Get Out of Stocks and Into Gold

A CABIN IN THE WOODS, MINNESOTA – “You can’t come to Minnesota during the summer and not go fishing on a Minnesota lake,” people told us.

“There’s nothing like it in the world.”

So we hired the best fishing guide in the county, and he took the boys and me out on his boat…

Going Fishing

Greetings from a cabin in the woods in Minnesota.

We’re taking a week off from traveling to recharge our batteries and catch our breath.

We’ve been traveling hard… never staying in the same place for more than a couple of nights… covering thousands of miles on the roads… and sleeping in a tent.

Here at the cabin, we read, we go for walks, we swim in the lake, we jump on the trampoline, and we do our work.

Today, we went fishing on the lakes with Ross, the guide we hired…

We were fishing for walleye. We’d heard that it’s delicious when deep fried in breadcrumbs and served with vegetables.

“We’d like to have a fish fry tomorrow,” we told Ross.

“I’ll do my best,” he said.

We got into Ross’s boat. Over the next several hours, we visited five or six of Ross’s secret spots on the lake. Nothing was biting. It was getting dark.

Then, Ross took us to a different lake. And to more secret spots.

This time, we found success. We hooked five walleyes in 30 minutes. The boys both caught one. Ross caught the other three.

 

 

Our Simple Investment Strategy

Turning over to the markets, let me tell you about my strategy for getting rich with public investments over the next 20 years…

If you’ve been reading these postcards, you know my strategy is simple.

First, buy the stocks of the best dividend-raising companies in the world when everyone else is selling them. (This happens once every decade or two.) Then wait.

Do nothing. Read some books. Start a new hobby. Go fishing.

Then, when everyone’s euphoric and buying stocks, sell. And turn it all into gold. (This also happens once every decade or two.) Then wait.

Do nothing. Read some books. Start a new hobby. Go fishing.

Now is one of those rare times when you want to be out of stocks and in gold.

That’s why Kate and I sold it all and turned everything into gold in the fall of 2018. Stocks were extremely overvalued.

Now we’re just waiting for the moment when everyone hates stocks and wants to sell.

I conservatively expect to quadruple our money over the next decade. And then quadruple it again over the following 10 years. A 16x return.

To time this trade, we follow the Dow-to-Gold ratio. It’s the ratio between the Dow Jones stock index and the gold price per ounce.

The Dow-to-Gold ratio hit an all-time high of 44 in 1999. That was the time to start rotating from stocks to gold. As I write this, the ratio is around 14.5. Take a look…

The next extreme (a low) will occur soon – probably in the next five to 10 years. And that will be the time to rotate from gold to stocks.

Going back to our simple strategy…

The first quadruple comes when the Dow-to-Gold ratio falls below 5. (That’s the ratio’s “rendezvous with destiny,” as Bill Bonner calls it.)

The second quadruple comes from buying the world’s best dividend-raising stocks at low valuations… and then compounding growing dividends for another 10 years.

In the meantime, I’m going fishing.

– Tom Dyson

P.S. Ross was so protective of his spots. At one point, a boat was coming past as we were pulling a fish out of the water. “Cover the fish!” he yelled. “I don’t want them to see.”

Praise for the Postcards and the Dyson family videos…

Reader comment: I’m enjoying watching your family’s travels. Your kids are adorable, and very bright. I must say I am a huge fan of Penny and her raising her hand when she wants to talk. It’s great that you will have these videos to treasure. Safe travels!

Reader comment: Tom and Kate and family, super enjoyed your family chat from gorgeous Washburn, Wisconsin.

Reader comment: Your kids are gorgeous. I am now 85 years old and have no young kids anymore. My wife is Chinese, from Singapore. We had an old campervan and used to travel round Australia every year for three months. A bit like you are doing; we stopped where we liked it.

Now my walking is quite bad. I had a couple of operations, so my camping days are finished. However, I love your videos. Penny is so enthusiastic and lovely. Keep it up, please. Lots of love.

Tom’s note: Thanks for all the kind messages! Please keep them coming, along with your questions, at [email protected]. I read them to Kate and the kids every day.