Still bullish on GOLD

Save money for college tuition? Ben Bernanke said his son, who is in medical school in New York, is likely to rack up $400,000 of student loan debt in the process of getting his degree. In the same meeting, Ron Paul also shot a silver bullet to the vampire. Ben said you can have silver but it's just not US currency.
The chart below explains how to save for college tuition. Ben should know that before sending his son to school.

We are not in Gold or precious metal standard. That's true. Ben keeps on lying about inflation (per Ron Paul). That one needs your own judgement. The chart says save tuition in Gold anyway.

Here is some more reading on Supply Demand and others from Morgan Stanley via Zero Hedge.

Stay Long Gold

I have to admit I am a fan of CNBC's Maria Bartiromo. When I was watching her, I found this. It is a must for all serious and prudent investor. Jim Grant is the editor of Grant's Interest Rate Observer.

Jim says the FED is manipulating the market to achieve desirable macro outcome. The FED is dulling the market sensors of risk in the entire marketplace, by pressing the interest rate. The FED should learn the lesson from 1920-21 depression. (and don't forget 1929 and 1930s right after.) Then comes the classic conversation:

Maria Bartiromo: "What are the alternatives?"
Jim Grant: "Capitalism is an alternative for what we have now. I highly recommend it."
Maria: "We all do."
Grant: "No we don't."
Maria: "The Federal Reserve may not."
Grant: "We ought to be discussing an intelligent move to a sound currency by which i mean a currency that is based on a standard and not at the whim and the discretion of a bunch of mandarins sitting around Washington D.C."

Marc Faber on CNBC

Monday 3/5, Marc was on CNBC discussing how an investor should allocate his or her portfolio in the face of a stock market correction he thinks is coming in the short term. After today's crazy market drop, we now have a better understanding.



He also said, "I think investors misunderstand what is risk , I think it is highly risky to have all your money in cash, if I did not have anything today , I will invest right away little bit in equities little bit into properties and little bit into gold and accumulate every month."
He perfectly explained it. In this market, we need to own something. There is risk owning 100% cash or T-products. Refer to LMP series for my approach.

Low Maintenance Portfolio - Mar 2012

There are lots of things happening on me recently. I am couple days late this month. No big change in view. No big deal, I think.

For the new month, I have everything on buy side.

The 5 IVY portfolio components are 

• SP 500 (Risk ON) (override)
• MSCI EAFE (The Most Famous International Index) (Risk ON)
• U.S. 10-Year Government Bonds (Risk ON) / USD (Risk ON)
• NAREIT (U.S. Real Estate Index) (Risk ON)
• SP GSCI (Goldman Sachs Commodity Index) (Risk ON)/ GLD (Risk ON)

In summary, my holdings are (at initial weight when first invested):
20% Emerging Market (DEM)
20% Gold (GLD)
20% Real Estate (VNQ)
20% Bond (LTPZ)
20% USD (UUP)

In the first 2 months, my return is 3.5% as of 3/1/2012. The benchmark data are below:

	12/30/2011	3/1/2012
TLT / (Bond)	121.25	116.22	-4%
SPY / (Equity)	125.5	136.75	9%
	Percentage
BOND	100.00%	60.00%	40.00%	0.00%
EQUITY	0.00%	40.00%	60.00%	100.00%
	100.00%	100.00%	100.00%	100.00%
	Return
BOND	-4.15%	-2.49%	-1.66%	0.00%
EQUITY	0.00%	3.59%	5.38%	8.96%
	-4.15%	1.10%	3.72%	8.96%

Forward looking:
Everything on buy signal is a bad sign. In a normal market, US Dollar and US Treasury products have negative correlation with US Equities. We are not seeing that. Dow is at a psychological point of 13,000. Keep on trying and keep on being rejected. We will see a resolution soon. As I mentioned couple times, this is not a market that I can comfortably holding longs. I will stay away from US equity until I feel comfortable. 
There is some problem with Gold last week. FED said no further QE on 2/29. We saw a huge intraday drop of 90 bucks (over 5%)! After the drop, now GLD is getting closer to the MA, but still with good cushion. I am still bullish on Gold, but I will follow system. If the support at GLD 162 breaks, I will exit and move to DBC which also turned bullish.