A broken clock is right twice a day – and for the True Believers in gold, that clock stayed broken from 2001 through mid-2011. Their favorite commodity was on a historic upswing, and their fervent devotion to the gold investment thesis was rewarded with a 250% gain from 2001 to 2011 as gold climbed from around $550 to (briefly) more than $1900 (Disclaimer: past performance is not necessarily indicative of future results).

We hope for their sake they sold some of that gold when times were good (does a true gold bug ever sell gold?). Since the peak in 2011, gold has fallen nearly -28%. But incredibly, some gold investors have done even worse. One of the most prominent advocates of the yellow metal, John Paulson, has really taken a beating. His Gold Fund is down -54% so far this year after losing -25% in 2012; together, that’s more than a -65% decline. But he’s still hanging on and urging investors to stick with him. He claims there’s still “significant upside” to be had in the gold market.

He had better hope so. Remember, after a -65% decline, it takes a 190% rally just to get back to the high water mark. He has a ways to go. Fortunately, his unwavering confidence in the strength of gold as an investment means that he sees just about anything as a reason for gold prices to rise:

Paulson has been a gold bug for years, arguing that inflation will soar when the Federal Reserve begins to cut back on its quantitative easing program. But the precious metal last month entered bear-market territory for the first time in a dozen years as the Fed’s bond-buying continues unabated.

Wait, inflation is going to soar after the Fed cuts back on QE? Just a few years ago he was saying QE was going to cause double-digit inflation by 2012 – now the inflation is just waiting for QE to end? We’re scratching our heads on that one.

Just file this one away as another reason to be wary of long-only commodity investments.