Cramer indicator confirmed by Grantham Indicator

[oddlots]

Posted comment that Cramer had gone negative gold the other day. (Sigh of relief.) Following should be the confirmation:

"The great Jeremy Grantham buys Gold-from todays interview in the Chicago Tribune:
When asked by a money manager what he would buy now, Grantham said, “long
mattresses. He confessed to the group that “I bought my first gold last week, and I hate gold. It doesn’t pay a dividend. I would only do it if I was desperate.”



Quoted in comments from Russ Winter's blog today. Grantham runs GMO:

http://www.gmo.com/america



He manages Cheney's money which is disturbing and comforting at the same time.

[Nervous Drake]

Re: Cramer indicator confirmed by Grantham Indicator

.

[Brooks Gracie]

Re: Cramer indicator confirmed by Grantham Indicator

"The great Jeremy Grantham buys Gold-from todays interview in the Chicago Tribune: When asked by a money manager what he would buy now, Grantham said, “long mattresses. "

I wouldn't want physical cash under my mattress. Any else out there besides me think the "Forever Stamps" are a good investment? They are valid forever, regardless of what you pay for them now. And postal rates have gone postal over the last 20 years, easily outstripping inflation.

And demand for them will never fall.

[metalman]

Re: Cramer indicator confirmed by Grantham Indicator

"The great Jeremy Grantham buys Gold-from todays interview in the Chicago Tribune: When asked by a money manager what he would buy now, Grantham said, “long mattresses. "

I wouldn't want physical cash under my mattress. Any else out there besides me think the "Forever Stamps" are a good investment? They are valid forever, regardless of what you pay for them now. And postal rates have gone postal over the last 20 years, easily outstripping inflation.

And demand for them will never fall.

how does grantham get this rep as a great seer? he's seven years late with this buy gold call.

[Andreuccio]

Re: Cramer indicator confirmed by Grantham Indicator

"The great Jeremy Grantham buys Gold-from todays interview in the Chicago Tribune: When asked by a money manager what he would buy now, Grantham said, “long mattresses. "

I wouldn't want physical cash under my mattress. Any else out there besides me think the "Forever Stamps" are a good investment? They are valid forever, regardless of what you pay for them now. And postal rates have gone postal over the last 20 years, easily outstripping inflation.

And demand for them will never fall.

The concept is great, but how would you put it into practice. You can hedge your own postal costs, but I can't imagine they'd be that liquid if you're talking about tens of thousands of dollars worth of stamps. How will you unload them, without doing hundreds of transactions on ebay at $10 each?

[oddlots]

Re: Cramer indicator confirmed by Grantham Indicator

how does grantham get this rep as a great seer? he's seven years late with this buy gold call.

True enough. But then Jim Grant recently stated he was long gold for the first time I've ever heard and I'd be happy to know what Jim Grant has forgotten about money markets and investment.

Gold is unpopular and stigmatised. I like to think of it as an ironic asset class in the same way that Jon Stewart's Daily Show is an ironic news source. When The Daily Show won an Emmy its producer said something like, it is not that we're so good but that the MSM is so crap. That's how I feel about precious metals.

It is hard to come to the conclusion that we have so utterly failed to organise our affairs on almost every level that it actually makes sense to pay someone to dig some metal out of the ground purely so that it can be hoarded. Further, this "utility" only exists because the metal's value is precisely not something amenable to human efforts to manage (and screw up.) That is an extraordinary vote of no-confidence in current institutions.

Given that, it is not surprising to me that a lot of very thoughtful, prudent and intelligent money managers are late to the call. I've always found Grantham's commentaries from GMO impart a lot of valuable understanding. I wouldn't hold a grudge because he's late to lose almost all faith in the system.

[metalman]

Re: Cramer indicator confirmed by Grantham Indicator

True enough. But then Jim Grant recently stated he was long gold for the first time I've ever heard and I'd be happy to know what Jim Grant has forgotten about money markets and investment.

Gold is unpopular and stigmatised. I like to think of it as an ironic asset class in the same way that Jon Stewart's Daily Show is an ironic news source. When The Daily Show won an Emmy its producer said something like, it is not that we're so good but that the MSM is so crap. That's how I feel about precious metals.

It is hard to come to the conclusion that we have so utterly failed to organise our affairs on almost every level that it actually makes sense to pay someone to dig some metal out of the ground purely so that it can be hoarded. Further, this "utility" only exists because the metal's value is precisely not something amenable to human efforts to manage (and screw up.) That is an extraordinary vote of no-confidence in current institutions.

Given that, it is not surprising to me that a lot of very thoughtful, prudent and intelligent money managers are late to the call. I've always found Grantham's commentaries from GMO impart a lot of valuable understanding. I wouldn't hold a grudge because he's late to lose almost all faith in the system.

he doesn't understand how shit works. he's old school like richard russell. kinda quaint, but useless.

[Brooks Gracie]

Re: Cramer indicator confirmed by Grantham Indicator

The concept is great, but how would you put it into practice. You can hedge your own postal costs, but I can't imagine they'd be that liquid if you're talking about tens of thousands of dollars worth of stamps. How will you unload them, without doing hundreds of transactions on ebay at $10 each?

Walk into any supermarket or pharmacy that sells stamps and ask them to buy them at a 10% discount to face value.

[jtabeb]

Re: Cramer indicator confirmed by Grantham Indicator

The concept is great, but how would you put it into practice. You can hedge your own postal costs, but I can't imagine they'd be that liquid if you're talking about tens of thousands of dollars worth of stamps. How will you unload them, without doing hundreds of transactions on ebay at $10 each?

Walk into any supermarket or pharmacy that sells stamps and ask them to buy them at a 10% discount to face value.

What we have here is the birth of the first "inflation protected" fiat currency.
Guaranteed service provided for fixed initial purchase cost. Great idea, I want some "foreever" Dollars then I will sell my gold and silver, NOT!

[metalman]

Re: Cramer indicator confirmed by Grantham Indicator

What we have here is the birth of the first "inflation protected" fiat currency.
Guaranteed service provided for fixed initial purchase cost. Great idea, I want some "foreever" Dollars then I will sell my gold and silver, NOT!

treasury needs to bring these back...



The Treasury paid soldiers during the inflationary period of the American Revolutionary War with bonds indexed to a basket of commodities. Can the method be applied to tax rebate checks?

The picture above is of the world's first known inflation-indexed bond. They were issued by the Commonwealth of Massachusetts in 1780 during the Revolutionary War. Robert Shiller made the discovery in his research in 2003: "These bonds were invented to deal with severe wartime inflation and with angry discontent among soldiers in the U.S. Army with the decline in purchasing power of their pay."

The bonds were indexed to the prices of a basket of commodities: beef, corn, wool, and sole leather. The table below shows how depreciation was calculated for each item.



Click to enlarge

Shiller goes on: "Although the bonds were successful, the concept of indexed bonds was abandoned after the immediate extreme inflationary environment passed, and largely forgotten until the twentieth century. In 1780, the bonds were viewed as at best only an irregular expedient, since there was no formulated economic theory to justify indexation."

Issue tax rebates as bonds indexed to commodities

[santafe2]

Re: Cramer indicator confirmed by Grantham Indicator

Posted comment that Cramer had gone negative gold the other day. (Sigh of relief.) Following should be the confirmation:

"The great Jeremy Grantham buys Gold-from todays interview in the Chicago Tribune:
When asked by a money manager what he would buy now, Grantham said, “long
mattresses. He confessed to the group that “I bought my first gold last week, and I hate gold. It doesn’t pay a dividend. I would only do it if I was desperate.

http://www.gmo.com/america

I didn't find his advice so much different than EJs. Specifically he says, ..."take as little risk as possible." I do think that's the advice from this board. He also makes another statement that I agree with, "...keep your powder dry...". The next few years will be a traders market but great investments lie ahead. "Live to fight another day", he says.

I also like his reference to markets, be they debt or equity markets, reverting to mean. This time is not different, just more painful than most of us alive today can remember because we've never witnessed back-to-back bubbles. We've already seen the first one revert and the second one is well under way.

He makes another great point and that is that bubbles don't just revert to mean, they over-shoot to the downside. This happened with commodities, it happened with tech stocks and it will likely happen with real estate. As he says, "keep your powder dry".

[jk]

Re: Cramer indicator confirmed by Grantham Indicator

It is hard to come to the conclusion that we have so utterly failed to organise our affairs on almost every level that it actually makes sense to pay someone to dig some metal out of the ground purely so that it can be hoarded. Further, this "utility" only exists because the metal's value is precisely not something amenable to human efforts to manage (and screw up.) That is an extraordinary vote of no-confidence in current institutions.

Given that, it is not surprising to me that a lot of very thoughtful, prudent and intelligent money managers are late to the call. I've always found Grantham's commentaries from GMO impart a lot of valuable understanding. I wouldn't hold a grudge because he's late to lose almost all faith in the system.

i strongly agree with your sentiments here. i think gold is essentially worthless, good for trinkets and not much else. as you say, it exists to be hoarded. and men have so conspired to screw up our financial system, that i have 30% of my assets in pm's. what a sorry state of affairs.

as to those who come late to the party, i also agree with your accepting attitude towards grantham. i have enormous respect for grantham. i've read his quarterly letters for years. he is thoughtful and insightful. he's among the best there is in the mainstream world of financial. [the mswf?]

and if the mainstream world of finance is now just starting to discover gold, imagine the ride we gold holders have ahead of us. ;) we are at launch for leg 2 of what i expect will be a 3 leg bull market in gold. [although i think the launch may actually be preceded by a correction right here.]

[Guest]

Re: Cramer indicator confirmed by Grantham Indicator

;) we are at launch for leg 2 of what i expect will be a 3 leg bull market in gold. [although i think the launch may actually be preceded by a correction right here.]

I don't think your skeptic's patience will even be unduly tested for a correction JK. "Launch Pad with all systems go" is the order of the day. Now imagine a world where all the worms were turning and conspiring to pauper us all, and gold and silver did not even exist eh? That would be a good deal uglier yet. At least we have the benefit of their "very limited utility" at this time. :rolleyes:

[Judas]

Re: Cramer indicator confirmed by Grantham Indicator

The Treasury paid soldiers during the inflationary period of the American Revolutionary War with bonds indexed to a basket of commodities.

That's cooler than a cucumber in a bowl of hotsauce.

[GRG55]

Re: Cramer indicator confirmed by Grantham Indicator

True enough. But then Jim Grant recently stated he was long gold for the first time I've ever heard and I'd be happy to know what Jim Grant has forgotten about money markets and investment...

Grant was writing, and speaking at the occasional conference, about personally being long gold (at that time in the form of Newmont shares) quite a few years ago.