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In the traditional way of things on Wall Street, firms invest in stocks, bonds, and real estate. Commodities play a certain role, but they are certainly not the focus. Neither are precious metals. After all, who on Wall Street wants to be one of those nutty gold bugs?
Anyone who wants to make money, it turns out.
After years of analyst apathy and active derision by brokers and traders, gold is having the last laugh on Wall Street. The numbers for 2010 are in, and they aren’t pretty. Fringe elements, gold nuts, and precious metals collectors are able to laugh all the way to the bank while brokers get left crying over the bottom line.
Big Misses At the Big Names
Some of the biggest names on Wall Street are having to admit that they made big misjudgments about the markets last year. And they’re having to make those admissions publicly, because the numbers don’t lie. By opting out of participation in the precious metals sector, the average firm’s revenue at the trading desk shrank around forty percent between 2009 and 2010.
Even at firms that like to think of themselves as smart commodities players, the numbers are dismal. J.P. Morgan Chase & Co had been an aggressive commodities participant for the last three years, but they focused more on energy and oil, according to The Wall Street Journal. Those sectors were highly volatile, while gold and silver’s swings still ended higher. As a result of being in the wrong parts of the market, revenue from commodities trading shrank forty three percent in 2010 compared to 2009, notes The Wall Street Journal.
Morgan Stanley, Goldman Sachs, Inc., and even international players like Barclays and Deutsche Bank AG are all reporting shrinking returns. Many are scrambling to make changes to support the other areas of their operations, including the payout of traditionally large bonuses. While they still have revenues coming in from the huge fees that they charge, they are feeling the sting of their poor choices right where it hurts them most – their pockets!
Learn From Their Mistakes
This large and public acknowledgment of having made the wrong plays is painful for the big banks – but likely a spot of glee for many readers. Don’t just revel in the banks’ willful blindness to the value of precious metals – learn from their mistakes. Be smarter than the average Wall Streeter and make sure your own financial house is in order.
Remember, you don’t have to be a Wall Street genius to make smart choices with your money. In fact, since you read the news here at Off The Grid News, chances are you already accept many of the things that the suit-clad smarties don’t want to acknowledge. You know the financial system of fiat currencies propped up by broke governments around the world isn’t sound, and you know better than to trust your future wealth and security to the stock markets.
Living outside the traditional mindset has definite financial advantages. You know the value of tangible wealth. Gold, silver, and other precious metals all represent real money, and in times of crisis they will have a real value that no slip of paper – no matter what’s printed on it – will ever be able to match.
You don’t have to be a market insider to buy gold and silver bullion or collectible coins. You just have to make the choice not to continue to watch your wealth melt away. Following the advice of Wall Street “experts” won’t take you in the right direction, as last year’s commodity trading results proved. Instead of clinging to insider guidance, you just need to follow your gut and use good common sense when building up a precious metals stockpile.
The Wall Streeters got embarrassed last year by gold – and it’s not likely to be the last time it happens. While they were busy mocking gold bugs and metals traders, they were losing money. Learn from their mistakes and make the most of your own good sense: buy gold and other precious metals for that proverbial “rainy day”, and then sit back and enjoy the show as the economy continues down its inevitable road and Wall Street has to come to terms with the wisdom of those nutty gold bugs.
