What You Haven't Been told About Gold Investing

Transcript

Ken Fisher:

Price of gold is up. A lot of concern about political uncertainty and all kinds of parts of the world. The price of gold up. That's when I'm most often asked about, "What do you think about the price of gold?" You're not going to like my answer. Nobody ever does. I think, I've long thought, I mean for decades I've thought, that predicting the price of gold is way beyond me. I've had good luck predicting a lot of things, and I've never had success predicting gold. And I gave it up a long, long time ago because I came to learn. It's so tricky to do. Let me make a couple of points about that. We've had gold around for a long time. Intuitively, you know that this is an old thing. It's used as money. A long, long, time ago. It has a paper currency to gold price where we have a long, long history in dollars. And when you look at that, to a rounding error, gold gets all of its return from about 20% of the units of time, and about 80% of the time it's making no money or losing money. Now, what that means is that the big up moves that gold generates come in spurts. Strong and sustained for a limited period and then over. If you can time something that gets most of its return from 20% of time, you don't need any advice from me about anything. Let me say that differently. You know intuitively that timing the stock market is not so easy, but the stock market's up two, two and a half times for every one time it's down. That's a lot more balanced than 80/20. I reiterate if you can time goal you need no advice from me. And since I know I can't, I don't have a view of the price of gold is good or not right now. That's not the answer anybody ever wants to hear. Because when people ask that question, they want me to have a strong conviction and tell them what's going to happen. But I don't know. There's a lot of things I know, and there's a lot of things I know, I don't know. And the difference is important to almost all of us or should be. And I know, I don't know how to predict gold. I've actually never known anyone who could do that on a consistent basis. Sometimes people get hot for a while, but you can find some people getting hot sometimes in Las Vegas, and that doesn't make Las Vegas bad. And it doesn't make gold bad. It just means that it's a really tricky thing to predict. And any commodity that gets most of its return from a small percentage of time, I'm not arrogant enough to. I mean, I'm pretty arrogant and I'm not arrogant enough to try to predict that. So I don't have better advice for you. I kind of wish I did. I kind of wish I knew how to do that. There's a lot of things I wish I knew how to do that I don't know how to do, but I don't know how to predict the price of gold. So I don't know if now is a good time for gold prices or not. And I believe that most people that are pretty pound the table on this kind of view, one way or the other usually end up being wrong.