What Lindsay Lohan Can Teach Us About the Gold Market

by JDH on March 13, 2010

I have many things to discuss this week (the economy, gold, etc., etc.), but first, let’s start with the really important, big news of the week. You will all no doubt recall my glowing review of that classic E-trade commercial that first aired during the Superbowl. It’s one of my favorite commercials of all time, which is why I discussed it back on February 13 in my post on Portfolio Diversification – The Funny Way. You know the commercial; it’s the one where two CGI’d babies have a webchat about a missed date the night before.

The boy says he was busy working on his portfolio. The suspicious girl wonders, “And that milkaholic Lindsay wasn’t over?”

“Lindsay?” the boy says, with a faraway, guilty look in his eye.

Then, the punch line: another baby girl, presumably Lindsay, enters the picture and says “Milk-a-what?”

I think it’s hilarious.

But wait, there’s more! Someone named Lindsay Lohan (I assume she’s a movie star, or a singer, or something), is now suing ETrade for $100 million for using her likeness in the ad without her permission! This is classic! Apparently the name “Lindsay” is now like “Cher” or “Madonna” or “JDH”; it’s a one word name identified only with that person.

Apparently notes from the ad agency that created the ad have been found, and

The notes also show a variety of bizarre references to the character, which were not used in the promo, with words including “gutter hound,” “skanky cake,” “fish face” and “saddlebags” listed on the page as substitutes for “milkaholic.”

Lohan’s mother Dina has seen the page, and told the newspaper of her displeasure. She says, “We think it’s obvious. (The notes are) horrific. This just proves our point. Oh my goodness, I can’t even read this, it’s so disgusting.”

Yes, if I was a proud mother, and someone said the words “gutter hound” or “skanky cake”, I would immediately think of my daughter!

(For the record, I have two sons, no daughters, so I have no idea what I’m talking about, but stay with me).

The capper is that the kid who plays the boy in the commercial is actually a cute little toddler from Oakville, Ontario. He’s quite the actor, apparently. (Well, he’s a better actor than Ms. Lohan. And he has a better sense of humour).

And why is it that everyone born on July 2 is crazy? Check out these examples:

  • Lindsay Lohan
  • Jerry Hall, the former Mrs. Mick Jagger
  • Imedla Marcos
  • Jose Canseco, baseball steroid guy
  • Valentinian III, Roman emperor, from 425-55
  • JDH

I rest my case.

I know, I know. You are sitting there, starting at your computer, saying “JDH, why did you just waste 432 words discussing some lawsuit filed by some skanky, fish-faced gutter hound who happens to apparently appear in your favorite commercial, and who happens to share your same birth date? What gives?”

Because, my friends, that’s what the world is like here in 2010. The government has created more debt than can ever be repaid, so a hyperinflation or currency crisis is inevitable, we have soldiers dying in un-winnable wars, apparently rational people still follow the teachings of John Maynard Keynes, foreclosures are at record highs as people lose their homes, massive protests threaten to destroy Greece, and yet the top news stories of the week are drivel like:

The only interesting story I read this week, other than the Lindsay and E-Trade stuff, was a story about Pi-Day on March 14 (the number 3.14….., not the food). But I digress.

So, enough about nothing. Let’s talk about the markets (which unfortunately will be more talk about nothing this week). The S&P 500 was up .99%, the Dow .55%. Spot gold dropped about $20 this week.

And yes, you can thank me, or yell at me, for the drop in gold this week. Last week, in my post titled: “This is clearly not a normal recovery – the implications for deflation and gold“, I said:

It would appear that the short term correction that started at the beginning of December has ended…

So, this week, I gradually added to my gold holdings on dips, and I continue to leave my stink bids in place to buy more on any weakness. If the price is going up, it makes sense to be invested. However, I am still maintaining a large cash position, as protection against market weakness.

Well, I guess my limited buying was enough to drive the price of gold down. My apologies. What’s next?

If you look at gold over the last five years (click the chart to enlarge), in the period immediately after “Pi-Day” (picked for no other reason than that’s where we are now), gold re-acted as follows (see the blue arrows in the chart):

  • 2005 – down
  • 2006 – up
  • 2007 – up
  • 2008 – down (Pi-Day was a major top, not taken out again until September 2009)
  • 2009 – down (still below the 2008 peak)
  • 2010 ?

Has the peak happened, like in 2008 and 2009? Or not? The green lines in the chart would appear to indicate that September is a better time to buy gold than March. But of course past history never repeats itself exactly. All I know is that my purchases a week ago were at high prices than gold is at now. That’s just the way it is. Nobody’s timing is perfect; sometimes you have to just roll with the punches.

By the way, message to Lindsay: roll with the punches. Your lawsuit has given E-Trade millions of dollars in free publicity, and no doubt millions more You Tube views of my favorite commercial. Do you really think you were harmed by it? Or will you realize that you are harming yourself more with a silly lawsuit.

What can Lindsay Lohan teach us about the gold market? Other than learning to roll with the punches, nothing. I hope I don’t get sued for using her name in the title this week.

I’ll roll with the punches on gold, and if it continues to correct, I’ll continue to increase my holdings.

Gotta run. I have to figure out how to set all of my clocks forward an hour.

Thanks, and have a good week.

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