Reply #30: Why Gold Stocks Will Rise

[54anickel]

http://www.thestreet.com/_more/markets/metals/10268399.html

I'm breathing a sigh of relief at the selloff in energy and gold stocks. In the last few weeks, enthusiasm for the two sectors had risen to such a level that I couldn't find anybody with anything bad to say about these stocks. Everyone wanted to buy. And frankly, that had me worried.

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Bring On the Unconverted

But the simple truth is that stocks go up when doubting investors are converted into buyers. If everyone is a believer, there isn't a reservoir of potential buyers ready to increase demand for shares. You make more money investing in the trend when at least a sizable minority of investors doubts the trend -- or worries that it's about to come to an end -- and resists buying into the trend even while other investors are making money.

As long as the fundamental trend is intact -- and I believe it is in the energy and gold sectors -- I'm happy to see signs of skepticism. And I get positively giddy when I see a story like Commodity Bubble's Burst Is Good for Stocks from TheStreet.com.

Bring me your worriers, your doubters, your shorts with a need to cover. In today's column, I'm going to take a look at the trend ahead for gold stocks.

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