Friday, November 12, 2010

Richard Russell: The Most Profitable Gold Rally is Yet to Come

Richard Russell is not only the preeminent expert on Dow Theory, he is one of the most prolific newsletter writers (Dow Theory Letters) and thanks to his epic longevity, will hopefully go one to break records for many years to come. The “Oracle of the Dow” is not omniscient, unfortunately. Otherwise, we mere mortals would simply follow his sage advice to riches.
He was definitely in fine form in the summer of 2000 when he prophesied that “we’re in the first phase of a bear market that could be long, tedious, grinding and very painful. Before it’s over, I believe we’ll see big pools of money moving out of stocks and into cash.”
But since then Russell has had an especially tough time with deciphering the stock market. Especially so these past few years. He was bearish for some time but then in May 2007 Russell switched to the bullish camp and pronounced that “an unprecedented world boom lies ahead.”
It would seem that Russell has basically given up on trying to time the market’s gyrations, writing recently that “the stock market is too unsettled, too questionable, for me or my subscribers to assume an all-out bullish or bearish position.”
But he continues to be an unabashed gold bull. This is the one market he has been pounding the table about for quite a long time and he has been absolutely correct. To my chagrin, it took me far far too long to realize that gold is indeed in a secular gold bull market. And of course, the next thought after that is the dread that it will be soon over.
Russell puts those thoughts to rest writing recently:
“I’m going on the thesis that the highly speculative phase of the gold bull market lies ahead. Now I’m depending on my experience with other bull markets:

  1. Most great bull markets go higher and further than almost anybody thinks possible.
  2. Most bull markets progress in three psychological phases.
  3. I believe the first phase of the gold bull market has passed. It’s over. This is the phase where students of great values take their initial positions.
  4. I believe we are deep into the second phase of the gold bull market. This is the phase where the institutions and funds join in the bull market show.
  5. Often, more money is made in the third or speculative phase of a bull market than is made in the first and second phases combined. This can mean that the late-comers to bull markets often make a fortune, more than those who had the courage to buy early in the game, but they have to have fortitude to sit in the highly volatile second/third phases.


  1. Profit, profit... is that all people DREAM about? Material profit. Profit like this is a dream to find THE immortal happiness which the ego is duped into believing it can attain in this temporary physical body as it aspires to figure out a way to have constant, never ending physical pleasures.

    Even fear and hate will make one wish for material profit so that they can be better than everyone else as far as society judges and they will have less people to compete with and therefore fear.

    I'm sorry, I don't believe there will be much of anyone left after the SHTF to work for those few left who stored gold. 77 dollar coffee we're talking, now what kind of idiot will sit in a grocery store waiting for customers to get paid 10 bucks an hour? What in hell will they be able to purchase? Stores will be completely empty. Cops will be gone; no riot squads will be there to stop a hundred violent people.

    The real profit will be in one's mental preparation, their cool headedness around others to be able to be a shelter, and the ability to go 'without' material pleasures. The warmth of the companions you'll have in your community and the connection you can make with the Creator will be the currency.

    Children will look at what adults do. If we have any hope in salvation it will be to teach them RIGHT and not the way we have made these past two horrid generations. If there's a bee buzzing nearby, the child will panic if the adult teaches them to panic. If the adult can stay calm and say, "it's just a bee.", the child will behave accordingly.

    Think about it. Gold is, in the traditional sense, real value. This time will be far different however, regardless of what any intellectually dim rationalist will tell you. If you all want to breed the awful mentality that caused this mess into our children now, and have this sinister predicament recur in another 30 years or so then get your kids to watch you collect gold all day and talk about how much value you'll make when everyone else is dead.

  2. greed in many of the rich and poor and all inbetween alike I agree. Gold is a tool for use, nothing more. Better value in your good name and help others and yes when they see your need they do help you, other times things seem to-fall into your lap-strange but true. But it's the "me" mindset now and profits profits. This works for the middle incomers aswell as the rich and poor, many amassing for selves. Spanning all classes and cultures say's it's not class/culture/education, it's a spiritual problem. "talk about how much value you'll make when everbody else is dead" good one. Talk of how much we'll make when our souls are already dead. Watched an interveiw with charles mansion once..evil dude but spoke some truth, said-you're the walking dead, and you don't even know it. If consumed or overcome in a mindset of gains and self. Nothing wrong with gains or attempting to protect yourself and others, just where we place our hopes, what place it occupies in our hearts.


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