Dennis Gartman Forget value; ride rallies – MoneyWeek

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Ifyouhad$10,000toinvest,wherewouldyouputitnow?

Idprobablykeepitinasavingsaccountandwaituntilstockpricesgosidewaysorevencorrect10%or15%。

Untilthatcorrectionoccurs–andmyguessisthatitwillbesoonernotlater–IdontthinkIdbuymuchofanythingatall。

Butifyouputaguntomyhead,Idbuyintotheraw-materialsexportingcountriesthataredoingbettereconomicallythantheUS。

SoIdbuyAustralianbanks,tarsandsgroupSuncor(TSX:SU)inCanada,andBrazilianoilgiantPetrobras(NYSE:PBR)。

Howshouldinvestorsreacttorisingbudgetdeficitsaroundtheworld?

Withagreatyawn。

Contrarytowhatpeoplesay,overthelast30yearsrisingbudgetdeficitshavegivenwaytolowerinterestrates。

Soyoushouldntbetooconcerned。

Risingbudgetdeficitshavebeenassociatedwithbothbullandbearmarketsinequitiesandrisingandfallinggoldprices,bondmarketsandbasemetalprices。

SoImnotsureiftheresanycorrelationtobedrawn。

WhataboutthestructuralshiftfromtheWesttoAsia?

ImnotsureitsaproblembecauserisingpercapitaincomesinChinaandIndiawillgiverisetothegreatestboominconsumerdemandwelleversee。

ThatwilloffsetfallingconsumerdemandinEuropeandtheUS。

Imnotsurehowtoplayitinstockprices。

ButifIhada22-year-oldson,whodidntknowwhathewantedtodowithhislife,Iwouldfundhimandtellhimtogobuythegas,plumbingandfixturesdistributorshipinthetenthlargestcityinChina,andsaygomakethiswork。

Becausethatguyisgoingtogetwealthyoverthecourseofthenext50years。

Thepeoplewhosellthenormalthingsofmodernlifetoarisingconsumersocietyaregoingtomakefortunes。

Youverecentlybeenbullishongold…

Well,Ihavebeen,butpleasewritethisdown。

IdontlikemyselfwhenImbullishongold。

Imnotagoldbug。

Idontlikethegoldbugs–Ithinktheyreadisdainfulbunchofpeoplewhoarepessimisticaboutthefuture。

Idontlookatgoldasbeinganythingotherthanaprice,anumberdancingacrossapage。

Thegoldpriceisrisingbecauseofalossoffaithincurrencies。

Ifithassomethingtodowithinflation,whyisthelongendoftheyieldcurveat2。

5%?

Ithinkthebondmarketissmarterthanthegoldmarket。

Becausetherearemoreparticipants,thereismoreatriskandmorecircumstancesatplay。

Andifthebondmarketisattheseyields,itisntworriedaboutinflation,sotherehastobesomethingelsedrivinggoldpriceshigher。

AndIthinkitsageneraldisdainforcurrencies。

Doyouthinkwerefacingdeflation?

SomeoneaskedmeontelevisionacoupleofmonthsagowhetherIthoughtwedseeinflationordeflation。

AndIsaidyes。

Ithinktherewillbeboth。

Ithinktherewillbeinflationasfarasrawmaterialpricesareconcerned。

Buttherewillbedeflationasfaraswagesareconcerned。

TheautoworkerinDetroitisnolongerlookingacrosstheriverandseeingtheautoworkerinWindsor,Ontario,ashisopponent。

Instead,henowlookstoIndiaandChinaandseesabillionpeopleashisopponent。

Andthatsgoingtokeepinflationdownaswageshaveafargreaterimpactonthepriceofanautomobileoracomputer。

Afterall,whatsthecostofachip?

Acoupleofgrainsofsilicon–thatsnotmuch。

Iflabourratesareweakandfalling,evenifraw-materialspricesarerising,theultimateimpactoninflationisnon-existent。

Whatsyourstrategyforpickingstocks?

IbuythingsthataregoingupandIshort-sellthingsthataregoingdown。

SoIfollowthemomentum。

Imnotavalueinvestor。

Ivewatchedtoomanyvalueinvestorsbuysomethingat80thathadvalue,thenbuymoreat60whenithadevenmorevalue,andagainat40whenithadyetmorevalue,thenat20whenithaddemonstrablymorevalue,andthenlosealltheirmoneywhenitfellintobankruptcy。

WhoisDennisGartman?

Nowoneofthehighest-profilemarket-watchersintheUS,DennisGartman,59,wasbornintoaverypoorfamilyinAkron,Ohio。

Hisfathermadecompressorsforthelocalcar-manufacturingindustry。

IfitwasntforthescholarshipsIwon,Iwouldnthavebeenabletogotouniversity。

Gartmansayshewatchedthemarketsfromthesixthgrade(equivalenttothefirstyearinsecondaryschoolinBritain)。

AfterleavinggraduateschoolinNorthCarolinaintheearly1970s,hebecameaneconomistforabodypromotingthecottonindustry。

Hewentontotradecurrenciesforabank,andboughthimselfaseatontheChicagoBoardofTradecommoditiesexchange。

In1987,hebeganproducingTheGartmanLetteronafull-timebasis?

Today,thedailymarketcommentaryisoneofthemostinfluentialtradingnewslettersonthemarket。

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