Over four months ago, I posted an item where I commented that David Frum (former speechwriter for President George W. Bush and current operator of the Frum Forum) opined that gold was a bubble. Mr. Frum made this observation on the October 28, 2009, episode of the radio program, Marketplace.
On October 28, 2009, the price of gold stood at $1029.90 an ounce.
Six months later, when I made my first post on this subject, the price of gold had risen 13.7%
Ten months later, on August 27, 2010, the price of gold was $1236.00, an increase of 20%.
So, if an investor had listened to Mr. Frum and dumped his gold, he or she would be out a gain of 20%. Likewise, if an investor had been listened to Mr. Frum on that October day in 2009 and taken his opposite advice, he or she would be up twenty percent.
As I stated in my previous post, anyone can state that an asset is a bubble, because sooner or later, the value of that asset will drop. The true prognosticator would be able to tell you when the bubble will burst.
Anyone else is just trying to sell you something.