Coddiwomple Says Buy Gold

10/07/2020 9:38 am EST

Focus: COMMODITIES

Landon Whaley

Editor, Gravitational Edge

Boy, do we humans like to complicate things. Three television channels weren’t enough for us, so now we’ve got 800, and there is still nothing to watch, says Landon Whaley of Whaley Global Research.

Two types of coffee (black or with varying levels of cream and sugar) weren’t enough for us, so now we’re waiting in line behind a guy losing his man card while he orders an “Iced, Half-Caff, Ristretto, Venti, 4-Pump, Sugar-Free, Cinnamon, Dolce Soy Skinny Latte.”

No place is our human-born desire to complicate things more prevalent than in the investing game.

Seemingly everyone is chasing the epic bounce off a depressionary low, but they feel conflicted the whole time. Those investors are wondering if it’s a bear market rally sure to end badly while simultaneously feeling scared they’ll miss the next bull run higher. Rather than join these folks in the fray, we are going to embrace Occam’s Razor and discuss why the simplest solution staring investors right in the face is to be long gold.

I know, gold has had a healthy -12.5% correction since peaking on August 6, but its year-to-date return in excess of +22% is still opening up a can of whoop a*& on every other US-based market. The only markets performing better are lumber, silver, tech stocks, and gold miners.

Year-to-date returns aside here’s why being long gold is the simplest solution to the investing quagmire facing investors as we traverse the final quarter of the year:

  • What trade works if US growth continues to slow from here, and we remain in a fall fundamental gravity?
  • What trade works if US growth continues to slow, but inflation stops accelerating, heads south, and puts us back into a winter FG?
  • What trade works if the Fed continues down its path of unprecedented monetary policy and directly towards negative rates?
  • What trade works no matter what actions are taken by other central bankers around the world?
  • What trade works no matter who gets elected President?
  • What trade works when global economies diverge from each other with some remaining in spring and summer fundamental gravities while others join the US in either a fall or winter?
  • What trade works as the US labor market sees more and more people shift from being “temporarily” laid off, to permanently being home to greet the mailman each day?
  • What trade just corrected and is giving us the best buy-in price in over two months?

Playing the investing game at the highest levels is by no means easy…nor simple. The global economy and financial markets are so complex and dynamic that it’s rare to find a single trade that works in a myriad of economic environments and central bank scenarios.
 
That said, you don’t have to overcomplicate the current investing environment; the simplest solution, and the solution that is profitable in a number of scenarios over the next three months, is being long the barbarous relic.

To learn more about Landon Whaley, please visit WhaleyGlobalResearch.com.

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