This was found in this weekend's Barrons, in an article on gold:
It's true that gold already has doubled since 2001, to about $500 an ounce. But "commodities are an asset class for the first time in history" -- something hedge funds and other investors can no longer ignore, says Barron's Roundtable member Marc Faber, an early bull on gold. "I don't think this is a late-cycle movement," he adds, noting that commodity cycles are typically long -- from 45 to 60 years from peak to peak. The last peak was in 1980, meaning the next one could still be at least 20 years away.
Faber, a Hong Kong-based money manager, points out that in comparison with oil or to the Dow Jones Industrial Average, the price of gold is still relatively low, with about 20 ounces of gold needed to match the level of the index. Typically, gold is considered expensive only when the ratio drops below five. That suggests there's plenty of room for gold to rise, in either a bull or bear market for stocks.
I don't understand what this last part means at all. The ratio of gold to the DJIA?! Given that the Dow Jones' is sort of a bunk index to start with, how can one derive a meaningful ratio, or valuation, based on it's nominal level?
Anyone with any ideas is asked to comment.