The Gold/Silver Ratio From 1300 to 1900...And Now

Friday, July 31, 2009

TABLE: If you still have doubts about allocating a little of your portfolio into silver, these historic gold/silver ratios may make you think twice. Table courtesy of John F. Chown's "A History of Money"
Today the gold/silver ratio stands at 67,98 - I hope to have your permission to round it to 1:68.
Now that Markowitz' model of risk-free portfolio diversification has been proven as wrong as did the Black-Scholes option pricing formula I am more than inclined to seek my clues in centuries old relationships.
It can be safely said that markets either overshoot or undershoot, but are never in equilibrium (can any economist write a formula to scientifically prove my common sense assumption!?)
Take your own conclusions. This blog is for informational and entertainment purposes only. For precious advice email me.
DISCLOSURE: long bullion and adding.

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