Pull the Trigger

Richard Russell snippet
Dow Theory Letters
Nov 17, 2003

Extracted from the Nov 15, 2003 issue of Richard's Remarks

Gold --There are a few times in an investor's life when the opportunity for huge profits lies ahead. Such periods in the stock market occurred in 1932, 1942, 1949, 1974 and 1980-82. People who loaded up with common stocks at those times and held those stocks made fortunes.

I believe another such a time is now. And I'm referring to the current young bull market in gold. Subscribers who have been with me during recent years were urged to buy gold stocks back in 1999. Those who did buy the suggested gold stocks and held those stocks now have substantial profits.

I believe that fortunes will be made in the years ahead by those who are now establishing major positions in gold and gold shares. I've said this a number times before, but I want to repeat it --

These primary moves last longer than anyone believes possible -- and they take the items higher than anyone thinks possible. We're now in a primary bull market in gold.

I believe gold (and very probably silver) will make fortunes for those who now take major positions in the precious metals.

I want to repeat something that a prominent Wall Street millionaire told me half a century ago -- tough words that I never forgot. "Russell, my boy" this gentleman offered, "Do you know why stock brokers never make big money in a bull market?"

I confessed that I didn't know."

He answered, "They don't make big money in a bull market, because they never believe their own bull shit."

In other words, the brokers tell their clients "what a great market this is," but they're just blabbing. If they really believed that it was a great market they'd be loading up on stocks themselves, which if course, they never do.

So this is my position -- I believe gold below and even somewhat above 400 dollars an ounce is dirt cheap. In view of the amount of Fed-generated fiat paper that will have to be churned out in coming years (it will be in the multi-trillions of dollars), gold is the cheapest thing around. The US government, states, cities, corporations and individuals are currently loaded with $32 trillion in debt. On top of that, the US government has additional unfunded liabilities of around $44 trillion, all of which will have to financed.

For these reasons, it's my thesis that gold at $400 an ounce is ridiculously cheap. As a comparison, gold today is less than half the price it was at its 1980 high.

I believe three or four or five years from now we'll look back at today's price of $400 dollar gold and ask ourselves, "Where the devil were we? What were we thinking about? Gold at $400 was cheaper than dirt. Why didn't we recognize this back in the year 2003?"

As I see it, this is one of those rare times in an investor's life when he can buy an undervalued asset at a bargain price. This is a time when you can buy real money with fiat paper. At this time you can buy real money, gold, with "junk" fiat paper which is created "out of thin air" by the Federal Reserve.

Big profits have already been made by those who bought gold and gold shares two or three years ago. But that is nothing compared with what I see ahead -- as the bull market in gold moves on. We are now in the accumulation phase of the gold bull market, This is the phase where seasoned, knowledgeable investors build their positions -- even while the public and most neophyte "investors" are either ignorant of what's happening or at a time when the public actually dislikes the very product which could make them a future fortune.

But the secret to all this is the necessity to ACT. Knowledge is wonderful, but in this business, knowledge isn't worth a damn unless you have the courage to "pull the trigger" -- to ACT.

I've listed gold stocks and gold and gold funds until I'm dizzy, until some subscribers have written to tell me that I should "get off gold," that they're tired of hearing about it. So, dear subscribers, it's now up to you. Bull markets are great, knowledge is great -- but there's no substitute for acting. Act, act, act.

More follows for subscribers . . .

Nov 15, 2003
Richard Russell
website: Dow Theory Letters
email: Dow Theory Letters
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