I've only followed Felix Zulauf by reading him in the annual Barron's Roundtables. Which means I don't know too much about him -- but my gut tells me he's a sensible guy. Zulauf is among the investors giving their picks in the second installment of the 2009 Roundtable. This sticks out:
My one recommendation for the longer term is physical gold. Consider
the basic set-up: World economies are so weak that we are seeing
government stimulation of historic proportions. At first this is
deflationary, but it will become inflationary. Gold is the only
currency that won't get devalued. It will be revalued.
More:
If the Fed's liabilities had to be covered in gold, it would sell for
more than $6,000 an ounce. We aren't going back to the gold standard,
but the markets won't trust the central banks anymore. Gold is in a
very slow bull market. The year-end price has been higher each year
since 2001. The gold market could have a shakeout in the next six
months, and the price could fall back to $700 an ounce or below from
today's $850. But two years from now it will be a lot higher. It is one
of the few commodities that held up during the forced liquidation of
almost everything else. We have talked about the risk of currency
devaluation. If you were a citizen of Iceland and your currency went
down by 50%, consider how gold performed in your currency. Gold
functions as a protection against your central bank doing stupid things.
Zulauf almost makes me wish I hadn't sold my stake in Central Fund of Canada some years ago. Central Fund is a closed-end fund that holds gold and silver bullion. I bought when gold was selling for less than $300 USD an ounce. And sold, well, I sold too soon is probably the only way to put it.
NOTE: Barron's says Zulauf recommends waiting for gold to get back to between $600 and $700 before buying.
Here's Zulauf giving his bigger picture views on markets as a whole:
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