What Russell’s doing

Posted by Richard Russell - Dow Theory Letters

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Richard Russell has made his subscribers fortunes. One of the best values anywhere in the financial world at only a $300 subscription to get his DAILY report for a year. HERE to subscribe. Amongst his achievements Richard was in cash before the 2008/2009 Crash and he has been Bullish Gold since below $300

Ed Note: Richard Russell is bullish Silver and holds one of the largest single positions he has held since the 1950’s in the precious metals.

Ed Note: Some perceptive comments from Richard Russells great daily letter, a letter very valuable to a huge number of subscribers. Note the conclusion below:

“Ah, Mr. Obama, there’s that pesky will of the people again. The people of Massachusetts gave President Obama and his socialistic, government-takeover plans what amounted to a boot-kick to the groin. In a shocking upset, a senate seat in Mass. which had literally been “owned” by the Democrats for half a century went to a relatively unknown Republican named Scott Brown. Clearly, the Democratic majority in both houses are in jeopardy, particularly since many disheartened Dems will now retire. Two underlying reasons were responsible for the shocking Democrat defeat — unemployment and a fierce dislike of the Obama administration’s bungling takeover of everything in sight, with emphasis on the puzzling private health system.”

“When life is a puzzle, I like to go back to fundamentals. The most basic of fundamentals (Dow Theory) is that the market runs from extremes of overvaluation (where I believe it is now) to extremes of undervaluation, a place where it has not been since the early 1980s.

And the question is — are we now on the long winding path to extreme undervaluation? I really think that’s what’s happening now. And I ask myself, how does this help us with positioning ourselves for the coming years?

First, if equities are headed (over time) toward undervaluation, I don’t want to be loaded with common stocks. I’m not a trader so holding stocks, even top-grade blue chips, is not the way I want to go.

As for money instruments (bonds, notes, bills), I think as the dollar sinks over time, interest rates (now abnormally low) will head higher. That leaves out bonds as an investment as far as I’m concerned. Besides, if I hold a bond yielding 4%, and over the next year the dollar drops 5%, I’m out money, and I’m out purchasing power.

So where does that leave me? It leaves me holding as much in the way of precious metals (particularly gold) as I’m comfortable with. So half of all my liquid assets are in gold. But I don’t want to put all my liquid assets in gold, because in investing nothing is guaranteed. The other half of my liquid assets I’m going to leave in dollars, because that will give me time to think, and hopefully, over the next six months to a year the situation will clarify.”


The 85 yr. old writes a market comment daily since the internet age began. In recent years, he began strongly advocated buying gold coins in the late 1990’s below $300. His position before the recent crash was cash and gold. There is little in markets he has not seen. Mr. 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. 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.