MarketWatch.com is a site run by the Wall Street Journal, and has fairly up-to-the-minute stock market data. But the real draw for me are the posts to the main article, that you get to by clicking on the main article. I don’t read the article itself, since it’s basically just rah-rah puff by the Journal. I go directly to the posts.
Many of the posts are written by pretty sharp people who have been trading for some time. They are small traders, representing those who invest their money directly and do not depend on the fund managers to make their decisions for them. To make money, they have to have some sense… as well as dollars to invest.
There has been a very interesting change in both the substance and tone of their posts. A few weeks ago, it was, ‘oh boy, the market is volatile, so there is a change to make some money’. Then it changed to ‘uh… the market is doing strange stuff.’ Then the bailouts started, and it was ‘guys, this is getting very strange… I can literally see the clandestine manipulation of the government and other big players in the stock prices,’ which they call the PPT, or Price Protection Team, which was formerly just a rumor, a boogyman that many did not believe in.
Next the mood changed to, ‘(expletive deleted) I have NO idea what the market is going to do. It goes up on the worst news. It’s like it is disconnected from reality.’ And these pretty smart people started to basically panic. ‘Okay, that’s it… I’m not trading any more… but I don’t know what to do with my money.’ Some suggested gold, which is usually a pretty good hedge against falling stock prices. But gold is acting weird too. Some are looking for it to go from about $850 to over $2,000 and ounce. Others, looking at the obvious manipulation of stocks, aren’t so sure.
Which brings us to the really interesting comment I saw in one of the posts. It said that if food could be compressed so that you could get as much value as an ingot of gold in the same space, that would be the perfect investment. Because you can always eat food, and there may come a time where gold may be worthless because of either strange market pressures, or perhaps because of the government not allowing people to have it any more. There are already some restrictions, apparently.
I think that is brilliant. The perfect investment right now is food.
We still can’t compress it to get $800 worth in the palm of our hand. But the freeze-dried food and other emergency food supplies available are pretty condensed and very storable. I think it is worth far more than gold. Because even if the value of gold skyrockets, if there comes a time where there is a severe scarcity of food, gold may not do a person much good. Who would sell the food they need to live for a pretty piece of metal?
Not me.