But while gold has rocketed, the same can’t be said of its cousin silver.
"If you look at the history of the two metals," says our commodities expert Garry White, "you’ll see that silver is very, very undervalued right now."
Before you rush out and buy up bars of the stuff, though, a word of warning. Silver bullion is not an especially attractive metal for British investors. That’s because it’s subject to VAT.
Garry’s found a much better way to play it...
Follow this link to discover why Garry reckons silver is set to double in value.
FTSE follows US and Japan sell-offs
The FTSE 100 opened down more than 10% this morning. This followed big sell-offs overnight in both the US and Japan.
At the risk of sounding like a broken record, I’m going to reiterate the Fleet Street position:
- Keep an eye out for stocks with genuine long-term potential that are trading at bargain prices <.li>
- Invest in assets other than stocks
- Don’t forget cash
But let’s not forget the old Warren Buffett adage: Be greedy when others are fearful. That doesn’t mean hoover up an old stock — it means keep your eyes sharp for the undeserving losers.
What do I mean by undeserving losers? I mean those shares that have simply been caught up in the downdraft, rather than been the cause of it. Take those that trade on the Asian markets. As the FT states this morning, Asian banks’ exposure to subprime is tiny.
The current pain will not last forever. When it begins to subside, that’ll be the time to strike.
In the meantime, you should stick with those stocks you believe in. Bear in mind we’re heading for a real economy recession, as well as further stock market turbulence. It may be some time before stock values in good companies recover.
Right now is a time to be cautious, and stay defensive. If there are individual stocks you like the look of, make sure they’re in businesses robust enough to withstand the economic downturn. Generally speaking, that means large caps.
Above all, don’t forget to diversify. That means non stock assets. We recommended such an investment to Fleet Street Letter readers back in August. Today, it is slightly above where we entered it. Not especially exciting — but that’s exactly what we wanted. This investment has held its value over a period when the FTSE 100 has dropped 25%.
You can find out more about this investment, and the full story behind why we recommended it, by following this link.
Until tomorrow
Ben Traynor
Editor
Fleet Street Daily
PS In case you missed it yesterday, you can get your free report on Buying Gold Coins for Financial Profit & Protection right here.
Selected articles:
Tom Bulford: How You Could Help Kill Sky-High Dealing Spreads on AIM.
Garry White: Silver Looks Significantly Undervalued.
The Daily Reckoning - After the Liquidity Comes the Liquidation
We are thinking about retiring. Taking up cattle ranching maybe. Or maybe becoming a hermit.
Those are the kind of thoughts that must have passed through millions of minds yesterday.
"The Reckoning..." the New York Times is calling it.
Yesterday, the Dow dropped another 678 points. Dow 5000 — here we come! Yes, our ‘Trade of the Decade’ is working like a charm. While the Dow collapses, gold goes up!
But we can’t take any pleasure in it.
"Our business is offering people financial advice," explained a colleague. "When the market goes down like this, people just lose interest. Nobody wants financial advice. They just want out."
Now, everyone seems to want out.
And so... the reckoning falls on the Daily Reckoning too...
You can read the Daily Reckoning in full here.
P.S. If you enjoyed this article then we encourage you to sign up for the free Fleet Street Daily eletter. Learn what you can expect from today's markets -- and how to prosper in the face of uncertainty. You won't find more thought provoking writing anywhere on the Internet.
