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Tell Me, Which Asset Class Would YOU Rather Own?
Occasionally
I see an article written by some Guru claiming that Gold has no real investment
value. They usually use points such as the fact that Gold has no cash flow or
you can’t use Gold to buy goods or whatever.
All of this
stuff is outright moronic. Sure Gold doesn’t have cash flow… but then again
Gold also:
§ Doesn’t
engage in accounting fraud.
§ Doesn’t
miss quarterly earnings.
§ Isn’t
affected by Obama’s health care.
§ Doesn’t
lie about its real balance sheet problems.
§ Doesn’t
lose market share due to stupid management practices.
§ Doesn’t
perform stupid mergers or acquisitions.
§ Doesn’t
waste money on buybacks.
§ Doesn’t
lose profit margins to rising commodity costs.
§ Doesn’t
go out of business.
§ Doesn’t
have custodial risk (if you keep your bullion yourself).
§ Doesn’t
pay itself ridiculous salaries and bonuses rather than increasing shareholder
returns.
§ Doesn’t
require a bailout or stimulus to stay in business.
§ Doesn’t
commit insider trading or use Government policies to keep itself a billionaire.
§ Isn’t
impacted by a slow down in the economy or consumer spending.
On top of
this, when you buy Gold you:
§ Don’t
get front-run by High Frequency Trading Programs.
§ Don’t
get front-run by its in-house trading team.
§ Aren’t
buying something that can be printed/ devalued.
§ Aren’t
supporting the Big Banks.
As for the
“you can’t buy assets with Gold” argument, this is a stupid double standard.
You can’t buy food or anything else with stocks or bonds either. True, right
now you can’t buy food or services with Gold. But will it always remain that
way? Who knows? Are you NOT supposed to invest in something because you can’t
take it to the supermarket?
Bottomline:
Gold offers MANY advantages that neither stocks nor bonds can hold a candle to,
especially in today’s environment of rampant fraud and corruption.
This is not
to say I completely against owning stocks. Some companies are truly incredible
investment opportunities. But blanket statements regarding entire asset class
based on one or two random rules is simply idiotic. Especially when you’re
talking about an asset that has risen over 400% in the last ten years.
How much
have stocks or bonds rallied during that time?
Good
Investing!
Graham Summers
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Simple question: suppose you were one of those pensioners who in 1979-1980 listened to the gold bugs and 'invested' into gold. (or 'money' as you called it):
http://seekingalpha.com/article/167512-gold-s-real-inflation-adjusted-hi...
When would you have sold? In the 1990s, at $300-$400, for a loss of 90%+?
Or would you have kept your 'investment' in gold until today and sold at a 75% loss?
Or would you still be waiting, for gold to hit $7150 to get out break-even?
Or if you don't ever intend to sell or use it, why bother? :-)
Here's one for ya.
I needed a trailer for a hunting camp. One of those gold eagles you talk about bought in 1972 bought a 20,000 trailer straight up.
Nice return I'd say wouldn't you
How about those who bought gold not in 1972 but in 1979/80 at $7150 (in today's dollars)?
They are living in a trailer park I guess.
you trade? Really? do you make any money?
Because, jesus, how could you have missed the chart action in gold and silver? but even if you didn't do the charts< my god....
do you read? are you aware of what's actually happening with the physical supply?
you really should talk or offer "advice" about something you clearly haven't taken much time to understand beyond Gartman's usual crap about the old thirty year gold high.....that's CNBC nonsense designed to keep the peasantry out of the marketplace in light of JPM hanging out on the silver ledge by its fingernails....
i feel for you man. you clearly are out of your depth on this one......and you got aced out of a great buy over the past year by the people you are listening to.....
And if you bought it ten years ago you have done very well. What's your point? There was a time to buy Nortel / Enron / xyz and a time to sell it. Same with gold. Do you own any, and if so, why?
He's going to time everything to perfection like Julia Childs.
Everyone knows Gold is a bubble. But so is everything else, and by 100x easily.
Gold will eventually be much lower, but first we have to switch from a monetary system, which of course is predicated on throwing Uncle Ben and the fed out, which of course means throwing out all wall streeters from Tea Party to regular ol Republican Party, to Democrats...especially NerObama, and of course non-partisan monetarists. Glass-Steagall, Fixed Exchange rates, etc, etc.
All of these things will send gold down to shit, 32 an oz? It sure could be.
But we're not there are we. We have Uncle Ben, and he's damn sure he'll print until we have 1 million an oz.
I can see 1 million an oz and 32 an oz. I can see that if we do things either right or wrong. I think we can get there both ways. Except the wrong way is because after the hyperinflation, everything crashes until 32 an oz or something like that.
But of course that doesn't mean society is the same at either 32 an oz. One way is the right way, the other way is like Armegeddon. Both can achieve the same number. Everything else will be different, but that number can be achieved many ways.
Surprisingly few of the gold proponents are willing to admit that simple observation though :-)
Including the author of the article I replied to. So I thought it's worth pointing out again.
My point is very simple, which point was not mentioned anywhere in this article: to be very, very careful with an instrument that is at multi-decade highs.
Especially if the instrument has no significant productive use. (unlike, for example, silver - which has significant industrial uses.)
Do not treat buying gold as an investment but for what it really is: a risky act of speculation.
You might make a killing, it might just be starting up. Or you might lose a ton of money.
laughing outloud. You have missed the run at every turn, haven't you?
well, guess what? the dollar ship is sinking....and you are telling people they should be careful picking up a life jacket.
you should just close your eyes and get onboard before you have to pay 2K per ounce to save what you've got left.
I certainly missed the 'opportunity' at $7150 [inflation-adjusted] :-)
But yeah, just buy, buy, buy - the price of gold can never go down, right? :-)
love how you do your numbers....
why do you assume that every gold holder is a complete moron?
of course gold can go down....
and it will if over the next couple of days the dollar stages a miracle recovery.....
but looking at the dollar chart, that seems more and more unlikely.....
You are the one that needs to start understanding that our currency is its death throes.....
and you need to grasp that the dollar is not forever......
but, i'm just a fool....the dollar will never die right? and if it does, its replacement will appear instanteously so that you will never even have to think about where your wealth should be positioned.
Well, it wasn't really hard to come to that conclusion: I read these threads and extrapolate :-)
That was all I wanted to point out - that gold can go down, and can go down significantly and can stay there for years or decades.
This important piece of information was missing from this article, miraculously :-)
"That was all I wanted to point out - that gold can go down, and can go down significantly and can stay there for years or decades."
you mean like the NASDAQ?
like my sister-in-law who held a .COM bubble stock all the way from $110/share to $5/share waiting for it to come back?
only about 3% of the people that invest in any given category actually make money - the other 97% lose - it is obvious which percentage you will be in relative to gold
i think you've made it very clear here that you've mistimed this at every turn.
good for you.
hope your stocks and US bonds keep you warm.
me, i'm just gonna sit here with my gold and silver .....
feelin' jes' fine.
Mistimed what?
You chose "More Critical Thinking Wanted" as your username.
I think "More Critical Thinking Wanting" would have been more apropos.
Your arguments are novice.
But this is what makes a market.
Some will buy, some will sell and some will do nothing but write about it.
actually at this moment, its nice to see that Gartman and Prechter still have their followers, and that people will believe them.
i mean, there's got to be someone willing to go down on the dollar ship.
laughable response. please. how many of us are holding from thirty years ago....you might as well talk about who still has AMZN from the IPO.
utter nonsense.
and i started buying gold on the day Bernanke was nominated for his position, back in the Bushie days. You see, i went to school with Bennie Boy....
and he's the kinda guy who is going to take this country and its economy and its money down in a bruce willis like explosive tsunami of hellfire before he admits he was wrong, or, god help us,
made a mistake.
make NO mistake about that.
I will stick with the hard stuff, thanks
Simple question: suppose you were one of those pensioners who in 1979-1980 'invested' into gold.
When would you have sold? In the 1990s, at $300-$400, for a loss of 90%+?
Or would you have kept your 'investment' in gold until today and sold at a 75% loss?
Or are you still waiting, for gold to hit $7150 to get out break-even?
To: Morecritical.....
Your argument can be made about ANY asset class!
What if I happen to buy at the absolute high and then sell at the absolute low.
Come on - you can do better then that!
Not really - some asset classes have much smoother P&L curves, especially for people who might need that money anytime.
For example, can you give me any date in the past at which point someone buying TIPS would be facing similarly bad drawdown today?
(My positions are TIPS neutral so I have no skin in the game.)
Johnny Bravo aka Master Bates is back. But you're not nearly so much fun. Your arguments are about the same however. Why? Because the arguments are about 200 years old and there are no new ones. Oh, Johnny, where ha' ye beene?
With every word you prove to readers just how little attention you should be paid!
Nice tits.
Jez TCT, they're store bought!!!
ah, but i'm not....and i started buying gold silver in 2004, and i'm looking at solid triples now....and have missed out entirely on the drop in the dollar....
so sad, sorry i am missing that party.....
and stocks...somehow the flash crash and this latest climb into insanity, i'm missing that too....geez....what a shame....
and something tells me when this all explodes, i'll be off on the sidelines again....
what a shame.
you've missed the gold/silver run at every turn, haven't you?
what, were you waiting for the magical 1280 to buy now? or were you one of the folks sure it was going back to 1k?
Prechter will get you every time.
Obviously it was a good idea to buy gold at $500 and it was a stupid idea to buy gold at $5000.
So just to see whether you really mean what you preach, at $1364 and the dollar index at 78.1 today, would you buy, sell or hold gold? :-)
(I expect the cricket chirp, as usual)