Chapter 9

Worshipping the Golden Calf

Too many investors become Gold Bugs and fall in love with their investment. Sometimes it's a great investment, and sometimes it's a sure loser; here's how to tell the difference, when to buy it, and, more important, when not to.

In Chapter 2 I discussed the folly of worshipping the false and deceptive god Mammon. Now I want to persuade you that it is an expensive mistake to worship any investment, but especially the Golden Calf. This is one of the rare times I learned something important by getting it right!

When I first came onto the investing landscape in 1975, I saw nothing but inflation ahead of us for several years at least, and became a vocal advocate for gold and silver as inflation hedges. My best-selling book, How to Prosper During the Coming Bad Years, was the first popular best-seller to alert the public at large to gold and silver as an inflation hedge. Gold subsequently soared to more than $850 an ounce in 1980, up from $120 an ounce in 1975 when I first recommended it. I have been told that because the book sold more than 3 million copies, it was a major factor in creating that spectacular gold and silver bull market and legitimatizing gold and silver as popular mainstream investments.

I thought of gold as an appropriate investment for the times, but I soon found out that for millions of Americans (not to mention Germans, Swiss, etc.) it was a near religion, with its own dogma. Massive investment conferences attended by thousands ...

Get Safely Prosperous or Really Rich: Choosing Your Personal Financial Heaven now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.