in their size and scope.
Economists don’t blame governments for spending too much or creating too much debt or printing up too much of their currencies; they blame whatever may stop them from doing so (such as a gold standard). This is insane; it is like blaming the seat belt for a car crash.

Imagine for a moment if a financial planner took the same line of thinking with their client. How would that go?

“Well Mr. Smith I see that you are spending way beyond your means and you are taking on a lot of debt as a result. You are now hitting your credit limit! Well…the problem is obvious to me! Your spending and debt are not the problem…I blame the credit limit! The creditor is not letting you borrow your way out of your excessive spending and debt! Yup… I blame the credit limit.”

Could you imagine that? But that is essentially what these “educated” commentators are telling the public. The public confuses “eloquence” with common sense. They figure these guys “must know what they are talking about” since they “sound pretty smart”. Ugh…

We must remember that the gold standard was present when America had the depression of 1920-21 and we got through it and then proceeded into the roaring twenties. What’s that you say? You never heard of the depression of 1920-21? That is because the government did very little to intervene and the economy righted itself very quickly.

…But how about the Great Depression?

FDR effectively removed the constraints of the gold standard in 1933. However, the Great Depression continued… for over a decade! The Great Depression did not end until AFTER World War II ended (in 1945).

Look, we may not need a classical gold standard; but we need SOME type of standard. The essential point here is that our governments need some type of restraint… otherwise they will continue to spend and spend and create more and more debt. Standards and restraints on endless money and debt creation do not cause financial catastrophes and depressions.

But it is the lack of this constraint (gold standard or a modified version of one) that opens the door to catastrophe.

This is why I tell my students and readers to become as self-reliant as possible (financially and otherwise) since we are at risk as today’s economic ills get worse.

Unfortunately for pundits and economists, there is no “standard” to blame for the trillion-dollar disaster that is unfolding before our eyes today and in the months to come.

Be prepared…

Dow vs. Gold vs. Silver since 2008

By Paul Mladjenovic
March 19, 2012
Copyright 2012. Paul Mladjenovic. All rights reserved.

We can read all sorts of opinions about what you should do with your money and we hear the scuttlebutt from every pundit out there (including myself!) but at the end of the day, it is about what has done well and what hasn’t done well.

Even though I wrote the book Stock Investing for Dummies, I am not a blind cheerleader for stocks in general (although there are some good public companies and industries worth considering). Additionally, although
I wrote the book Precious Metals Investing for Dummies, I haven’t always thought of precious metals as the best place for your money either. I wasn’t bullish on precious metals during the 1980s and 1990s but many of you know that I started being bullish on precious metals (and commodities in general) circa 2001.

In other words, I wasn’t bullish on precious metals in recent years because I wrote a book on them….I wrote a book on precious metals BECAUSE I have been very bullish on gold, silver and other precious metals for nearly a decade.

In future articles I will certainly tell folks which segments of the stock market I favor. But let’s get to the point of this particular piece… how did the Dow Jones Industrial Average (DJIA) do against Gold and Silver?

The period I will cover will be from January 2008 until the end of last week (March 16, 2012). How did the 3 of them perform during the most turbulent market conditions in recent decades?

Here is the tale of the tape:

On January 2, 2008 (using the closing price for the first market day):

1) The Dow was at 13,043.96
2) Gold was at $846.75
3) Silver was at $14.93

How did they do? Here is where they were at as of closing on Friday, March 16, 2012 (along with the percentage gain or loss):

1) 1) Dow was at 13,232.62….up 1%.
2) Gold was at $1,658….up 96%.
3) Silver was at $32.27….up 116%.

Very Interesting! During a time period of over 4 years and 2+ months….the Dow actually ended up about 1 percent. Meanwhile, gold and silver roughly doubled during the same time frame.

What is even more interesting is that during that time, the federal government (and the “Fed”) cranked out highly accommodative fiscal & monetary policies (bank bailouts etc.) to help (directly or indirectly) the stock market during 2008-2009.

In addition, please keep in mind that the components in the “Dow of January 2008” are not the same in the “Dow of March 2012”. Some failing components were dropped (such as General Motors) from the January 2008 roster while more stable companies were added (such as Kraft Foods). How much worse off would the Dow have been if the exact same components were still in place?

Meanwhile, while gold and silver suffered from some antagonistic policies (such as excessive shorting in the futures market) and many financial commentators “talking them down”, they performed very well. How much different would the picture had been if some forms of intervention did not take place?

What does the next few years look like for the Dow, Gold and Silver? Stay tuned… more on this in a coming commentary. Meanwhile do check out the latest video commentaries at my youtube channel (look up “paulmlad”) for further investor points to ponder.

The bottom line is that investors learn from this not only the lessons of patience and discipline but also diversifying away from paper assets in the ongoing age of financial and economic crisis.

===================================

Learn more about how to invest in Gold, Silver and other commodities in the seminar "How to Profit from the Commodities Super-Boom) by clicking here.

or get the Free Financial Newsletter, Prosperity Alert at
www.RavingCapitalist.com.

5 Things Every Investor Should Do Now - Part 1 of 5

the world economy and financial markets are fraught with risk. Millions are still at risk as the governments of the world churn out trillion-dollar & trillion-euro debt. Economic instability, financial risk and potential crises & conflict are found in every corner of our world.

What is an investor to do? I think that if every investor implemented these 5 strategies, they will be a lot better off down the road.

Here is part 1 of this 5-part video series:





To find out more about how to invest in Gold & silver, check out Paul's seminar on Commodities Investing by clicking here:

or go to http://www.payloadz.com/go/sip?id=1312554

Paul Mladjenovic 2012 Forecast for Silver

Silver had a roller coaster ride in 2011...it had some eery similarity with its run during 2008. Given that, I think the setup is for a strong rally in Silver.

From 2003 to the end of 2011, silver went from under $5 to about $29 for a sosolid gain of 480%. Not too shabby!

In this video, I reveal my forecast for 2012 and discuss the prospects for sisilver:



For those interested in learning about investing & speculating strategies in silver, gold, energy and other commodities, consider the Commodities investing seminar. It is very affordable and you can download it instantly.

More details at RavingCapitalist.com

or you can CLICK HERE.