Another golden trading resource

Do you use Google Trends in your trading?

If you ever follow tips or pieces of news in your trading – this little check can tell you whether you’re on trend, ahead of the trend, behind the trend – or way off the mark!

In fact, it’s one of my favourite little tricks for gauging market sentiment – and for judging just how ahead of the game I really am.

If you’re not familiar with Google Trends, it’s an extension of the Google search engine that allows you to examine who’s searching for what. You can compare different topics, different parts of the world, and see how often your topic appeared in news stories.

And this is how I use it in my trading …

When I hear a piece of news, and I think “not many people know this – I could use it to my advantage.” The first thing I do is key it into Google Trends. More often than not – I’m disappointed. It usually turns out that my “hot piece of information” is on everybody else’s minds too!

But it does mean that I’m now wiser about market sentiment – which could give me the edge over all those other people who aren’t using Google Trends …

It’s rather like having a secret camera on the shoulder of millions of traders around the world. If they’re Googling it – chances are, they’re thinking of trading it.

Gold vs Justin Beiber

A couple of weeks ago, I was having a drink with an old colleague in the City. He brought along a friend of his – this guy is a top market analyst with a young and dynamic hedgefund that I’ve been hearing a lot about recently.

Anyway, this analyst was coming out with some pretty controversial stuff on the subject of gold and the view that his hedgefund was taking on it – I’ll tell you more about that in a moment.

Suffice to say, that I came away with that feeling I was just telling you about – the feeling that I was party to some “hot information” that most traders wouldn’t know about.

Let’s face it – one of the most contentious issues in the markets has to be the price of gold.

In case you’ve been hiding under a stone and have missed the gold hype: its price has surged almost 500 per cent in ten years, making it five times more valuable than it was in 2000, and 13 times more valuable than it was in the 1970s.

Understandably, that kind of growth makes people nervous.

If you type “gold bubble” into Google trends – it shows that in the latter part of this year, more people than ever have been searching this phrase – which would suggest that a lot of people are fearful of the price of gold going “pop”.

Google Trends for “gold bubble”:

Out of interest (and because Google Trends is a bit addictive!) I thought I’d then compare “gold bubble” with “Justin Beiber” – it would seem that gold traders are less active on Google than teenage girls, which really shouldn’t surprise me!

The red line is Mr Beiber’s fans; the blue line is traders worried about a gold bubble …

Teenage heartthrobs aside, there’s undoubtedly a lot of buzz around the price of gold.

Which brings me back to what that hedge-fund analyst was telling me … his firm are currently putting together a special report on where they believe the gold report is heading.

And – this is the exciting bit – I’ve managed to persuade them to let Trader’s Bulletin readers have sight of it.

They are publishing this report next week – so watch out for my update next Friday when I’ll be telling you how you can get hold of your copy.

This kind of information is like gold dust (excuse the pun).

It’s easy to find market pundits bending your ear about whether they think gold will go up or down …

And there are plenty of bulls who are so heavily invested in gold that they’d be crazy to do anything other than talk it up …

This week, for example, we had Aaron Regent, CEO of the world’s top gold producer, Barrick Gold, insisting that gold is not in a bubble and that there’s “lots of room” for further price increases. Well, he would say that, wouldn’t he?

But finding out what the hedgefunds really think – whether they are getting in or getting out – is something quite different.

So keep an eye on your inbox next week for instructions on how to download your special gold hedgefund report.

Another trend to watch

“Ladbrokes claim they were clobbered for £200,000 when the official wedding announcement was confirmed last week and another £140,000 when an April wedding day at Westminster Abbey was booked. The Magic Sign believe they’ve been caught out by a royal mole and are now carefully examining close-circuit footage of a miserable-looking old woman accompanied by two corgis placing a sizeable wager at their Windsor branch.” Daily Mirror

If you failed to clean up on the announcement of the royal wedding, there could still be a chance to profit …

The latest estimate for the consumer spending boost we can expect – through merchandising, food & grocery retailers, and the travel & tourism sector – is £620million.

So which are the shares we should be looking at to cash in here? Some names that should prick up your ears over the coming months are: Portmerion (who bought up Royal Worcester last year); Greene King; Diageo; Enterprise Inns; Whitbread (now a hotel chain, rather than pubs); and Intercontinental Hotels.

Until next week,

Mark Rose

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