Gold and Barrons

5/6/06 notes

Gold hypothetical example
Today Tomorrow
1 oz gold $250 $500
1 sh CSCO $25 $50

csco in dollar terms - 50/25 = 2X
csco in gld terms - 1/10 oz -> 1/10 oz - 0% gain

if csco were flat, 1/10 oz -> 1/20 oz - 50% loss

if gold rises x%, stocks rise y%, stock appreciation = (1 + y%)/(1 + x%)

so nominal can go up while real goes down

From 4/24/06 Barrons

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xpresstrade.com - commodity trading

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