I've been bullish on gold in varying degrees since 2001. Since then, the price has quintupled -- from about $250 an ounce to as much as $1,250. Over the same period, stocks show a net loss.

And yet we still hear from some commentators that gold is a bad investment. Not just because it's gone up so much that maybe it's not positioned to go up more. That, at least, I could understand as an argument, though I disagree. I hear over and over that gold is always a bad investment, no matter what, when or why. In a nutshell the argument is: It's just a lump of metal, so why should you invest in it?

Self-evidently this isn't true. It's been one of the best investments you could have made over the last decade, as I just explained. It's also been one of the best investments you could have made this year. Stocks are off for the year, gold is up. In fact gold made all-time highs this year.

Yet plenty of people who are otherwise moderately accomplished investors just don t get it.

Take James Altucher. He's one of these guys -- like me, I suppose -- who pops up online and on CNBC with some frequency offering his latest views on markets and the economy. James is a decently bright guy, at least when it comes to inventing interesting little short-term trading strategies. I once very favorably reviewed his book about that in this column, several years ago. I consider him an acquaintance, if not a friend. But his latest pronouncement on gold, issued from the lofty pedestal of The Wall Street Journal's "financial adviser" blog no less, is so mind-bogglingly wrong I scarcely know where to begin.

For James, gold is "basically a worthless rock that has a net negative return as an investment." His proof? He cherry-picks a couple of time periods in which gold underperformed stocks -- starting with the most unflattering period of all, the one starting from gold's previous all-time highs in January 1980. No mention of how gold's returns have simply obliterated those of stocks over the last decade. Silence on that.

James claims that since 1800, when gold was valued at $20 an ounce, its return has worked out to only 2% a year. He doesn't offer a competing return for stocks on anything else over the same period (perhaps because he doesn t know). And he doesn't mention that over the vast majority of the 210 years since 1800 gold was effectively money, and so should have had a low money-like return. But he does transform that 2% return into the claimed "net negative return" by saying you have to "[s]ubtract out the costs of mining."

I've heard talking heads say some dumb things about investing, but are you kidding me? Surely James knows that in order to invest in gold you don't have to mine it. You simply buy it. Today it costs about $1,200 an ounce. Did I mention that's quintuple the price of 10 years ago?

James goes on to comment on gold's use as an industrial metal. He claims that "silver has the same uses" and yet is cheaper, which is "why the world gold supply keeps going up." He doesn't finish the thought, so presumably it's self-evident to him that it would be wrong to expect rising gold prices in the face of rising supply.

First, gold's industrial uses are the least important factor in gold demand, accounting for about 8% of total demand, according to the World Gold Council.

Second, the supply of gold doesn't increase very rapidly despite the U.K. s Daily Telegraph report this week that a growing number of Americans who can't get a regular job have started prospecting for gold, using some of the same primitive methods as in the California gold rush of 1949. But it's tough work, and there's just not that much gold out there to find. That's why you see infomercials urging you to mail in your unwanted gold (is there such a thing?) for cash.

Put the total supply picture in relation to the total demand picture, and you have about 20% more gold being demanded than is being supplied, again according to the World Gold Council.

James waves that away, explaining the strong demand for gold as being just the pursuit of a "fear metal." Oh yeah? How come in the global banking crisis of 2008, when fear was at its height after the failures of Fannie Mae and Freddie Mac, gold went down, not up? And how come, with fear today surely far less than it was then, gold has just touched all-time highs, up 76% from the low in 2008 when fear was at its worst?

The answer is that gold is an inflation-sensitive investment, and it's high price -- in my opinion -- must be because investors by and large believe there will be a lot of inflation at some point in the future, thanks to all the money and credit creation that has rescued the global economy from the 2008 crisis.

But James just waves that away, too, claiming that "people say gold is an inflation hedge. But so are stocks." Really? Then how come during the great inflation of the 1970s, from the Consumer Price Index's trough in August 1972 at 2.9% to its peak in March 1980 at 14.6%, the total return for the S&P 500 was only 28%? That sounds like a lot, but the CPI grew by 91% over the same period. Some hedge!

Over the same period, gold grew by 728%. Now that's an inflation hedge. And I didn't cheat by measuring the gold gain to the top in January 1980 -- the way James cheated by starting his return calculations there. If I'd played by those rules, I could have claimed that gold grew by 1,171%.

But there's no convincing James. You gotta buy stocks, because "many stocks have dividends." But for James it's not just about the dividends -- he's "not even counting capital gains you get when the stocks go up." Just remember, the S&P 500 has returned a cumulative loss of 14.8% over the last ten years. Including James's precious dividends. That's because stocks don't always go up.

Gold doesn t either. In fact right now it's down about 4% from its recent all-time highs. I have no idea what it's going to do tomorrow or the next day. But I know that inflation around the world is an inevitability -- all the more so for all the talk now about deflation, because that's going to keep the Fed and the rest of the world's central banks pedal-to-metal on their printing presses.

I like stocks here as a short-term speculative play, but not as a long-term inflation hedge. Long-term, gold is where it's at.