Saturday, June 13, 2009

Gary Biiwii -- head n shoulders above the Crowd

got a note from a reader today:

> Hey Kyle,
> The TAs, notably Gary, badmouth and even laugh at the "reverse head and
> shoulders pattern" noted first and foremost by Bill Buckler of The
> Privateer. I assume that the basis for the complaint from the TAs is that a
> reverse H&S pattern is a bottom formation, not the predictor of an upside
> breakout. Is that what the bitch is about?
> Terminology aside, whatever you want to call it, Sinclair says gold will
> make 3 attempts at $1000, and on the 3rd it will break through never to look
> back. It has already made 2. He suggests that the final reckoning at this
> level will occur by the end of this month. That means a permanent break
> through $1000 level. Thereafter $1000 will be support, not resistance.
> Is this completely off the wall? Or what, I mean WTF?!
> Thanks,

first off, in the terminological dispute, I take Gary's side. in fact we both independently made this point the last couple weeks. I in the newsletter and he on his blog. (chronologically he beat me to it, but I didn't realize that until later...)

is the terminology important? depends how you look at it. to me it is just kind of comical that Buckler, et al are using an erroneous term. kind of like if someone who presents himself as musical theorist were to constantly call a work a fugue, when it is actually a sonnet. or a football commentator calling something a nickel defense when it's actually a dime. I am sure we have all cringed in embarrassment when a supposed authority in a discipline reveals his ignorance of his subject by employing erroneous terminology. as I said, it's comical, no more, no less.

that aside, Jim Sinclair and the other prominent voices of the 'Gold Community' have had a pretty pathetic track record forecasting the Gold/Dollar exchange rate. why people still listen to them is beyond me. it reminds me of a blog post I wrote last August, entitled Jim Sinclair, Oil, and a look at USO. here's an excerpt:

I very rarely read Gold Guru Jim Sinclair's site (in fact I rarely read anything relating to current opinion -- Books, Not Blogs!) but I've found myself there twice in the last two days. I must have been interested in seeing how the perma-bull camp's been coping with the recent price collapse. especially since I remember him saying on a radio show back in April that gold would bottom the first week of May. he musta thought he made a pretty good call there for a while!

for one thing, I don't Know how anyone could pick dates for a bottom or a top. I've tried that before and the results proved pretty embarrassing. and then there was the awfully widespread consensus, at least among the public commentators on the net, that 850 was clearly and obviously the ultimate low. how convenient! the majority has never been and never will be cognizant of price extremes and trend shifts. impossible. that's just a basic principle in the Phenomenology of Finance. I didn't make it up, it's been recognised for centuries. go talk to Baron Rothschild, or Dick Watts, or Jesse Livermore, or Mr Baruch, or Mr Neill, or Harry Browne.

but just because Sinclair has hardly ever been right in the past (aside from his long-term bullishness on Gold, which I have no beef with), doesn't mean that he will be wrong about this too. past performance not necessarily indicative of future results and all that.

all I Know is that people who have acted on Gary's analysis since I became acquainted with him could have made a good deal of money. can the same be said of Jim Sinclair? I doubt it.

welcome to the post-guru era.

update 6/15: okay no more terminology for now on at Trend & Value. from the comments section:


'terminological' was already beyond the boundaries of my vocabulary, but, since I get the impression the post was about accurate terminology you might want to reconsider 'call a work a fugue, when it is actually a sonnet.' A Sonnet is a literary form, but I'd give full and due praise for Sonata, or even a tiny Sonatina.

Great blog by the way.