ROCK SPRINGS, WYOMING – In 2018, Kate and I sold all our things and handed back the keys to our apartments in Delray Beach, Florida. We drained our bank and savings accounts and converted everything to gold.
Since then, we’ve traveled all around the world, living out of a suitcase. We drift from town to town, country to country, sleeping wherever, homeschooling our kids wherever.
With COVID lockdowns and quarantines everywhere now, we’re exploring “backroad” America, while we wait for the Dow-to-Gold ratio to fall below 5…
Our Simple Investment Strategy
If you’ve been reading these postcards, you know my strategy for getting rich over the next 20 years 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.
Following the Dow-to-Gold Ratio
To time this trade, we follow the Dow-to-Gold ratio. It tracks the Dow Jones stock index in terms of gold.
This chart tells the whole story…
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Notice how the Dow-to-Gold ratio hit an all-time high in 1999. That was the time to start rotating from stocks to gold.
Notice also how the ratio rebounded in 2011, and then started falling again in late 2018. That’s when we converted our savings into gold.
As I write this, the ratio is around 14.
The next extreme (a low) will happen soon – probably in the next five to 10 years. That’s where the first quadruple comes in… when the Dow-to-Gold ratio falls below 5.
That’ll be the time to rotate from gold to stocks.
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. I invested nearly $1 million of my own money into this strategy. But you don’t have to go “all in” like I did. I put together a special report on how to ride the Dow-to-Gold trend…
It shows you how to build the ideal gold portfolio, with percentage allocations and the gold stocks I recommend today. If you’re a Tom’s Portfolio subscriber, get the portfolio details here. If you’re not signed up yet, watch this…
Like what you’re reading? Send your thoughts to [email protected].
FROM THE MAILBAG
Readers have questions about the logistics of road travel on America’s backroads…
Reader question: Gas, cell service, internet… Are any of them a problem? The pictures you often post of long roads to nowhere, how do you know where the next gas station is? Have you ever gotten nervous about making it? Have you ever run out?
Tom’s response: We keep our tank full. So far, we haven’t had any close calls with gas running out. We only get cell service and free Wi-Fi in some bigger towns. Otherwise, we’re offline. The other commodity we need to buy regularly is ice. So far, we haven’t had any issues finding ice when we need it.
Reader question: Tom… Do you have a way of protecting your loved ones while on the road? Lots of crazies out and about today. Seems like the stopper has been pulled out of the lawlessness bottle. I don’t think it’s going back in any time soon. Please be safe and stay aware of your surroundings. Your family is very precious to many of us.
Tom’s response: At the beginning of the trip we considered carrying a gun but decided against it for various reasons (mostly I didn’t want to deal with all the different state laws.) Then, a reader recommended carrying wasp and hornet spray instead of a gun. It shoots over 20 feet. Will work on bears too. Side note: We haven’t felt insecure or threatened anywhere we’ve been yet.
Meanwhile another reader is interested in Tom’s Dow-to-Gold theory… but disagrees with Tom’s take on “vintage movies”…
Reader comment: Dear Tom, Thank you for your Postcards. As a longtime gold bug myself, I can fully appreciate your position on gold. Although your Dow-to-Gold ratio hypothesis is a new twist for me. I’m sure it will help me time my own unwinding of my gold positions, and I follow your writings with much interest and broad agreement.
However, Tuesday’s update contains something I disagree with so violently that I am compelled to put pen to paper. The Princess Bride CANNOT POSSIBLY be grouped together with Swiss Family Robinson (1960), Around the World in 80 Days (unless you’re talking the Jackie Chan version) and The Adventures of Huckleberry Finn (also 1960) as a “vintage” movie. A “classic,” for sure, but not “vintage.”
That’s because it came a whole generation later – it’s a Gen X movie whereas the others are Boomer movies, and I think I speak for your Gen X readers when I say: None of us want to be associated with the word “vintage” just yet.
Maybe when Dow-to-Gold ratio hits 5, we might be warming up to the idea… or perhaps resigned to the fact. But not right now, please. Thanks, and keep those Postcards coming.
And finally, gratitude for the Postcards…
Reader comment: Hello Dyson family, I have been thoroughly enjoying your postcards since you left Florida. I’ll sometimes spend a few minutes researching more information about the places and stories you have shared. What a fantastic education for your children. Far better than any classroom can provide!
Over the last 40 years or so I have known friends and acquaintances with similar experiences as yours while they have crisscrossed North American while on motor bikes or in a big motorhome with a Range Rover in tow, and everything in between. Maybe one day I can participate in this adventure myself. In the meantime I am grateful to follow yours.
Tom’s note: Thanks for writing in! As always, please keep sending us your questions and comments at [email protected]. We read every note you send us.