Do not fight the market. Part 2.

Most people who talk or write about investments emphasize the good trades they made. So, maybe I might be of use about talking about my failures. Bank stocks? Ouch. General Motors? Ouch. Toyota and Honda were moderate losses. But, it was my investments in the gold and silver minoers that were to save my hide.

You see, I listened to a presentation by Weiss Research. They predicted a big drop in the DOW, so I sold all stocks. They told me that gold and silver miners were going way up so I bought in. It worked for a while. The DOW fell and QE1 and QE2 seemed to stop the fall way earlier than Larry's formulas predicted. The rec to avoid stocks continued and I stayed out. The miners did well and I made back most of the losses. Then I lucked out. A friend came to live here and we bought a house and rented it out. And we bought a new car and decided to give one of our kids a loan to pay off credit cards, anticipating that inflation would make the loan lose its value. So, we had to sell some miners pretty much at the top.Just sheer luck.

Then gold began to go down. It eventually fell 20%, but the miners fell 50%. We were urged to "hold our positions." I did. True, I did not buy the "Insurance" (shorts) and the miners went way down. I should have sold all the gold, silver and uranium miners and not fight the market.

The moral? Gurus are not as infallible as they pretend. And all gurus pretend that other gurus are dumb. And they also pretend that central bankers and such do not know what they are doing. But, every one goes wrong sooner and later. That's when the mlosses occur. Fortunately, the correction in gold will be over soon and the miners have already started to rise.