DailyWealth:
Gold at $700... What Should We Do?

Dr. Steve Sjuggerud
May 17, 2006

Well, gold hit $700 this month.

That sure didn't take long. Just six months ago, it was bumping up against its recent highs around $450 an ounce.

After such a quick rise, what do we do now?

Gold stock analyst John Doody told me today that "we've come too far too fast," and both "the market and the stocks need a breather." I'm not so sure.

You really don't want to argue with John and his track record. But the investment game is rarely that logical.

My strong suspicion is that Mom and Pop America haven't bought gold yet. And those that do own gold are a bit embarrassed to mention it to "normal" investors.

I say: "Who cares?"

I still think gold has plenty of upside. But maybe John Doody is right. So how should we play it?

Personally, I own a significant amount of rare gold coins. It's my favorite place to be. And I don't have any plans to sell.

You can make money both as the price of gold goes up, and as the collector's "premium" goes up. Right now, graded rare gold coins are STILL trading at their lowest premiums to their melt value in recorded history. They're a screaming buy. Come to California next month with me, and learn all about them.

Whether gold gives back a bit from here or not, I'm still a long-term bull. Gold's up, but nobody's really bought yet so I'm not selling.

Why won't I sell? Because it's a bull market.

I've been buying gold for years now... I showed readers of my newsletter, True Wealth, how to buy gold for $250 an ounce about three years ago, and I've been recommending rare gold coins without hesitation for years.

But with gold at $700 now, is it time to get out? Should we move to the sidelines for a little while? What if gold corrects?

The best answer I can give at times like this is: "It's a bull market!" This answer may seem like not enough information at first. Let's hear it from "Old Turkey."

"The customers used to go into Old Turkey and tell him what some friend of a friend had advised them to do in a certain stock. But whether the tip they had was to buy or sell, the old chap's answer was always the same.

The customer would finish the tale of his perplexity and then ask: "What do you think I ought to do?"

Old Turkey would cock his head to one side, contemplate his fellow customer with a fatherly smile, and finally he would say very impressively, "You know, it's a bull market!"

Time and again I heard him say, "Well, this is a bull market, you know!" as though he were giving to you a priceless talisman wrapped up in a million-dollar accident-insurance policy. And of course I did not get his meaning.

I think it was a long step forward in my trading education when I realized at last that when Old Turkey kept on telling the other customers, "Well you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements - that is... in sizing up the entire market and its trend.

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It was never my thinking that made the big money for me. It always was my sitting.

Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions, but the intelligent patience to sit tight."

(quoted from the 1923 book Reminiscences of a Stock Operator, written from the perspective of legendary trader Jesse Livermore)

Folks, we're taking Old Turkey's advice today. It's a bull market in gold. That's all you need to know. There are plenty of excuses not to be in this bull market. But none of them can overcome the fact that it's a bull market.

To make the most money, you can't chicken out early. You can't accept 10% or 15% profits. This is a major trend. And you want to be in it.

The point of this article is to drive home this: If you want to make BIG money, you must attempt to stay in the bull market as long as possible. The big money is in sticking with the overall trend.

So gold's at $700... what do we do now?

We stick with it hopefully for many years to come.

Good investing,

"Old Turkey" Steve

-Steve Sjuggerud

P.S. You know, it's kind of funny... a few years ago, you couldn't convince anyone to buy gold. Now folks are clamoring to get in. That's why we had to write our free research report, Investing in Gold: 2006 How to Make a Fortune in the Coming Gold Boom.

Inside this report, you'll find out the real reason gold prices rise... why gold should move much higher in next few years... and the two best ways to play it in 2006. To read this free report, click here.

Dr. Steve Sjuggerud is the founder and editor of one of the largest financial newsletters in the world, True Wealth.

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