Today’s missive is by one of our favorite thinkers, prolific investment strategist Don Coxe.
As an advisor to several publicly traded funds, part of Don’s job is to identify sectors that will make money for his clients. So it’s telling that he’s recently turned his attention to probably the most hated investment of the last two years: gold and gold stocks. (If you need a good reason why you should invest in them now, watch our recent all-star video event Upturn Millionaires
 with eight top resource and investment experts, including Doug Casey, Frank Giustra, and Ross Beaty.)
Regular readers of this column will recognize Don for both his unmatched historical knowledge of the investment markets and for his knack for explaining difficult concepts with fun analogies.
Don delivers on both with this piece. Read on for his entertaining analysis, penned exclusively for Casey Research readers, on why gold’s immediate future looks bright.
Dan Steinhart
Managing Editor of The Casey Report
A Very, Very Interesting Year
Don Coxe, Chairman, Coxe Advisors LLC.
For the past year, we have rarely written on gold, because there were too many other investment opportunities, and the good old S&P was just going up month after month. This was, for most equity investors, Voltaire’s “best of all possible worlds.†The economy was of Goldilockian temperature and moderation, politicians were behaving the way cynics expected and optimists despised, and the Fed was successfully injecting massive doses of “financial heroin†into the US—and global—economy without any signs of ill effects… or any remarkable enthusiasm for risk-taking.
Some of us were disconcerted that an increasing proportion of the work force were leaving it for a life of disability benefits, food stamps, and other confections from the government’s banquet table. Meanwhile, bankers were happily absorbing the financial heroin of zero interest rates and a continuously fattened Fed balance sheet. They loaned, but not in ways that stimulate the economy. They were simply lending back to the Fed at a big markup and levering up their balance sheets with short-term, low-risk paper issued by other institutions.
We couldn’t help noticing the resemblance to the land of the lotus eaters in Homer’s The Odyssey. When Odysseus and his sailors landed among the lotus eaters, they enjoyed their floral diet and drifted into a state of dreamy satisfaction, refusing to return to the risks of “the wine-dark seaâ€â€”even though they swore they’d like to go home… sometime. Eventually, Odysseus and his most loyal followers lashed their lassitude-loving shipmates to boards and dragged them back to their ship.
