Best of Howard Ruff
Recently after silver had taken a beating for two or three days, I was walking out of church and a friend said to me, "Why are you recommending silver; it's so cheap?"
I attempted to restrain myself. "I thought you were supposed to buy low and sell high." You can't buy low unless you buy when things are out of favor. Today gold and silver are out of favor, and that has created a great opportunity. When it was raging to the upside, I was worried that it would be a very expensive entry point. Actually, you can pay almost any price near these levels and some day brag about how smart you were, but you get better opportunities when the market is down. This correction is a good chance to load up. If you don't load up at times like now, how can you possibly buy low?
I'm really talking about the psychology of the investor. When the markets are going crazy, everyone wants to jump in. That's just an observed fact. But this time the metals have given us a real opportunity. These are the opportunities I lust after.
I recently gave a copy of my new book, How to Prosper in the Age of Obamanomics, to a doctor friend of mine. He told me he hadn't taken my advice before because he had listened to his financial advisor when he pooh-poohed gold and silver.
I told him that when he read the book, to buy quickly while the metals are depressed, and if they go lower buy some more.
Opportunity abounds in alleged bad times. I recently did a radio interview when someone read off the titles of several of my books and said, "You've been wrong before, what makes you think you are right now." The only book I was wrong on was the one about Y2K because I under-estimated the government and industry's ability and resolve to fix the problem. The analysis of the problem was correct, but I under-estimated their ability and resolve to fix the problem in time.
Other than that book, I was right even when I wrote about the Inflationary '80s. While there was less inflation (you might even call it disinflation), in the final analysis there was inflation all through the '80s, although it was diminished from the '70s. It was still an opportunity, but I found better opportunities in other places and concentrated on those.
In the final analysis, if you bought during the '80s, you would have bought cheap; you just needed time for it to pay off.
When will this rally be over?
I'm often asked when it will be time to sell the precious metals. In reality I'm being asked when it is time to transfer your gold and silver into greenbacks.
That time may never come. We may be seeing the total destruction of the dollar - the final collapse. The Obama Administration is determined to weaken the dollar, which is a standard procedure for governments. It means they can borrow a lot of money and pay it off with cheap dollars. They can manipulate the currency to make it possible. That is what is happening now. The Fed and the Administration are determined to drive down the dollar, so why on earth would you want to change your investments from metals into greenbacks?
The only time to sell the investments on my a la carte Investment Menu is when the liquidity of the active stock market, such as the mining stocks is diminishing. You will then switch into bullion and coins. Not yet, as there are still plenty of profits to be made, and the market is still liquid, but some day liquidity will be endangered.
If you are concentrating on the things that are going up, like my Investment Menu, you are actually gambling that you will get out before the dollar bottoms out. Any investment denominated in dollars, other than gold and silver, will be a big problem one of these days - but not yet.
Go to my website (www.rufftimes.com) and click on "Free Stuff." You will find an article that describes how we are doing with the Investment Menu. It is up 86.9% through October of this year. Is that good enough?
In the final analysis, you will be happier that you owned some coins and bullion than some of the high flyers. Fly high for now, but be prepared when I tell you to liquidate those things and buy bullion and coins. I doubt I will ever tell you to liquidate precious metals and buy greenbacks.
I think the dollar is in its death throes. When you buy gold and silver you are not just looking for a profit, you are looking for protection against the decline of the unit of account - the dollar.
Howard J. Ruff is financial adviser and writer of the pro-hard money investing newsletter The Ruff Times. Ruff is the author of Famine and Survival in America (1974), How to Prosper During the Coming Bad Years (1979), Survive and Win in the Inflationary Eighties (1981), Making Money (1984), and other books. He has recently updated and re-released his most successful book, re-titling it How to Prosper During the Coming Bad Years in the 21st Century (2008).