Save Yourself From Making This Financial Mistake

DRIGGS, IDAHO – “Two interesting things happened to me today,” someone wrote on Twitter recently.

“Got a haircut. Barber told me to buy gold. Said the Fed is printing too much money.

“Got a tire fixed. Owner of the shop told me to buy silver. Said the Fed is printing too much.”

He didn’t say it, but the implication he’s making is that everyone – even barbers and mechanics – have already bought gold and silver. When there’s no one left to buy, the price must fall…

And with that, I’m starting to feel a growing impulse from my lizard brain.

“Take your profits,” it whispers. But I’m not listening to it this time. More below…

Our Idaho Winter Bolthole

Greetings from Driggs, our winter bolthole…

We’re a modern American nomad family. For the last two-and-a-half years, we’ve lived out of a suitcase and drifted from hotel to hotel, Airbnb to Airbnb, campsite to campsite… never staying in the same place for more than a few days.

It’s been a blast traveling quickly like this. We’ve seen the world… given our kids a fantastic, yet unconventional education… and bonded as a family in a way I hadn’t realized was possible.

But the one thing we’ve been missing is a little community. Sure, we’ve made friends. And we’ve loved seeing so many different places. But we’ve always known that – at some point – we’d have to settle down and find “community.”

Our kids wanted buddies. Kate wanted to meet other homeschoolers. And we wanted to join a church congregation.

So two months ago, we retired the suitcase and the tent, and we came to rest in a small community called the Teton Valley. It’s in eastern Idaho, near the Wyoming state line.

We’re going to stay here until April, and we’re going to experience a little “community life” for a change. Here’s Penny playing with one of the neighborhood kids…

Now, back to our gold story…

The First Time I Found Gold

I found gold in 2002.

I was 26 years old. I was working at Citigroup, which was, at the time, the largest bank in the world.

The world was in turmoil. The bubble in technology stocks had popped two years before… the World Trade Center had just been attacked… energy giant Enron had gone bankrupt… and the U.S. was preparing for war in Iraq…

It was an anxious time.

Meanwhile, I’d found Bill Bonner’s daily e-newsletter. I’d tumbled down a rabbit hole, reading about hard money, Austrian economics, dollar debasement, and gold.

I found a whole community of people talking about unconventional investment ideas… and making dire predictions about the future of American finance…

Gold had been in a bear market for 22 years at that point, and it was trading at its lowest price in 26 years.

If there was ever an unpopular, ignored investment that no one was paying attention to, it was gold in 2002.

And yet, Bill was recommending selling stocks and buying gold. He called it the “Trade of the Decade”…

How I Missed (Most of) the Trade of the Decade

I was utterly convinced by Bill’s (and others’) arguments about getting out of stocks and buying gold. Gold seemed like it had to rise. And I felt like even if I was wrong, I probably wouldn’t lose much money.

So I took all my money and bought gold. First, I bought a portfolio of gold stocks. Then, I opened a trading account and bought highly leveraged gold derivatives.

And finally, I was so excited about the idea, I approached my friends and family and asked them to give me money so I could buy gold for them, too. I ended up with 11 investors.

Over the next nine years, gold rose from $300 an ounce to $1,900 an ounce… a move of over 500%.

Unfortunately, our little gold pool didn’t go along for the ride. When the market started making new multi-year highs, I heard the same whispers I’m hearing now…

“Gold is going to correct,” said the voices. “You’ll lose the profits you’ve made. Better cash out now while you can still show a gain.”

I lost my nerve. I sold everything and returned everyone’s money.

Then, I watched in horror for the next six years as gold continued rising… while I sat on the sidelines and missed out on hundreds of thousands of dollars in profit for me and my investors.

Not Making the Same Mistake This Time

One of my all-time favorite books on speculation is the biography of Jesse Livermore. (It’s called Reminiscences of a Stock Operator by Edwin Lefèvre.)

Jesse Livermore was basically a fearless gambler who had a knack for making (and then losing) huge fortunes in the stock market. His biography documents his approach to speculation.

One piece of advice he repeatedly emphasizes in his anecdotes is “sit still when you’re right.”

“It never was my thinking that made the big money for me. It was always my sitting,” he says.

“Got that? My sitting tight! … Men who can both be right and sit tight are uncommon. I found it’s one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.”

With my first foray into gold, I made the classic amateur mistake of not “sitting still.”

I let my lizard brain – and the seduction of a possible correction (which never came) – talk me out of my position…

I can already feel the same seduction… that gold is overbought, and a correction is coming… beginning to nag me today.

But this time, I’m going to ignore the whispers. I know they’re trying to make me do the wrong thing.

I’m not selling my gold until the Dow-to-Gold ratio falls below 5. In the meantime, nothing will take away my gold position. I’m going down with the ship this time.

– Tom Dyson

P.S. America is at a tipping point from which it may never recover. Saving your retirement and your family is the single best thing you can do right now. How? I explain it all in this urgent video presentation.

Like what you’re reading? Send your thoughts to [email protected].

Today, one reader disapproves of Tom’s take on China, following Tom’s comments that he was “amazed at how advanced China was” after spending two months there last year…

Reader comment: You have to find topics to make your newsletter interesting, it is understandable. Most Americans have no idea what China is like or what Chinese culture is like. Of course, there are many first- and second-generation Chinese who have become Americans and understand China well.

Your editorial on China did not take into account that your family were tourists spending money – American dollars – in China. Essentially, you saw what they wanted you to see, kind of like North Korea. Or in other words, you saw the best bit of China. What you did not see were the millions of people who live in poverty. What you did not experience is what it is like to live in a system where the government determines your future, class, status, rank, and station.

Did I mention, even if you believed China was a nice enough place to live… well guess what? You cannot become a Chinese citizen, participate in Chinese government, or really do anything other than teach English on a visa. I had an English teacher friend who married a Chinese woman and was looking to buy property in China. His family is back in England. And I pretty much have lost touch with him because of the government censorship he was living under while in Beijing.

So brother, you are correct that we need to be wary of China’s rise. Do not in any way glorify China or Chinese society, government, or way of life. If you do, you are wrong!

Meanwhile, others praise the Dyson family’s nomadic lifestyle, and offer skiing tips…

Reader comment: I’ve been following your posts for a while and love your story. More young families would do well to follow suit. I’ve lived in Idaho, Utah, and Wyoming most of my life and have explored every corner of all of it. If you’re so inclined, I would love to visit with you about places you would not want to miss while you are in the area. I don’t think there is any place on Earth like it. You picked a great place to land and learn to ski. Hopefully talk to you soon.

Reader comment: I’m in my 70s so my boarding days are over. Enjoy the powder. Nothing beats carving a foot of fresh, untracked powder.

Reader comment: Skiing – even moderately well – is one of the most exhilarating activities available to us humans. Learning won’t be easy. Your kids will pick it up faster than you. So… take a couple of group lessons. You may feel like you’re progressing. Then again, you might worry that you’re not. Then, voila! You aren’t afraid of speed. You can break when you need to slow down. That may come to you when you’re in the private series. It may not come for days, or even weeks. When it comes, you’ll feel free. It’s worth the work.

Tom’s note: As always, thank you for your messages! We read every note you send us. Please keep your questions and comments coming at [email protected].