Dennis Gartman Reveals Why he Just Sold Gold

Gartman Letter founder recounts his Joe Kennedy moment...

EPIPHANIES can be had in the strangest places. For Dennis Gartman, a ride in a New York City taxi helped push him to sell half his position in gold, hours before the US downgrade by Standard & Poor's and days before historic volatility would rattle financial markets worldwide, writes Drew Voros of Hard Assets Investor.

When Gartman announced to the world through his newsletter, The Gartman Letter, on Aug. 5 that he had sold half his position in gold, it was the first of many market-moving headlines of the day, capped by news that S&P had downgraded US Treasurys.

On Monday, Gartman talked about the move and how he employed the same rational Joseph Kennedy did when he sold his stocks in 1929 before "The Crash."

"A cab driver told me he had sold all of his stocks and he was buying gold. I thought, 'My God,' it reminded me of when Joseph Kennedy said he got out of the stock market in 1929, when his boot black began touting stocks to him," Gartman said Monday morning.

The cabbie was another sign that the general public had jumped on the gold bandwagon, and it was time for him to jump off.

"What motivated me to do it? Oh, a number of things, not the least of which was the number of commercials on television extolling the virtues of buying gold. When there are TV commercials touting metal detectors as a means to find gold, I thought that was hysterical," Gartman said.

His only regret about the move was that he didn't wait 24 hours, since the S&P downgrade would come later that day, pushing gold to a new record before it began retreating from its new heights last week.

"Clearly I wish I had waited 24 hours. A lot of people thought that was very funny, that I would sell my gold on a Friday and then the downgrade would come and gold would move up $40 Dollars [an ounce]. You know what? That didn't bother me even slightly," he said.

Despite the divesture, Gartman remain bullish.

"I made it clear. I don't think this bull market in gold is over. But I think $100 or $150 break is very likely, because the public is just aggressively involved. And that I find disconcerting," said Gartman.

But when it comes to shorting the Dollar, Gartman thinks investors are walking a minefield.

"One has to be careful. Short the Dollar against what? If you're shorting the Dollar against the Euro, it's probably not such a good idea. If you're shorting the Dollar against the Canadian Dollar, it's a terrible idea," he said.

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