Gold may decline 50% before the World Cup is over - Eric Janszen

[BlackVoid]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Elliot Wave - ROFL

The most prominent EW analyst (Prechter) is wrong about gold since 2001. EW is useless.

[RTQ]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

In addition to the country holdings of gold, the holdings by various funds (such a the Canadian Gold Trust and various ETFs) is truly amazing, approaching the scale of some of the countries in the middle of the bar chart in the article, so there is certainly a lot of demand these days for gold.

[c1ue]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

There is one other currency not on this table today; stock.

For want of a better hedge; why not new stock in new start up companies, where instead of acting on the possibility of an increase in asset value, the investment is made on the expectation of regular dividends?

In which case, the best place to put the value, once the trend in Gold tops, is surely new investment, not any form of currency?

Chris,

Actually I agree, but not with the term stock. I believe that this is an ideal period to try and build a new business - at least one with some type of pricing power. It is as good a use for existing cash and anything else. It is what I am doing now - after having prepared the hidey holes in a couple other nations.

But I won't use the word stock, because the stock market and all its participants are one gigantic casino using marked cards and 'Casablanca' style roulette wheels.

And of course the corollary of investing into building a new business: tremendous risk.

The business I am building has as bulletproof a business model as I can think of, yet I consider my chances of achieving my goal as likely no better than 30%.

But that 30% represents an income stream of $6M/year; well worth the $100K plus 1+ years of time I am putting in - and the upside is getting bought out for high 7 or 8 figures.

Conversely, this type of investment is both difficult to find - without being the actual entrepreneur - as well as not ideal for someone seeking income from their money - unless there is truly a large enough amount to spread the risk around to a dozen or more similar opportunities.

[raja]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

For those looking to buy gold in the near term, what do you think about the assertion that, if the stock market crashes, investors will be forced to sell their gold in order to raise cash. So, gold prices would go down for a while.

I agree that the gold price seems almost certain to continue it's rise over the long run . . . but if the market takes its double dip, it seems possible that gold would also take a hit . . . and create a good buying opportunity . . . . .

Better to wait and buy after the crash?

[EJ]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

There is one other currency not on this table today; stock.

For want of a better hedge; why not new stock in new start up companies, where instead of acting on the possibility of an increase in asset value, the investment is made on the expectation of regular dividends?

In which case, the best place to put the value, once the trend in Gold tops, is surely new investment, not any form of currency?

Chris,

If by stock you mean stock in private companies, I entirely agree. As I told subscribers six months ago when I set out to look for alternatives to diversify out of our nearly 10 year old gold and Treasury bond portfolio, the only under-priced asset I could find is entrepreneurs. The value of entrepreneurs has been beaten down by two successive busts over our gold and Treasury hold period. In the wake of the recession, despite talk of recovery, early stage companies are not getting funded at any price that two years ago would have been. The severe reduction in the stream of new start-ups coming on line has grave implications for the U.S. economy. In March, I conveyed my concern in an Investor's Business Daily article.

I spent many hours talking to fund managers and regulators to find a way to put iTulip subscribers who are potential start-up investors together with those who are entrepreneurs in some kind of fund, but the regulatory hurdles are insurmountable. Blue Sky laws make it impossible for any but high net worth households to invest in private companies. Regulators are perfectly glad to allow anyone to invest in poorly regulated public FIRE Economy industry companies and take tremendous losses as a result, but assume that the average person's judgement is not sufficient to determine the risk of investing in a fund that invests in early stage companies, the lifeblood of our economy.

I haven't given up on my investigations. However, continuing my now 12 year old project to manage my own account in public as a way to give an alternative perspective to the din of stocks and houses Wall Street media sales pitches that passes for business news in the U.S. is vastly complicated by the fact that I am moving into asset classes that are inaccessible to the average reader. This may force a decision to move to a subscription-only business model and the elimination of the free area of iTulip.com. That decision has not been made but is under consideration.

Out of those investigations of start-ups came two investments that I made this week that I will share with readers in time when it's appropriate. I recently sold some, not a lot, of gold to diversify into one of these two start-ups. The other I invested in out of a "cash" account (liquid short-term bonds). From my perspective, selling a portion of a gold allocation that is up 4.7 times since I took it makes sense, even if I expect gold prices to rise further. Why? Because I believe that my portfolio is over-weight gold and because I believe that the return on investment in these start-ups will be greater. I'm looking to increase my IRR without increasing risk. Another option for diversification that we will investigate are MLPs. Think of it as a continuation of my sales of technology stocks in 2000: sell stocks at a bubble high, sit in cash and Treasury bonds for a year, take a gold position at a 20 year low in gold prices, sell some gold and bonds at all time high prices to buy into technology start-up companies priced at a 20 year lows. The core gold position that hedges Ka-Poom, of course, remains untouched.

[we_are_toast]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Chris,


I haven't given up on my investigations. However, continuing my now 12 year old project to manage my own account in public as a way to give an alternative perspective to the din of stocks and houses Wall Street media sales pitches that passes for business news in the U.S. is vastly complicated by the fact that I am moving into asset classes that are inaccessible to the average reader. This may force a decision to move to a subscription-only business model and the elimination of the free area of iTulip.com. That decision has not been made but is under consideration.

Out of those investigations of start-ups came two investments that I made this week that I will share with readers in time when it's appropriate. I recently sold some, not a lot, of gold to diversify into one of these two start-ups. The other I invested in out of a "cash" account (liquid short-term bonds). From my perspective, selling a portion of a gold allocation that is up 4.7 times since I took it makes sense, even if I expect gold prices to rise further. Why? Because I believe that my portfolio is over-weight gold and because I believe that the return on investment in these start-ups will be greater. I'm looking to increase my IRR without increasing risk. Another option for diversification that we will investigate are MLPs. Think of it as a continuation of my sales of technology stocks in 2000: sell stocks at a bubble high, sit in cash and Treasury bonds for a year, take a gold position at a 20 year low in gold prices, sell some gold and bonds at all time high prices to buy into technology start-up companies priced at a 20 year lows. The core gold position that hedges Ka-Poom, of course, remains untouched.

Well now, this ought to spark some conversation.

I always thought the free/subscription business model for a website like iTulip was a very good model. Other similar websites use the same model. I imagine that iTulip.com isn't making a killing, but it certainly helps with the branding of "Erik Janszen". I know that splitting the reports into free and subscription sections must be time consuming, but that can't be difficult enough to do away with the free section.

Since the free subscribers don't have access to the paid subscriber area, you would be denying the paid subscribers access to the opinions and information provided by the free subscribers. In effect, telling the paid subscribers in the neighborhood bar that they can no longer go over and talk to the free subscribers on the other side of the room. Kind of takes the neighborly out of the neighborhood bar analogy.

Actually, how iTulip runs it's business is none of my business, but I am a bit curious how doing away with the free area helps the paid subscribers.

[ThePythonicCow]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Well here's a link to the team practice sessions....

Awesome - thanks.

[ThePythonicCow]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Actually, how iTulip runs it's business is none of my business, but I am a bit curious how doing away with the free area helps the paid subscribers.

I was wondering the same thing.

[Spartacus]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Actually, how iTulip runs it's business is none of my business, but I am a bit curious how doing away with the free area helps the paid subscribers.

My take on Erik's post is that if he's getting into investments that are not available the general public, having 1 site with a wall between restricted investors & general investors may not be a good idea.

Too easy for a member to innocently copy & paste info into a free thread.

Think "regulation" (if you can without laughing - some people do still run afoul of SEC & the like).

[CanuckinTX]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Or what if even more people turn to gold after another market crash and the price just continues to drive higher? I think we already had that 'sell anything liquid' period and so maybe the next time we might have the same effect on gold but it could be much shorter and fall much less before going quickly higher.

I'm not saying buy now, just saying there are lots of alternative things that could happen. My own plan is to just buy at set intervals and at set fixed amounts until I've got as much as I want to hold. That way I take the indecision out of the equation. I got tired of holding off wondering if it was going to fall a few more bucks and then I kept paying more by waiting.

[jpatter666]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

Or what if even more people turn to gold after another market crash and the price just continues to drive higher? I think we already had that 'sell anything liquid' period and so maybe the next time we might have the same effect on gold but it could be much shorter and fall much less before going quickly higher.

I'm not saying buy now, just saying there are lots of alternative things that could happen. My own plan is to just buy at set intervals and at set fixed amounts until I've got as much as I want to hold. That way I take the indecision out of the equation. I got tired of holding off wondering if it was going to fall a few more bucks and then I kept paying more by waiting.

Yep, bought PMs (paper, allocated and physical) until I was reasonably confident in the levels. I'm not going to be a Master of the Universe like jtabeb, but me and mine shouldn't starve either.

Also been *slowly* leveraging into various oil positions (mainly the shovel makers -- read drillers and pipelines). I think energy is the real currency in the end.

[ThePythonicCow]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

My take on Erik's post is that if he's getting into investments that are not available the general public, having 1 site with a wall between restricted investors & general investors may not be a good idea.

Too easy for a member to innocently copy & paste info into a free thread.

Think "regulation" (if you can without laughing - some people do still run afoul of SEC & the like).

But in that case, even most of us on the paid member side would have to leave iTulip, because we are not high net worth investors.

In other words, if EJ legally requires a forum for high net worth investors only, perhaps he needs to start afresh.

But I should quit speculating; I've probably drifted too far afield from whatever EJ has in mind or might do.

[EJ]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

My take on Erik's post is that if he's getting into investments that are not available the general public, having 1 site with a wall between restricted investors & general investors may not be a good idea.

Too easy for a member to innocently copy & paste info into a free thread.

Think "regulation" (if you can without laughing - some people do still run afoul of SEC & the like).

There are a thousand sites around that offer opinions on stocks, bonds, commodities and other assets, but where is the accountability? I want to know that the person giving an opinion has a personal stake in the outcome of acting on that opinion. That is the standard that iTulip has maintained here for 12 years. The positions in gold, Treasuries, savings bonds and CDs that I have been in for nearly a decade and have outperformed stocks were easily purchased by anyone. The assets that I am buying now to diversify out of Treasuries in particular cannot. The quandary is how to maintain the same level of accountability we have kept for 12 years without abandoning many of our highly valued members along the way?

You can already see a divergence occurring. As we begin to talk more about positions in accounts with $250,000 minimums, many readers are legitimately going to start to ask, "How is this relevant to me? Sell Treasuries and buy what?"

But I think I may have come up with a creative solution to a problem that has occupied my these past several months. I can't divulge it here yet but we've gotten it past the SEC lawyers and I'm cautiously optimistic that it will work out. Stay tuned. Thank you for your support.

[ThePythonicCow]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

But I think I may have come up with a creative solution to a problem that has occupied my these past several months. I can't divulge it here yet but we've gotten it past the SEC lawyers and I'm cautiously optimistic that it will work out. Stay tuned. Thank you for your support.

Good luck and thanks for giving it a go, regardless of how it turns out.

[Chris Coles]

Re: Gold may decline 50% before the World Cup is over - Eric Janszen

EJ, everyone,

being across the pond, I have had to catch up with the conversation. I start here, rather than with the earlier post by EJ as it is clear to me that some of you do not fully understand the depth of the problems facing anyone with any form of idea related to new investment. What has happened is that the FIRE industry, over a period of some decades, (this is not a recent thing), has created an industrial rule structure for what one might describe here in the UK as the Financial Services Industry, but what is generally described, here on iTulip, as the FIRE economy. The rules absolutely preclude any individual investment advice not originating from an industry insider acting under the rules set out by the FIRE economy.

It is today, a criminal offence, (not a slap on the wrist, but you face jail), to give any form of investment advice unless you are certified under the rule structure of the FIRE economy. Moreover, the rules are now deeply embedded into every layer of the industry and are immensely complicated. Some references will help you:

http://siteresources.worldbank.org/E...lation_ch3.pdf

http://eu.techcrunch.com/2010/04/25/...ets-stop-them/

http://blog.taragana.com/business/20...ulation-62463/

http://www.edhec-risk.com/performanc..._analysis/IAMA

And those are just some headlines. To get a better view, try these:

http://www.fsa.gov.uk/Pages/handbook/index.shtml

On the face of it, at first sight one can be forgiven for feeling the existing system is set up to help; but when one dives into the depths of the regulations, you will keep coming up against strong buffers to prevent investment at the grass roots of any local community. The FIRE economy has created a monster set of rules entirely centred upon their maintaining complete control of the investment mechanisms that have, IMHO, created a feudal mercantile economy that serves no one BUT the FIRE economy. They centre that control on the one message that seems so fair and reasonable, prevention of loss of the investment; prevention of failure....sic!

But that message suits a bank that lends money into a local community that it not only requires to be refunded, it also requires more in the shape of interest on the loan to also be returned to the bank. Thus bank lending automatically drains prosperity from the local economy into the bank's economy. Sound familiar?

Equity investment, on the other hand, is free money, freely invested, with no certainty of it being returned to the original investor. The more you invest with new equity into your local community, the greater the investment circulating within your local community; the greater the long term prosperity. All of you have been watching your local prosperity decline without understanding that the mechanism causing the decline is the very same one supposedly working so hard, under strong rules to prevent such loss.

My starting point for the debate is exactly opposite to EJ. For those that do not already know; I am the epitome of the classic struggling inventor. But in many ways we have both come to exactly the same conclusions; the existing system for investment of equity capital is not functional.

As I see it, the problem EJ faces, is that the rules may cause the sudden complete closure of iTulip, if he continues with the way the site and the membership is structured. So he is trying to find a way forward while still providing his excellent leadership through iTulip.

Returning to the wider debate about the system being not functional from my personal viewpoint, it is not only not functional; In my opinion, it absolutely prevents the ongoing establishment of a free society. That the present rules and investment mechanisms have created a feudal western civilisation, not unlike the worst examples from ancient history. By Western, I mean on both sides of the Pond. The US and Europe.

Again, on my part, I had opened the debate a long time ago with presentation of evidence to the Wilson Committee http://www.jstor.org/pss/2982159 Investigating the functioning of the City of London way back in the 1970's which got me a full page business page feature in Investors Chronicle, May 1978. Later still, after being placed into the position of applying for patents but being unable to raise the funding to even process the applications, let alone start the development of the embedded ideas, I had presented sufficient and very detailed evidence to the Bank of England during the early 1990's to get myself into direct correspondence with the then Governor, Eddie George and again, facing the same problems right now, with the present, Mervyn King.

To overcome the difficulties, as I see them; presented by the FIRE economy, I have created a new format for local communities to take up themselves without my input, (if that is their wish). The rules revolve around what I believe is a fundamental requirement IF, I stress the IF, you believe in the principle of freedom for the individual in a free society and their right to own the product of their own intellect; by stressing the notion of free enterprise. That the manager of the business owns the business; but accepts the consequent responsibilities to the investors. Rather than as now, the investor owns the business. I stress that seemingly insignificant detail, as I believe that insignificance lies at the heart of why we have become a feudal mercantile society.

I believe that the only way forward, when we come to the end of the rise in the price of Gold, is to invest equity under the rules of a free society, under free enterprise terms, back into our local communities.

The links to the full story can be taken from my personal web site www.chriscoles.com The free PDF book The Road Ahead from a Grass Roots Perspective contains in the first chapter, a short record of my own experience. The rest is up to each and every one of you. You need to understand that, my view is; the only way forward is each and every one of you has to take responsibility for your own communities. You cannot afterwards complain if you continue to lose prosperity to the FIRE economy, while turning your backs and expecting someone else to make your individual decisions.

What I have done is set out a draft set of rules based upon my own personal experience and have made a full public statement that they now belong to the ordinary people and that I will help anyone, in any way I can, if they wish to follow the path I have laid out.