“Gold Is The Ultimate Insurance Policy”

Alan Newman of Cross Currents joins the commentary to discuss gold, the ultimate insurance policy. Three Manias In A Generation (2000, 2008, 2019) All End Badly. Current Price Earnings Ratio (30.02) Is Higher Than 1929. Gold Priced In Yen Near All Time High.

Gold Is The Ultimate Insurance Policy

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Alan Newman – “Gold Is The Ultimate Insurance Policy”

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Transcript

Welcome to the McAlvany weekly commentary. I'm Kevin Orrick along with David McAlvany. We have a returning guest Alan Newman. And you know as we think about the guests that we have on the program a lot of them are in their 70s some are in their 80s and there's a reason for that. Guys like Alan Newman, Richard Russell, Jim Deeds, Ellen Ableson, Ian Mcavity, these are guys who can bring 50 years of experience to the table. Why wouldn't we talk to them.

That's exactly right. You learn a lot in a short period of time within the financial markets and when you begin to aggregate that through decades it creates a certain perspective and a certain wisdom that only comes with age. So you may know quite a bit in your 20s and 30s and 40s but knowing what it all means and how it all fits together. I don't think that's plain and obvious until you're a little bit more mature when I think of people like your dad.

OK. He's pushing 79 this year he's going to turn 79. He's as young in his mind as I've ever known him. He continues the need to share his knowledge and his experience. Alan Newman's the same way you know he keeps trying to retire because the work that he does a lot of it is chart oriented. It's very very labor intensive. And every time he tries to retire people beg him not to do it. And he says if I'm continuing at all. It's just for the love of it.

That's right. With decades of experience in the market you begin to see some interesting parallels between men who've been there and done that and women who've made the same sorts of observations. And I think the correlations between perspectives can be very helpful at times. I remember Richard Russell this is back in the year 2000 2001 2002 as I was working at Morgan Stanley. I was reading Richard Russell every day.

And he had written that letter since the 50s long before you were born.

That's right. He became popular in the days of Alan Abel son and really got his start in the newsletter business through writing a column in Barron's and Russell took the Dow Theory concepts. And I remember being fascinated by it having neglected gold for a long period of time as I was studying philosophy and didn't really have an interest in what our family business had been. Here's a guy who's talking about the Dow and gold in the relationship and how he expected to see it go from what at the time was in the 40s down to a 5 to 1 or 3 to 1 or even a 1 to 1 relationship and that got my attention while I was at Morgan Stanley and actually was a part of the move back into the metals business with our family business and ultimately the asset management business where these things do stand in very significant long term relationships again whether it's Richard Russell or Ian Mcavity or Alan Newman there's an echo from one to the other in terms of the analysis and the insight but a lot of it is instinct that to some degree comes out of the trenches being in the markets every day for all those decades.

You know one characteristic that they share too is they have outlived the value of the dollar in their lifetimes the dollar has lost over 95 percent of its value in each one. I mean Richard Russell Mellon NEWMAN These are guys who say look stop measuring things in dollars. Start looking at how much an ounce of gold is worth in Dow shares or what we talk about how much platinum is worth in palladium and how much silver is worth in gold things that don't go away where you're measuring value for value not something that just disappears into thin air.

Alan it's great to have you on the program you've got cross currents which is your writing expression it's been there for 30 plus years and is cross currents is winding down. We hope to keep in touch with you and make sure that Florida is treating you well. Thanks for joining us on the commentary again.

Thank you David. It's always a pleasure.

You know some things in the market change through the passing of time and summer constant we can reflect on the shortness of investor or creditor memory or the quick return of greed to the marketplace. The psychology of the participants seems to be one of those constants. But what about when investors just start to take their marbles and go home no longer wanting to play the game. We've got this weird indicator that would say actually there's increased activity in the markets and yet we know that household investors are somewhat Ableson. So you've get total dollar trading in the market which is again on the increase not necessarily an indication of household investor interest. Talk to us about what these changing dynamics are.

Yeah well small investors have been pulling out ever since the Nasdaq crash back from the tech mania. So many people who got badly hurt. And then you have the same thing happening. From 2007 to 2009. So the public has its part.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver