Less than two months ago, gold somewhat quietly broke the $1400/oz. barrier for the first time since 2013. Last week, the yellow metal broke through $1500 also for the first time since 2013. Again, this happened somewhat quietly because the focus was on the cratering 10-year Treasury yield, earnings season and the recent mini-spate of market volatility.
Where gold stops nobody knows, but the price is being driven by the usual cause: uncertainty. Trade wars, tariffs, weakening currencies, dovish central banks, central bank buying and fear are all pushing prices higher, but it is important for investors to know what gold is, and what it isn't. It is not an "investment," at least in the classic sense, but rather a hedge against uncertainty and a store of value. It generates no yield or earnings, but provides a safe-haven of sorts. If you've never seen what it takes to produce even an ounce, check out the Discovery Channel's Gold Rush series, which shows firsthand the time, money and effort it takes to get gold out of the dirt.
Meanwhile, silver is also on the upswing, breaking the $17/oz. barrier for the first time since early 2018. It is certainly not on the tear that gold is and has a long way to go to breach its recent high of $48.58 from 2011, which was not far off from the 1980 all-time high of $49.45, unless, of course you adjust it for inflation.
Interestingly, the gold/silver ratio (the number of ounces of silver it takes to buy one ounce of gold) closed Friday at just under 93, historically high, and the highest since 1991, when the ratio briefly breached 100. In 2011, the ratio was briefly at about 30.5. Some pundits now discount the measure's usefulness, but if it still has any merit, silver, the "poor-man's gold" appears to be downright cheap.
Shifting gears (pun intended), I loved Jim Cramer's take on Uber (UBER) from last Friday, and the simplicity of his "IDK" stance. Someone recently asked me about the name, and frankly, I am probably the wrong guy to ask about a $68 billion market cap company, that at this point, is not expected to be profitable until 2023.
This name is not cheap and appears to be priced for perfection. What the company has done, however, is quite amazing: marrying an archaic concept of folks using their own cars to taxi strangers with some amazing technology to make it all happen. Just like anything else, if it was cheap enough, I'd buy it, but there is way too much hype -- and as Cramer pointed out, the company is going to have to raise prices to generate a bottom line, and there is another kid in town in the form of Lyft (LYFT) .