you have all or most of your net worth denominated in passive US dollar assets that you are not trading?

i find that hard to believe.

you are a trader with a strong track record so i'm sure you're not net passively long 100% (or close to it) of your net worth your home currency.

am i wrong here? (i.e. you have no foreign equity exposure, no foreign bond exposure etc.)

Barron

The reason this got bumped was because I linked it in Politics as I was whacking one of my own gold threads.

Also, I am a ****** as well. However, I do not have a strong track record. Until a couple days ago, I had never invested in anything riskier than a CD.

I don't follow the distinction you are making between "financials" and "real assets." Are you saying that gold is a real asset, but stock in company that owns a gold mine is a financial?

Anyway, just comparing the risks associated with investing in "financials" with the risks of investing in "real assets" is a dishonest argument unless you also compare the upside, in which case financials have won by a landslide.

I am not anti-gold as I am anti- bad arguments in favor of gold.

You are all over the place on this one. Hyperinflation in Germany and Zimbabwe are only relevant to this discussion if you some evidence to suggest that those scenarios are likely in the US. Has Obama pledged to appoint Robert Mugabe as chairman of the Fed or something?

well since 2000 gold has tripled (not including inflation), and with inflation factored in the dow has lost 5% or whatever, according to this thread.

doesn't take a genius to figure out about where we are on the cycle, re: commodities like wheat, oil, gold, etc., and bank and stock troubles.

gold has a little to no counter party risk and is similar to a cash holding. a gold stock depends not only the price of gold but a whole array of other issues.

gold stocks are not financials per se. financials generally refers to those involved in credit and money markets and financial management.

do tell more, please.

Okay earlier you seemed to imply that all equities were financials.


S&P history adjusted for inflation:



Gold price history adjusted for inflation:



That is what I mean by the upside of equities being much larger than gold historically. And yes I'm aware how the comparison looks if you only look at the past 5 years.

well temporal relations are important so i dont know why you consider that irrelevant. Aside you are comparing two different asset classes so its apples and oranges. those who are good at understanding the industry and management and succeed will likely do much better investing in mining and farming related stocks than the physical commodities but they are two entirely different things.

I own a few ADRs if that counts as diversification.

All I am saying is that one person bought $x worth of gold and another person bought $x worth of diversified equities at time t1, and sold them at t2, where t1<t2 and t1 and t2 are random dates within the past 100 years, the person who bought the equities would have a much higher EV. That's a completely uncontroversial concept, and I only brought it up is because of your comparison of buying gold in 1980 to the risk of 1929. They have both had bad stretches, but one has had much much more profitable good stretches.

Of course they are two different asset classes. All I'm talking about which would have made someone more money in the past.

just a total guess, but I would think most smart people would say gold is good <20% of the time, cycle wise.

but really, the argument is kinda silly, used to gull stupid people into putting their money into mutual funds, saying that historically the stock market, etc. I mean, in 1929 the sellers were saying the same thing to the general public.

fact of the matter, for stupid people gold is much much better, because stocks can get wiped out, sometimes overnight, whereas gold, well I guess you can get physically robbed ...

I'm talking about the S&P 500.

Regardless, just because something can't get "wiped out" doesn't mean it's a better investment. I think most rational people's investment goal is to maximize EV while maintaining an acceptable ROR, as opposed to simply minimizing ROR, which is what you're talking about. I'll take the higher EV with only a .00000001 ROR any day

If you want to argue that gold has a higher EV, then I am all ears, but simply pointing out that it may have a lower chance of "wiped out" doesn't really mean much.

BTW, I think the probability of physical gold getting stolen is much higher than the the probability of the S&P going busto. And if there is some kind of financial armageddon in which the S&P 500 gets wiped out, I wouldn't have much faith in whatever rule of law is left preserving the integrity of gold ETFs or other alternative gold vehicles.

It is not controversial that people can make more money employing the money with some risk for a speculative reward rather than sitting on it.

i dont know what comparison i made about 1980 and the 29 crash that you're referring to but the fact of the matter does remain that certain equity markets can take massive crashes in real terms that wipe out years of "gains" and change the whole picture.

gold has a higher EV right now compared to the major US indices, IMO

Technically I have no disagreement on your position however those that purchase stocks on maximum margins and those that purchase gold futures on maximum margins have drastically different ROR's.

If you just buy bullion and bury it you can't get hurt too badly but buying a gold stock, a gold ETF or a gold future changes the reality.

Jimbo

one of the safest ways to keep cash if necessary to preserve over extended time is to store and get high quality insurance on a basket of physical precious metals, not promises or speculations, into about three or more of the safest countries globally relative to this purpose. Some other scarce consumer commodities can be added to the list if they can be well stored and insured for a period of relevant length and will help insure against some value fluctuations and risks.

Some national currencies that are sound enough can also be added to the mix but i think you're upping the overall risk profile or need for active management even though this may help prevent some fluctuations.

yeah from what I've heard all the paper gold is rampant with fraud or possibly rampant with fraud.

but like 10 pounds of gold is 146*1000=over100k dollars so it's not like a pile of gravel or anything. also we're all familiar with a ten pound dumbell i suppose, but gold is a lot more dense so smaller.

also note that most people would probably be better off paying off their mortgage, rather than using interest rate diffs to invest and stuff, simply because most people are never prepared to take a major or semi-major loss, so by definition they shouldn't be speculating.

Can't believe one of the "gold bugs" hasn't bumped this thread to say they shorted gold at $950. Guess I'll give them a chance here!

Jimbo

i think you better get out of gold, the bubble is bursting

thats the best you got?

They have been awefully quiet of late

so long as it doesnt hit $734 before heading $1k and upwards then im happy

speculation et al will always happen, the john kane's will now be selling, ****ting themselves probably. i am no longer a john kane though, i switching off from all selling and just adding to my funds when my paycheck and other income comes in.

gl

Shorted at $996 on way down. Happy.

Sold EUR at $1.60 on down tick [as I mentioned people should look to do a while ago here] and now very happy.

Wassup?

When gold ran from $418 to $725 in 2005 through May 2006, it took 5 months to find its bottom at $565 before resuming its uptrend.

Recently, gold ran from $645 in 2007 to $1011 in mid-March 2008. It's now 5 months later. Is gold finding its bottom again?

We'll see.