"When There Are No More Sellers Left, You Only have Buyers---We Hit That Point A Week Ago"
By March 2, 2013– Published in on
I had the chance yesterday to connect with Bob Moriarty, founder and publisher of 321Gold.com. Becoming a war hero at the age of 20, Bob completed over 824 combat missions during the Vietnam War, as well as having earned many international aviation records.
It was a fascinating interview, as Bob began buying gold after seeing (first hand) the enormous monetary costs of war, and the explosive inflation that always follows.
He explained that, "When you look around and see how expensive [war] is, you realize that 'Hey, somebody's got to pay for this.' I was in Vietnam, looking around in 1968-69, and said, 'This is crazy. We're not paying for this war [now], [but] we're going to have to pay the price someday'...When I was a kid we used to pay $.19 cents a gallon for gasoline. All of the inflation of the 1970s came directly from the war in Vietnam. Likewise today, the one thing that's baked into the cake, is we're not paying for Afghanistan and we're not paying for Iraq---[but] we're going to someday."
Bob also commented on his participation in the 1970s gold bull market, the 2001 bottom in metals and miners, and explained why today is one of the cheapest entry points he's ever seen.
"People are pessimistic today about [gold and] gold shares," he said, "more than they were in 2001, or in 2008...even the biggest gold companies out there...these guys are getting totally hammered...We had total capitulation a week ago Wednesday, and people were panicking, and people wanted out of gold at any price. It was irrational and it was a foolish thing to do. This is the best time to be buying, not the worst time."
All the "bad news" emanating from the space is an indication of just how oversold the market is, he further explained. "A comment I've heard many years ago, is that at every top there are 100 reasons to buy, and at every bottom there are 100 reasons to sell. It sounds too simple to understand...but it's just that simple. If you can count 100 reasons why you should buy something, then you should do the opposite. If you can count 100 reasons to sell something, then you should do the opposite...Investing is about psychology. When 97% of people want to be sellers, it means you don't have any sellers left, you only have buyers---and we hit that point a week ago."
In a concluding remark, Bob said,"It'll be weeks or months before people realize we're at a major bottom...a tremendous opportunity. We're going to go through the same thing [a bubble] in gold and silver that the stock market went through, that the Nasdaq did in 2000, and what housing did in 2005 and in 2006...but we're a long way from that point."
To listen to this full interview on BullMarketThinking.com, click here.