what's up guys my name is Ciaran and
you're very welcome to the channel
in this video i want to talk about my
gold investing strategy
i want to talk about why i'm buying gold
i want to explain
what i think the price is going to do
over the next four to five years
and i want to explain when i intend to
sell my gold position as well
very recently i did a video talking
about why i think
silver is going to go to 50 and in that
video i talked a lot about gold as well
and specifically i talked about the
increase in the monetary supply
and how that affects precious metal
prices but in this video i want to dig
deeper into just gold
i want to explain two reasons why i
think
now is the perfect time to be investing
in gold i want to explain what i think
is going to happen to the price
over the next four to five years and as
i said i want to get into a bit of
detail around when i intend on selling
my gold position so if that's something
you're interested in hearing about if
you're excited about this video
then please smash the like button and if
you haven't yet
subscribe to the channel
so why am i buying gold well there's
actually a lot of reasons why i'm
investing in gold but there's
two big reasons why i'm doing it and i
want to discuss
them here today the first reason guys is
that
smart money is buying gold ray dalio for
instance who is a really really
successful
investor and the owner of bridgewater
has been buying gold
very very heavily and this came out in
their q2 filings
now ray has always been an advocate of
gold and he prescribes this thing called
the all-weather portfolio that's
supposed to essentially give
a good return no matter what the
economic outlook is so whether we have
inflation deflation
whether we've low growth or high growth
the all-weather portfolio is supposed to
perform okay
in all types of scenarios and typically
ray has prescribed
allocating about five percent of your
portfolio to gold
as part of his all-weather strategy
however in the q2 filings we can see
that bridgewater ray dalio's fund has
deviated
massively from rey's prescribed five
percent allocation
and in fact in q2 we know that
bridgewater had poured a massive
400 million dollars into gold backed
etfs
and this has massively increased
bridgewater's positioning in gold
in q2 bridgewater raised its position in
sdpr gold trust from 600 million to over
900 million
and as well as this it raised its
position in ishare's gold trust
from 176 million to 268 million
now to put this in perspective at the
end of q2 bridgewater's total
assets under management was about 5.9
billion
and of this 5.9 billion bridgewater now
has
20 assigned to gold this is
massive news and it shows a huge shift
in ray dalio and bridgewater's
strategy when it comes to investing on
top of this then we've all heard the
news
that warren buffett has bought a stake
in barrack gold
berkshire hathaway has bought over 20
million shares for a total value of
about 564 million dollars
now this is really meaningful because
historically as you probably know
buffett has been very against buying
gold now while this isn't
gold it is a minor and it does generate
a cash flow which buffett
is of course an advocate of it does show
a real change in buffett's philosophy
clearly warren are the people at
berkshire expect the price of gold to
increase
over the near term at the end of the day
berkshire invests for cash flows
and if the price of coal decreases well
then the cash flows that
barack gold generates are going to
decrease also whereas if the price of
gold increases
the cash flows from very gold will of
course increase alongside of the price
of gold
so clearly warren buffett is bullish on
the price of gold
on top of this thing guys berkshire sold
out of most of its bank positions
now while neither of these pieces of
news are monumental on their own
when you put them together okay it tells
a real story
in my opinion berkshire selling its bank
stocks
and buying a gold miner stock really
conveys what they think the next couple
of years has in store
as always guys when you're investing you
need to be mindful of what the smart
money is doing
because people like warren buffett and
ray dalio they have connections
and insights and information that us
common folk could only ever dream of
okay
don't for a second think that these big
positions and these big bets
aren't being made with insider knowledge
and information i mean berkshire are a
massive art little war a massive
shareholder in these banks
so they're privy to information on the
inside they also have massive
connections outside of the banks
giving them huge amount of information
on what's happening in the macular
environment
what's happening with the fed the
government and the economy in general
so when these guys make a position in
gold when these guys make a strategic
shift
in how they allocate their capital you
better pay attention so guys that's the
first reason i'm buying
gold so the second reason i'm going to
be buying gold guys is because
of inflation so on wednesday the fed
chairman mr jerome powell
took to a virtual stage to inform us of
a change in
fed's policy now as usual jerome used
lots of big words and convoluted phrases
to try and explain to us common folk
about this shift in failed strategy and
he made it sound very reasonable and
logical and you know it all kind of went
over most people's heads well it clearly
went over the media's head anyway
because nobody was talking about really
what this means
but don't worry because if you can't
decipher fed speak
i found this meme that clearly
articulates what jerome
said
now what does that actually mean well
basically it means that the fed is going
to do everything in its power
to increase its measure of inflation
which is called the consumer price
index to above two percent now what does
the fed have in his power to do this
well it has a printing press and it has
the ability to lower rates
or at least keep them low now what does
this two percent actually mean
it's two percent as measured using the
cpi the consumer price index
and this is a measure that the fed uses
for inflation and it's supposed to
measure the cost
of our standard of living so it's
supposed to take a fixed
basket of goods and services and measure
the
price increase of those over time and
the idea was originally
that the fed was supposed to maintain
prices so that they don't increase at a
rate greater than two percent
so originally when this actually came
about if we had one percent inflation
the fed was considered to have done
their job but now that's shifted in such
that
now the fed is saying that they have to
maintain inflation at two percent
well that was actually never the
original thought behind this it was that
they were supposed to keep it
below two percent so that people could
maintain their standard of living
what is inflation really okay it's the
devaluation of our currency
it's nothing really to do with prices
prices will go up and down depending on
what's happening in the economy
in its truest form it's a devaluation
of our currency the cpi is not a good
measure of that
but to make things worse even when it
comes to the cpi itself
let me show you a website called
shadowstats.com to explain
how they've actually changed this
measure over time so that it basically
under-measures inflation so this website
shadowstats.com is by a guy called john
williams
and basically what he's done here is
he's measured
cpi according to the way they used to
measure back in the 1980s
before they changed it with all this
stuff called hedonic quality
adjustments and you know substitution
like basically
in the original fixed basket of goods
and services you might have had
steak or some sort of meat product and
then at the 90s they brought in this
thing called substitution where they
could substitute that for a lower
cost alternative like spam and the
thought process here was well you can
just eat spam instead of stake and
that's
basically the same as maintaining your
standard of living
but that's hard shit what we can see
here since the 1980s the cpi measure of
the fed which is in red has kind of
oscillated from around five percent
you know down to one two percent it went
negative
at the crash in 2008 and then it's been
kind of oscillating around
two percent or slightly below but what
we can actually see here is
based on shadow stats alternative cpi
which is based on how they calculated in
the 1980s
that real inflation as measured per the
1980 standard
has deviated massively from the fed's
measure of inflation
and as i said this is because they
brought in lots of weird convoluted
things
to artificially lower the rate but in
actual fact
real inflation okay since 2010 we'll
take it
has been nearer to about 10 as opposed
to below 2
so this is really important stuff right
because now when
the fed chairman jerome powell says that
they're going to try and overshoot the 2
inflation target we know that that
really means that
inflation is going to run upwards of
above 10 percent
and i guarantee you warren buffett knows
this ray dalio knows this
and everyone else in the smart money
industry knows this
and what's this going to do well it's
going to inflate asset prices it's going
to drive up
housing prices is going to drive up the
stock market and it's going to drive up
precious metals
and everybody in the upper echelon of
society who actually holds real assets
are going to get richer meanwhile
everybody in the lower class of society
who don't have assets and actually live
paycheck to paycheck on fiat currency
and saving fiat currency
are going to get poorer so this is guys
in a nutshell the second reason why i'm
buying gold
now this whole inflation fiasco
the lawyer being told has huge
implications i'm not going to get into
it in detail here but if you'd like to
hear more about it i can do a standalone
video on it
just let me know down below in the
comments okay okay so now i want to talk
about my investing strategy with gold
because when you invest into anything
it's important to have a strategy when
you intend on cashing out and what do
you expect to happen over the next four
to five years
you know this is the perfect time to say
i'm not a forecaster and i'm certainly
not a financial advisor so this isn't
any recommendation this is just what i
intend on doing always do your own
research your own due diligence before
making any investment decisions
also at the end of this video if you
think i'm absolutely
off the wall or you think i'm being
really stupid in my decisions let me
know in the comments below i'd love to
hear your thoughts on this
but personally okay i'm expecting the
price of gold to at least double over
the next four to five years
however i would not be surprised if it
even tripled
because historically when gold has
overshot its fair value it's gone
quite far in that direction before
eventually topping out and returning
back to earth
now there's three real graphs or
indicators that i'm going to be watching
that i want to share with you now and
i'm going to talk you through my process
in terms of how i know when i'm going to
cash out on this
okay guys so there's three charts i want
to go through with you today
the first one is the price of gold okay
and i'm looking at this on
macrotrends.net
and i'm looking at it on a non-inflation
adjusted basis
and the reason i'm doing this is because
if we inflation adjust it
the figures that are being used here are
the cpi figures which we know
are absolute horse ship so we're not going
to use them
we're just going to look at it
non-inflation adjusted the second graph
i want to look at here
is the s p 500 to gold ratio again on
macro trends and this basically looks at
the number
of ounces of gold it would take to buy
the s p 500 on any given month
this is a really interesting chart that
shows us so much data and one
the target graph then i want to look at
is the price of gold
against the stock market so this one's
actually looking at
the historical percentage return for the
dow jones industrial average against a
return for gold
over the last 100 years and between
these three charts
we can be in a really good position to
know when to sell out of our gold
position
the main chart i'll be looking at is
this one right and let me explain how
this one works
so basically we've got some really
massive peaks and troughs in this chart
and it's during these peaks and troughs
that we should be neither buying or
selling gold
let me explain by looking at this
example here from the 1980s
when this graph hit an all-time low of
0.17 which basically means that the s
p 500 was dark cheap in comparison to
gold so either gold was really high
or the stock market was really low well
let's go and have a look and see what's
happening there so if we look at the
1980s
we can see sure enough that gold was in
a huge
bull market so if you were looking at
this graph here
you would have known that now would have
been the time to sell gold
because the s p 500 was so cheap in
comparison to it
in contrast then if we look at this
major peak here
an all-time high of above five we can
say that either the stock market was
really really expensive
our gold was really really cheap but
either way we know that this would be
the time to be buying gold
so let's take a look and see what was
happening in 2000.
so lo and behold we can see that the
stock market was at an all-time high
and that goal was in a serious bear
market at the time
this was of course the dot-com bubble
and the stock market then crashed
and of course after this gold rallied
massively all the way up to 2011
at a 439 percent gain okay now let's
fast forward to today
where we see we're kind of at 1.66 kind
of in a median range i would say we're
not too oily or not too low
but what we can see is the general
direction of this and it looks like it's
coming down
and based on the macro backdrop based on
the price of gold
and based on the s p 500 and based on
the stock market in general
i believe that it is going down which
means that gold is likely to get more
expensive
when measured against the stock market
so my outlook here is that this is going
to drop
down to somewhere around this region
here
and that's when i would intend on
selling and there's two things that
could happen to drive this down
either the price of gold could spike or
else the stock market could crash
but either are the good for gold now the
opposite of that would be if this graph
trends up here which means that the
stock market rallies in comparison to
gold
or else that the price of gold drops
relative to the stock market
and i think those two scenarios are much
less likely
than the other ones that i just
mentioned that will drive this graph
down but either way
it means that in my mind gold is set to
outpace the general market
it might not outpace individual stocks
but i think it will outpace the overall
market
and i'll be watching this graph over the
next four to five years
and my intention is to sell down around
here now if there's a
significant shift in momentum and we
start to see this graph rally upwards i
will of course
reconsider my situation in terms of the
actual price of gold itself
i think it's very feasible to see this
rally upwards of three to four thousand
over the next four to five years
because as i just mentioned the fed is
going to continue printing money
and are going to keep rates low so what
you're looking at here is gold
denominated in the value of the dollar
and i expect the dollar to weaken
so therefore it's not inconceivable to
imagine the price of gold
shooting upwards of four to five
thousand dollars if we look at
this graph here which as i said compares
the returns of the stock market against
the
returns of gold i can't imagine the
stock market rallying higher
and if it does i can't imagine gold not
outpacing it to be honest
but what i expect to happen really is
that the stock market
is going to either drop or go flat and i
expect the price of gold to come up
and expect the two of them to converge
together
i don't expect a divergence here and all
of this and these tree graphs
as i said they make me bullish on gold
they make me more bullish on gold
than the overall market so guys i hope
that gave you some insight into why i'm
buying gold
and it gives you a bit of insight into
when i intend on selling and
it might help you make your decision in
terms of when you will sell your
positions if you're also invested in
gold
let me know in the comments below what
you think of the tree graphs that i
showed you
what you think of my thinking in general
and if you think i'm
on the right track if you got value from
this video guys don't forget
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as always thank you so much for watching
have a smashing day and we'll see in the
next one
you
