GSI Banner
  • Free Access
  • Contributors
  • Membership Levels
  • Video
  • Origins
  • Sponsors
  • My Account
  • Sign In
  • Join Now

  • Free Access
  • Contributors
  • Membership Levels
  • Video
  • Origins
  • Sponsors
  • Contact

© 2025 Grey Swan Investment Fraternity

  • Cookie Policy
  • Privacy Policy
  • Terms & Conditions
  • Do Not Sell or Share My Personal Information
  • Whitelist Us
Beneath the Surface

Golden Flack Jacket

Loading ...Bill Bonner

October 10, 2024 • 4 minute, 33 second read


Golden Flack Jacket

Golden Flack Jacket

Bill Bonner, Bonner Private Research

We drove up to Lake Champlain yesterday for a wedding. The leaves have begun to change, but it is still early in the season; they’ll be in their full glory in a month or so.

In the last two election years, we noticed that when we got beyond the commuting range of major East Coast cities, we began to see Trump signs everywhere. This year, we saw almost none. In one Upstate New York town, a place we assumed was Trump country; we saw only a giant Harris/Walz billboard. Are people losing interest? Is this a meaningful ‘straw in the wind’?

Don’t know. So, let’s get back to business.

CBS asks:

Does gold investing make sense with the price high? Here’s what experts say.

In recent years, gold has caught investors’ eyes, especially since the start of 2024. The price of gold has been on a steady climb and even hit a new all-time high of $2,672 per ounce in September. This surge has pulled in even more investors, fueling further price increases. But now, with gold prices at record levels, many are asking: Is it still wise to buy gold? Or should investors wait for a pullback?

The investment pros had the usual answers. Given the risks of war and inflation, most see gold as a ‘haven.’ Many expect that it is an ‘investment’ that will pay off.

But gold is not an investment. Warren Buffet is right; it will never give an investment return. It has no factories or sales outlets. It doesn’t make payroll or a profit. It hasn’t been souped up with AI. It doesn’t do anything—it just sits there.

It doesn’t grow more prominent. But it doesn’t shrink, either. Its purpose is merely to avoid an investment loss… notably the Big Loss that would knock you out of the game.

In the long run, you make money by owning a piece of a profit-making business. The profit represents an actual increase in real wealth. A quintessential example of that was Philip Morris, which kept making smokes, making profits, and distributing money to shareholders. If you had invested $1,000 in Phillip Morris a hundred years ago, you’d have $250 million today.

However, Phillip Morris is not immune to the diseases, mood swings, and bad hair days of Wall Street. When the market got sick, the cigarette companies coughed, too. Stock prices can wheeze and sneeze for an entire generation before returning to their prior rude good health.

While we can never know when we might catch a cold, we can at least shut the window from time to time. That is the insight behind our Dow/Gold macro trading model. It aims to keep you in the stock market so long as there is a decent hope of returns… and to keep you out when the risk of a Big Loss increases.

The two thresholds — the places where we suggest moving in or out — are five and fifteen. When you can buy the Dow for less than five ounces of gold, the risk of a Big Loss is low; it’s time to buy stocks. When you have to pay more than fifteen ounces, on the other hand, it’s time to move out of stocks.

Where are we now?

The ratio is around 16. We’re out.

That is not, however, the whole story. Markets move in broad swings from bull to bear, from rising prices to falling prices and back over long periods. This is what we call the Primary Trend. Grosso modo, stocks are either going up or going down. If they’ve been trending down, we assume that they’ll keep going down until they reach a bottom.

If they’ve been going up, we assume the trend will continue until they reach a top. We don’t know where those bottoms and tops will eventually be found or what exactly will happen in the meantime. But tops and bottoms show up sooner or later, and they are reliably (by definition!) beyond our 5-15 fence lines.

Currently, stocks have been going down (in terms of gold) since 2000. This is at odds with what everyone believes. Although stocks have gone up a lot in nominal dollar terms, gold has gone up even more. From forty ounces of gold to buy the Dow stocks, it now takes only sixteen.

The logical place to be when you are out of stocks is in gold itself.   But gold has its moods, too. Right now, it is relatively expensive. It wouldn’t be surprising to see the price go down – shaking recent passengers off the bus – before it resumes its drive to its ultimate destination, under 5 ounces to the Dow.

Of course, gold is not the only ‘safe haven.’  You could be in cash. Or real estate. Art. Or… even a few carefully selected stocks.

The Dow/Gold model speaks for the stock market generally… for the averages… for the great mass of the stock market, not for specific companies. There are always some that resist the Primary Trend. And other companies pay such nice dividends that you don’t care if the stock price goes down.

New products, technologies, and opportunities also emerge even when the Primary Trend is down.

The Dow/Gold macro model is not a straitjacket. It’s a flak jacket. It helps protect you from the Big Loss.


A Squeeze For the Ages

October 16, 2025 • Addison Wiggin

Sophisticated investors “short” stocks because they make money when the price of the stock falls. Stocks with poor fundamentals and high valuations make good “short” targets. There are a lot of those in the market right now.

The squeeze: If you’ve shorted a stock but the price rises, instead of falling, you have to buy the stock at the higher price to close the position. It’s called a “short squeeze.” Investors in a short squeeze lose money even while the stock price rises.

If the squeeze is on across the market, companies with poor fundamentals can post huge price gains, driven by short-sellers closing out their positions.

A Squeeze For the Ages
Peter Schiff: Measure Assets in Gold, Not Dollars

October 15, 2025 • Addison Wiggin

Despite being the subject of status quo ridicule, gold is still the king of financial assets. Wall Street’s reflexive scorn of gold is due to the fact that gold exposes Keynesians as frauds and sometimes thieves, and threatens the premise of the existence of an entire category of academics and professionals, from Ivy League academics to mom-and-pop retail investment advisors.

If a 5,000-year old rock performs just as well as a traditional 60/40 stock-bond portfolio, a lot of people are wasting their time and money.

When you measure much of the financial world in gold, many of the supposed winners lose their luster. All you needed was an honest yardstick.

Peter Schiff: Measure Assets in Gold, Not Dollars
Another Voice Joins the Dotcom Chorus

October 15, 2025 • Andrew Packer

This year’s Liberation Day selloff, which really started with the launch of Chinese AI Deepseek, is similar to the market meltdown amid the LTCM collapse.

However, the AI bubble is moving a bit faster, as Timmer’s data shows a gap in valuation that doesn’t match the price action of the 1990s. 

If things play out similarly from here, 2026 could mark a multi-year peak for markets as a slowdown in AI spending starts to appear and stocks sell off. 

Another Voice Joins the Dotcom Chorus
Earnings Trump the Trade War Tango

October 15, 2025 • Andrew Packer

Amid the latest tariff tantrum, it’s also earnings season again. The big banks have fared well, with sizeable earnings beats so far.

The king of the Wall Street TBTF banks, JPMorgan Chase, led the way.

Quarterly profits topped $14.4 billion, up 12 percent from the third quarter of 2024. Revenues hit $46.4 billion, up 9%.

The bank did disclose a $170 million loss, following the bankruptcy of Tricolor. The company is a lender in the subprime automotive space.

Compared to JPMorgan’s size, this is but a trifling rounding error, and by no means should investors see it as a sign that marginal borrowers are facing trouble.

Meanwhile, JPMorgan executives reiterated that consumers remain generally “resilient” and mostly on time with credit card payments.

Earnings Trump the Trade War Tango