A few years ago Warren Buffett was interviewed on CNBC. The interviewer asked him: “Where do you think gold will be trading five years from now?” His answer showed an ongoing dislike for gold as he replied: “I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (NYSE:KO) will be making money, and I think Wells Fargo (NYSE:WFC) will be making a lot of money and there will be a lot — and it's a lot — it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.”
Here are some charts (courtesy Stockcharts.com unless indicated), that Warren may be interested in seeing.
Featured is a chart that compares PHYS, the Sprott gold trust, to Warren Buffett's Berkshire-Hathaway (BRK-A). Since bottoming in August and trapping a number of bears, PHYS has taken the lead by breaking out above the 200DMA (blue arrow), and successfully testing the breakout (green arrow). The supporting indicators are positive (green lines), and the moving averages are beginning to turn up.
Featured is the Berkshire-Hathaway chart. Price broke down at the 200DMA in June (purple arrow). That was the first warning to bail out. In July price tried to rise back above the 200DMA and was rejected.That was the second warning. Price then broke down at the blue arrow along with the heaviest volume of the year. That was the third warning. The supporting indicators are negative, and the 50DMA is in negative alignment to the 200DMA, while both are declining. Warren's pet stock is toast – stick a fork in this one.
In 1932 at Englehurst NJ some sailors were holding onto a German blimp with long ropes. A gust of wind caused the blimp to rise suddenly and quickly. Some sailors let go after hanging on for a few seconds. Some dropped from a height of 6 feet, others from 10 feet.Three hung on for dear life. One was hauled onto the blimp – two fell to the ground from a great height and died. Knowing when to let go is very important. (Visit Youtube for a short film of this disaster).
