Gold Market Speculation

NYC - Financial District: NYSE - Gold Market Speculation

Definition of speculation

  1. :  an act or instance of speculating: such as

    a :  assumption of unusual business risk in hopes of obtaining commensurate gain

    b :  a transaction involving such speculation

Market Mavens

The Fixed System (option trading service) offered is as follows.

All securities and cash stay with your broker or bank. We provide you with buy and sell orders. The client transmits these orders to his bank or broker for execution. Our fee is twenty-five percent of profits in excess of fifteen percent per annum.

Q: What is the Fixed System?
A: The Fixed System is the application of economic law in a manner consistent with the scientific method to profit from price changes.

Q: What do you mean by scientific method?
A: Using observation to establish facts and then logic to reach useful conclusions that follow from the factually correct premises.

Q: What do you mean by economic law?
A: A useful description of human action related to economic activity. See Human Action by Ludwig von Mises and Man, Economy, and State by Murray Rothbard.

Q: Where do I begin if I want information about how to apply economic law?
A: Start with The Art of Speculation during Civil War — Sun Tzu Meets Jesse Livermore.

Q: These three books amount to over 2,000 pages and the material is sometimes difficult. Do I need to understand all of it before I can use the Fixed System?
A: No, but you’ll get better results if you do. If you want to base your speculation on facts and not falsehoods, on valid conclusions and not fallacious reasoning, then read and study these three books.

Q: Which of the three should I read first?
A: Start with the Q&A in Sun Tzu Meets Jesse Livermore (Appendix A). Then read the entire book, then Mises, and then Rothbard.

Q: I understand that all value is subjective and that in a market economy, the current price will be bid up to the expectation of future price less cost of carry. The same process occurs in reverse when market participants expect the future price to be lower. You use four criteria to measure this and to call the low in the gold market:

  1. a break to the downside in the general securities market
  2. extremely negative sentiment indicators
  3. ending wave pattern
  4. specialist short covering

Is all of this part of the Fixed System?

A: Yes. That all value is subjective is a fundamental law of economics. The system is fixed, constant, because economic law and facts are fixed, constant. You can ignore the facts and law, but you will still be subject to them and suffer the results of ignorance. Economic law is just as binding as the law of gravity.

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Photo credit: wallyg via Visual hunt / CC BY-NC-ND