Ed Note: The Godfather of newsletter writers, Richard Russell, had some absolutely extraordinary thoughts about life, the markets and gold. Here is what Russell had to say: “Most of the people in the world suffer from fear, anxiety, anger, guilt, bitterness, resentment, sorrow, depression, and various other emotions which can mar their lives. The majority of these emotions are holdovers from damaged or traumatic infancies.”
“I was brought up in the early 1920s. In those days parents were taught by doctors to feed infants by the clock, not when the infant was famished and screaming with hunger. In those days, infants were not tended and comforted when they needed warmth and attention. They were often tended by nurses and allowed to “cry themselves out,” thus leaving parents with plenty of free time of their own.
I had damaged parents, which affected me very negatively. My mother’s mother died in childbirth when my mom was two years old. So my mom grew up without a mother, and as a result, she knew nothing about mothering. My father’s father (my grandfather) committed suicide when my dad was 8 years old. As a result, my poor father was anxious, fearful, and nervous all his life.
Unfortunately, I absorbed the fears and anxieties of my parents, who had done the best they could, based on what they knew at the time. I grew up during the Depression, believing or feeling that the world was a harsh and unsafe place. As a result, I think I developed an extreme sensitivity to danger in the world and in the stock market. Interestingly, I think I kept my subscribers OUT of every bear market since the 1950s.
Let me go a bit further into my family history. My grandfather owned the biggest jewelry store in Charleston. He killed himself when he lost all his money in the awful panic of late 1902.
My dad’s half-brother (my uncle Irving) jumped out of the window of a New York hotel when the stock market crashed in 1929. Irving had a lot of stock in the family-owned City Stores. Irv was a playboy, and he lived entirely off his dividends. When City Stores cut its dividend in 1929, it was too much for Irving — so he killed himself.
With that sordid history, it’s kind of ironic that I ended up writing about the stock market. Strange, indeed, or is it?
December gold closed yesterday at 1770.60. If I was in GLD, I’d be fretting. But if I was solely in bullion coins, I wouldn’t give gold’s action a second thought. The reason I say this is because buying GLD is a trade, and holding gold coins is a move that theoretically is forever. For instance, if I had GLD, at some point I’d sell it, and hopefully show a profit.
But I don’t know when I’d ever sell the bullion coins. Sell them for what? For Fed-created fiat paper? Actually, I’d probably gift the coins to my kids, on the basis that it would be an easy transfer of wealth, much as some women gift their diamond engagement rings to their daughters.
Below is the US dollar as per yesterday’s close. The dollar has broken below both MAs, and is sitting on support, which is around 78 3/4. RSI shows the dollar over-sold, but MACD allows for a further decline. Thank the Fed’s massive money-creation project for this chart, but what the heck, a cheaper dollar helps our exports.
But a cheaper dollar is also inflationary. Marc Faber states that the Fed is destroying the world with its wild printing, and I can tell you that Mr. Faber is really angry.
Awhile back, the “surest” way to make money was to short the Euro. When too many traders get on one side of an item (in this case, the short side), this is what can happen. A strong Euro means a weak dollar, and a weak dollar translates into higher gold. But we must be careful, because the Euro is in the overbought zone of RSI, and a lot of its strength may be coming from short covering.
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Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Through Barron’s and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.
The Letters, published every three weeks, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics –plus Russell’s widely-followed comments and observations and stock market philosophy.
In 1989 Russell took over Julian Snyder’s well-known advisory service, “International Moneyline”, a service which Mr. Synder ran from Switzerland. Then, in 1998 Russell took over the Zweig Forecast from famed market analyst, Martin Zweig. Russell has written articles and been quoted in such publications as Bloomberg magazine, Barron’s, Time, Newsweek, Money Magazine, the Wall Street Journal, the New York Times, Reuters, and others. Subscribers to Dow Theory Letters number over 12,000, hailing from all 50 states and dozens of overseas counties.
A native New Yorker (born in 1924) Russell has lived through depressions and booms, through good times and bad, through war and peace. He was educated at Rutgers and received his BA at NYU. Russell flew as a combat bombardier on B-25 Mitchell Bombers with the 12th Air Force during World War II.
One of the favorite features of the Letter is Russell’s daily Primary Trend Index (PTI), which is a proprietary index which has been included in the Letters since 1971. The PTI has been an amazingly accurate and useful guide to the trend of the market, and it often actually differs with Russell’s opinions. But Russell always defers to his PTI. Says Russell, “The PTI is a lot smarter than I am. It’s a great ego-deflator, as far as I’m concerned, and I’ve learned never to fight it.”
Letters are published and mailed every three weeks. We offer a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $300, tax deductible if ordered through your business).
IMPORTANT: As an added plus for subscribers, the latest Primary Trend Index (PTI) figure for the day will be posted on our web site — posting will take place a few hours after the close of the market. Also included will be Russell’s comments and observations on the day’s action along with critical market data. Each subscriber will be issued a private user name and password for entrance to the members area of the website.
Investors Intelligence is the organization that monitors almost ALL market letters and then releases their widely-followed “percentage of bullish or bearish advisory services.” This is what Investors Intelligence says about Richard Russell’s Dow Theory Letters: “Richard Russell is by far the most interesting writer of all the services we get.” Feb. 19, 1999.
Below are two of the most widely read articles published by Dow Theory Letters over the past 40 years. Request for these pieces have been received from dozens of organizations. Click on the titles to read the articles.
“Rich Man, Poor Man (The Power of Compounding)“
