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So, if the historical background I’ve given for Porter Stansberry is one of hopeless investment advice and proven dishonesty, how do these factor (if factor they do) into his positions on the price of gold?
First, you might ask, why consider gold at all. This is by no means Porter Stansberry’s forte. Even a quick browse around his many business websites reveals him and his various editors and analysts offering investment advice on everything from small oil companies to the future of JC Penney, and forecasting not merely, say, the trends in interest rates, but the prospects for the White House incumbent.
His companies’ advice on gold, however, is a great indicator for investors: not least because it’s relatively simple. For all the huff and puff that necessarily surrounds any commodity, if you listen to the wonks and nerds, gold accumulates as chunks of useless metal. There are few fundamentals to cause confusion.
Sure, folk will drone on about the demands of Indian jewelry consumers, or miners’ output levels. And then there’s all that stuff about gold being a hedge against inflation (it’s not really), or a safe haven in troubled times (most often people buy and/or sell at the wrong time). But the best view of gold is that its price floats free on a bubbling cushion of hot air.
Perception of perception. Nothing is real. Nobody knows.
No wonder that even the venerable Ben Bernanke, at the time the world’s most powerful central banker, famously told the US Senate banking committee in July 2013 that: “nobody really understands gold prices and I don’t pretend to really understand them either.”
And it’s into this fertile territory that Porter Stansberry sometimes treads, yielding insights for observers of his methods. Hence, a recent report I prepared examining six months of advice from Stansberry (Read it here: Porter Stansberry: was he right on gold and silver?) to see how well he scored.
Matt Badiali: Stansberry sidekick
That report found that, even as Porter Stansberry predicted that gold (and also silver) prices would rise, the actual direction (assessed, for fairness, against a pre-determined time-frame of six months) was the opposite.
But it’s not just Stansberry himself who relentlessly promotes beyond his knowledge. Here is Matt Badiali editor, of the S&A [Stansberry & Associates] Resource Report in August 2013:
Why gold stocks could easily rally 100% this year
“Is it crazy to think that gold stocks could easily double from their current levels?,” he asks, and answers: “Not if you realize the extreme condition the gold-stocks-to-gold ratio is in. And not if you know your market history. As you’ll see, history shows us that gold stocks could jump 100% in the coming 12 months.”
Then there’s Steve Sjuggerud in Steve Sjuggerud’s Stansberry Research Daily Wealth in September 2013:
A low-risk high-reward gold trade right now
“Gold is more hated right now than it’s been in years… and I love it, ” he says. “We have the perfect setup for a great trade in gold. Your upside is 70%-plus in the next year. Your downside risk is just 9%. A risk-versus-reward setup just doesn’t get much better than that!”