http://cbs.marketwatch.com/archive/19990928/news/current/long_view.htx?source=htx/http2_mw

Gold bugs are a different breed Emily Church CBS MarketWatch

NEW YORK (CBS.MW) -- Yes, the yellow metal is seductive, even for long-term investors with an eye on hedging a small share of their money against inflation and other evils that gnaw at the value of stocks. Gold bugs -- who staunchly stand by gold as an investment in good times and bad -- have a pretty healthy skepticism when it comes to the markets and paper money. See Thom Calandra's StockWatch. It's no surprise that some of the biggest individual gold buyers come from countries where there's a threat of their savings disappearing overnight by decree.

Gold mining stocks can even be seen as a conservative investment in some lights. But don't be deceived, say money managers like Tony Weber of Veredus Small Cap in Louisville, Ky.

Gold is not as a substitute for cash or even Treasurys in a long-term portfolio, and that's been the case since the major currencies left gold largely behind. Oil, to compare with another expensive commodity, is different because its wide industrial use guarantees a good level of demand.

Gold is "a non-income producing asset," Weber said, meaning there's no dividends here. "There are no earnings to speak of, and we don't look at names with those characteristics.

"This move has a cap on it. It's a short squeeze, that's all it is -- a bear rally in gold," he added. Gold futures surged 13 percent, passing the $300-an-ounce level for the first time in six months, after European central banks agreed to restrict gold sales for five years. See Futures Movers.

Try to remember

Gold stock price jumps are a rare event, but boy are they noteworthy. The 36-percent move in gold stocks through Monday is the biggest two-week gain for the S&P gold mining stocks since September last year, when the stocks jumped 42 percent in over a two-week period, according to MarketHistory.com. Before then, gold last saw a two-week climb over 35 percent in September in 1982.

If you're still not convinced of the unpredictable, and therefore risky, nature of gold stocks as a place to store value, take a look at these 10-year returns, year-to-date through Friday from

MarketHistory:

S&P Gold Mining Group: Down 29.4 percent

S&P 500 stocks: Up 268.8 percent.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999

Answers

Who gives a rat ass about past 10 year charts.. Western civilization is going to crumble...Those Indians, Pakastanis, Russians, Chinese, could care less about charts etc,, they want your f---ken GOLD.

-- Fred (FRED@AOL.com), September 28, 1999.

"I got out of the market back in April" - Ken Decker

So Ken, you expect us to believe that your T-bills are safer than precious metal? Your progression is almost complete. In a few more months you'll be decrying just how volatile those Treasuries were as you scramble to convert something, anything, to gold.

-- a (a@a.a), September 28, 1999.

Try and buy a loaf of bread with a Krugerand if the shit hits the fan. You'll get laughed out of town. Cash will rule, not gold.

Just my opinion. Don't you all have a cow.

-- (DowGuy@wallstreet.com), September 28, 1999.

DowGuy: I would be more than willing to sell you a loaf of fresh homemade wheat bread for a Krugerand when TSHTF. No problem. Gold will ALWAYS be worth more than paper.

-- a (a@a.a), September 28, 1999.

How pathetic and transparent.

-- Gia (laureltree7@hotmail.com), September 28, 1999.

I'll sell ya a loaf of gold~!

-- Downstreamer (downstream@bigfoot.com), September 28, 1999.

Weber says "gold is a non-income-producing asset". Maybe, but has that guy taken a look at the "income" that you get now (in the form of dividends) from the S&P500 stocks, or the DJIA. IT IS IN THE AREA OF 1.3%!! So, he's willing to risk holding a stock basket that is priced in the stratosphere, EVEN RELATIVE TO 1929 LEVELS, and pay tax on those measly dividends, and still say with a smug "I know I'm right" smile that in the long run , he'll be ahead? In the long run we are all dead, and so soon will be this once-in-a-millennia mania. APOCALYPSE SOON?

-- profit_of_doom (doom@helltopay.ca), September 28, 1999.

I'd rather have several Quarters in my pocket, than a gold coin. Show someone a gold coin and don't you think they'll wonder how many more you have at home. Untill the dust settles really well, I'll be content to try to buy what I need with some pocket change and a story of woe. Also easier to make change. Got some old cloths?

-- thinkIcan (thinkIcan@make.it), September 28, 1999.

Ken,

In a previous thread you commented:

"Hard hitting? Milne is angry Y2Knewswire... all spin, all of the time."

Using your own means of assessment-- Decker is happy face CBS Marketwatch... all spin, all of the time. No?

-- (cujo@baddog.byte), September 28, 1999.

I see some folks have made my earlier point... what exactly do you do with gold? If you think we are about to suffer immense food shortages, do you really want to sell your food for gold? The real "coin" of the realm has always been knowledge. A fool and his money (or gold) are soon parted. In the end, gold has no mystical value... it's just a rather pretty metal with some modest industrial uses. The Spanish mercantilists learned this lesson the hard way... how not to confuse gold with wealth.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

In the context of Y2K (remember Y2K, anyone?), lets assume that things go kerplunk in January. Like no working banking system, for instance, and we have a big collapse. INITIALLY, cash will surely be king; all promises-to-pay (including T-bills) will be empty promises.

By 2001, even cash will perhaps not be so desirable, as people are more focused on strict BARTERING for goods and services. Now, when you are in bartering environment, everything is NEGOTIABLE. And that includes being able to say things like, "Well, tell you what, if you will help me put up that fence across my property, I'll help you fix your tractor. No? OK, well suppose I throw in one of these here ONE-TENTH OUNCE GOLD COINS! Look at how it glitters all pretty like, and you know AT ONE TIME our paper money -- which we now use to wipe our butts with, ever since we ran out of T-bills -- used to actually REPRESENT the stuff! OK? Do we have a deal?? Great! But you know, while we are on the subject, I have this real pretty silver dollar, and I was wondering if your daughter would be interested in helping me with some light fence work over by the MUDDY side of the pasture...."

-- King of Spain (madrid@aol.cum), September 28, 1999.

Gia,

Why did you call yourself pathetic and transparent?

-- (DowGuy@wallstreet.com), September 28, 1999.

DowGuy: I'm sure she meant YOU.

-- King of Spain (madrid@aol.cum), September 28, 1999.

Thank you KoS. Flunkie day traders make bad mud-wrestling companions. They keep trying to reach the submit button...

-- Gia (laureltree7@hotmail.com), September 29, 1999.

To find out what is really going on in the gold market visit: http://www.usagold.com/cpmforum/

-- (1929@lloveragain.com), September 29, 1999.

"The fate of the world economy is now totally dependent on the growth of the U.S. economy, which is dependent on the stock market, whose growth is dependent on about 50 stocks, half of which have never reported any earnings..." Former Fed Chairman Paul Volcker, Friday, May 21, 1999

-- (Internets@reriskytoo.com), September 29, 1999.

Gold historically has always been the currency most recognized when currencies lost their value. Though it may not be the investment it once was, that's not the point. When the dollar tanks, gold will still be a viable currency. The comment about Krugerands is closes but misses the mark. Yes it might not be as viable as the American Eagle, but it is gold. Better to invest in small denominations of gold coins (not numismatic coins - no one will be able to apraise their value and you can't go to the store with a rare coin and expect a fair trade for goods when no one knows what it is). If you had to, you could cut Gold Eagles into pieces, weigh them with a scale and trade the fractions. Cash will be good only as long as the dollar is viable. Junk silver coins, the ones that actually have silver in them would be a good alternative. Investing in barterable items would be a good choice as well. But that takes a real commitmentment to believing that everything is comming down. Anyone who stays in the stock market likes to play Russian Rulette like Robert DeNiro and Christopher Walken in "The Deer Hunter".

-- Keith Nealy (keithn@aloha.net), September 29, 1999.

K.O.S.

I love the way you worked that farmer's daughter thing into your story. Are you, by any chance, a travelling salesman?

-- Gordon (gpconnolly@aol.com), September 29, 1999.

Gia,

I thought that was real sweet how KOS came to your rescue. Flunkie Day Trader...what's that?

-- (DowGuy@wallstreet.com), September 29, 1999.

Ken continues to prove what a know-nothing buffoon he is.

FWIW I've made money hand over fist with Prudent Bear as the markets slowly sink...

I've made money hand over fist on goldmine shares...

Profits have and are being taken - this is a game of musical chairs and the loser is the last one owning lots and lots of dollars...

And I've accumulated 300 ounces of yellow metal at firesale prices... by that I mean about $270 on average... again making money hand over fist... that's the best I can do at the moment...

While ddecker has been snickering and pontificating in his know- nothing way over the last year, I and my fellow INFORMED goldbugs and contrarian investors have been positioning ourselves for this denouement...

We are now collecting BIG TIME on the fiat funny money side...

BUT we have also provisoned ourselves with the real thing too...

Not only that we are ready and waiting NOW to move in the appropriate direction as all hell breaks loose as we approach y2k...

When the dollar collapses gold will become once again the de facto backing for the new world reserve currency, which will be the gold and oil-backed EURO,

And when the dust settles gold will be revalued at anywhere between $5-30,000 dollars an ounce - take your pick...

Decker you are so CLUELESS it's not even funny.

-- Andy (2000EOD@prodigy.net), September 30, 1999.

OOOOOOOOOORRRRRRRRRRROOOOOOOO...Andy...$30,000 for gold???!!!!!!

It went under 300 today. Don't give up your day job..

-- AndyLuver (I love@Andy's.com stories), September 30, 1999.