Yes, timing is everything. So I subscribe to the Sir John Templeton way of thinking. Buy things that are so beat up, out of favor, people scream and yell at you for being so stupid...
Then, sit back, and just wait, wait, wait...
The problem I do see sometimes, with people that try that, rush in too quickly. Like now, with R/E or financial stocks. People are too quick to find the bottom.
You have to wait until they don’t talk about it anymore, and even the bad news doesn’t make it go down any further. 2 yrs typically from the top, does the trick, though I was early on tech that way, starting my buying in 4/02. Dang, just needed to wait about 6 more months, and should have due to the psycho up move that you accurately describe as exuberance lasting longer than your solvency.
Exactly, couldn’t agree more. And that’s exactly where gold was around 2000.
One can start looking for a top in gold when M3 stops growing at 3 times economic growth. And yes, I know the fed doesn’t publish M3 growth rates anymore (which was a good signal to buy gold). If one wants to know what the number is one may look in the back pages of the Economist. When M3 is growing only slightly faster than the economy one should be out of gold. I don’t expect to see that any time soon.