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Your independent Swiss
asset manager
THE
TIMELESS PRECIOUS METAL FUND
THE
TIMELESS ENERGY FUND
THE SIERRA MADRE GOLD & SILVER
VENTURE CAPITAL FUND
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Gold/Ounces
in US$
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Buy Date
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Amount
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Buy Price
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Total (USD)
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Price Today
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Value Today
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November 7, 2002
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100/oz.
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318.90
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Total
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100/oz.
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318.90
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31‘890
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1670
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170’000
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Profit
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138’110
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Profit (in
%)
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433.1%
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OUR
LONG-TERM RECOMMENDATION
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BUY
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OUR
SHORT-TERM RECOMMENDATION
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BUY
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1980
to 2012: From bear to bull
 
In 1980,
the price of one ounce of GOLD reached $850. Today, the purchasing power of
the US dollar is substantially less than in 1980. The price of one ounce of
gold would have to rise to $ 2,550, assuming an annual average inflation of
3.5%, to reflect the value of the US dollar thirty years ago.
The
long-term picture of the bull market since 2001
The bull market of the
gold price started towards the beginning of 2002. On the way from $255.3 to
the recent intraday all-time high of $ 1,921 (an increase of 760%), several
significant corrections took place, the most severe one in 2008 when the gold
price sank by 30% only to jump 165% to a new all-time high.
The bull market is not
over! The gold price is well-established in its long-term up-trend and is
no-longer overextended as it was in 2006, 2008 and 2011. The present momentum
will likely lead the gold price higher in the short-term (two to three months).
As the PMO Indicator
shown above clearly demonstrates is that extremes always will be corrected.
In fact, we had great sell opportunities in 2006, 2008 and 2011. On the
reverse side, 2001, 2009 were unique buying opportunities.
At present, we again have
such a buying opportunity! This is not the time to stay on the side-lines.
You have to buy now!
The medium-term picture
of the gold price
Critics of technical
analysis include well known fundamental analysts. For example, Peter Lynch once commented, "Charts
are great for predicting the past." Warren Buffett has said, "I realized
technical analysis didn't work when I turned the charts upside down and didn't
get a different answer" and "If past history was all there was to
the game, the richest people would be librarians."
However, Warren Buffett also
said: “Most people get interested in stocks when everyone else
is. The time to get interested is when no one else is. You can't buy what is
popular and do well.”
This is what above
indicated tells you: No-one is interested! Therefore: BUY!
Should you own gold
rather than gold shares?
Gold and gold shares do
not always move in a parallel fashion. At times, gold is leading, at times
the gold shares. From 2000 to 2006, the Gold&Silver
Equity Index ratio fell by 40%, telling us that gold and silver shares
outperformed the price of gold. Since 2006, the metal prices performed
better. At present, the mining shares offer again a unique buying opportunity.
Conclusion
The correction in the
gold price has run its course. The secular gold bull market is likely to
continue reaching new all-time highs in the next months.
Shares of gold producers
and explorers are as undervalued in relation to gold as in 2008 and are cheap
based on their long-term average, therefore offering a unique investment
opportunity.
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