THE VALUE
VIEW GOLD REPORT
Investment
Policy Thoughts
Ned W. Schmidt, CFA, CEBS
Oct 14, 2004
Indicators
are designed in many ways to achieve different goals. Some are
constructed in ways to give short-term traders timely entry into
and exit from markets. Other measures are designed to suggest
the overall attractiveness of a market. The Long-Term Momentum
Model is designed for two purposes. First, it does not give many
signals as it tries to identify trends of longer duration. As
shown in the chart, last positive signal was in 2001. Second,
this measure lags and serves kind of like a slap in the face.
The measure says, "Wake up, the trend has changed. Have
you?" Every signal this indicator gives is not perfect timing.
However, in use across markets it has a far superior record to
that of the guesses of most humans.
A few months
ago the Long-Term Momentum Model turned negative. At that time
the interpretation was that the consolidation in which Gold had
been would continue. Since US$ Gold continued to be undervalued
that seemed all the change in view that was necessary. That measure has now
turned positive, and the monthly average is moving to a new high.
This set of conditions is viewed as extremely favorable. US$
Gold appears poised to begin the next leg of the Gold Super Cycle.
Momentum
(MOM) is one dimension of our Investment Policy Matrix, and can
be found across the top. The other dimension is relative value,
and that is shown in the left-hand column. Our goal is to find
a market that is under valued and the long-term momentum is positive.
US$ Gold seems to be in that position. Investors should become
buyers of Gold on price weakness. Please, do not buy at the high
for a day. That does not help. Tactical trading techniques can
help you identify prices at which to buy.
Silver investors be advised that the Long-Term Momentum Model
on Silver is also improving. A positive reading is expected soon
on that measure. Owners of Silver should become much happier
as time passes.
Your Eternal Optimist,
Ned W. Schmidt, CFA,CEBS
nwschmidt@earthlink.net
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after the receipt of your first issue.
 Ned Schmidt's monumental
report, "$1,265 GOLD," with 255 pages and 98
graphs, is now widely known, and is available at Amazon or from the author. This work has now
been read by investors in over twelve countries.
Ned welcomes your comments and questions. His mission in life
is to rescue investors from the abyss of financial assets and
the coming collapse of the U.S. dollar. He can be contacted at
nwschmidt@earthlink.net.
Copyright ©2004 Ned W.
Schmidt. All Rights Reserved.
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321gold Inc
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