Gold Not Getting Killed!!!

[thriftyandboringinohio]

Re: Gold Not Getting Killed!!!

Chat at the usual websites says the ETFs are gobbling physical by the ton and helping drive prices upwards.
Hooray!

[thriftyandboringinohio]

Re: Gold Not Getting Killed!!!

Gold having a good morning. Some of the chartists call $1265/oz an important number which gold just exceeded.
Wonder if it can hold to the close?

[jpatter666]

Re: Gold Not Getting Killed!!!

Gold having a good morning. Some of the chartists call $1265/oz an important number which gold just exceeded.
Wonder if it can hold to the close?

I know the official iTulip line is not to buy gold miners, but GDX and GDXJ are rocketing even faster.

[medved]

Re: Gold Not Getting Killed!!!

I know the official iTulip line is not to buy gold miners, but GDX and GDXJ are rocketing even faster.

The official iTulip line targets mostly capital preservation, not income/cash flow. In this environment, unfortunately, the only way to get some income is speculation which is out of iTulip scope.

I made tons of cash on gold miners (some of it tax-free in my IRAs and some of it in my kids' custodial accounts). I would estimate, 1 out of 4 my daughter's college years were paid using this cash. I own tons of BGEIX mutual fund with the average cost of $5.95 and I am selling it as we type for ~$25.

[Raz]

Re: Gold Not Getting Killed!!!

The average retail stock buyer is speculating that the shares of businesses that they own make something that people will continue to want, and that the company or companies invested in are the best at meeting that want. For the average investor, buying stocks is every bit as speculative as buying commodities.

A stock index is no less vulnerable to inflation or other macro economic effects than commodities.

Warren Buffett is not your average investor. He has a team of analysts who methodically analyze markets to pick growing markets, pick likely leaders in those markets, then meet with management of likely leaders to determine which is most likely to succeed.

The retail investor has none of these risk eliminating tools.

The retail investor's purpose in the market is to drive up the prices of stocks that insiders like Buffet own, and to get left holding the bag when insiders determine that it's time to sell.

Well said, FRED. (Did that rhyme?)

[Raz]

Re: Gold Not Getting Killed!!!

I think he have done some killer deals, among them BYD. However. He is not like Soros. He don't time, and rearrange his whole portfolio just like that, he rather add some new stocks that will benefit from the new trends. He is very good at avoiding mistakes, and even if his portfolio is not great for a decade or even 16 years counting from 2000, his companies are likely doing well, and will benefit greatly in the next structural bull.

Buffet made most of his money by investing in insurance companies. He knows a good racket when he sees one.

Largo made an excellent point about him losing 50% of his shareholders' money in 2008. I don't see him as a genius at all.

[Starving Steve]

Re: Gold Not Getting Killed!!!

My feeeeeeeeeeeeeeeeeeeeeeeeeeeeeling, and this is just a gut-feeling, is that the gold market is sensing a complete failure in central bank policies, and inflation is back, quite strong in everything but assets. So the gold market is sensing a war on assets, especially a war on cash, so the gig is up for Bernanke and his bunch. The world capital market is going to demand his head, along with much more yield on bonds. I smell blood. I think a Greece scenario is just about to unfold, but the Greece scenario will be the U.S. $ and maybe the Euro, too. So, I am just thinking of a show-down between savers and the central banks. Gold is giving the world a clear message: This is an Argentina scenario that is about to unfold.

[Raz]

Re: Gold Not Getting Killed!!!

I think Buffet don't like gold. It's not something he can hold "forever" and make money on. He rather want to own businesses that make money and don't rely on market timing, like gold that does nothing, and is a greater fool game of speculation. If there is terrible inflation, the businesses that are of good quality, will be able to pass that inflation on, and thus make more money. The businessman that own a good business will therefore don't loose out to inflation. However the wait can be long, all to after inflation peaks before stocks start a secular bull, and the value MR market set to those stocks start to rise, but for the intelligent businessman that does not matter as the businessman are making a living from the income stream of that business, not living to sell off more and more of his gold. For the patient investor the return from holding those quality stocks, including dividends will almost certainly outperform gold over a longer time period like 30-40 years.

A very interesting thing about the DOW, is the divergence between the Q ratio, and the Price to book ratio on the DOW. I think there will be an upward adjustment of book values similar to after 1950, as described by buffet in his 1979 Fortune article. But first we might go through a further cycle of inflation similar to what happened during WW2 (or the late seventies), Unless it's ready to be a bull now.

I also like to add that when long term interest rates peaked at as high they did in 81 it was an exception. The usual level in the past, before secular bulls, was around 6 %, like before the roaring twenties. I don't interest rates have to peak at such high levels as in 81 again, before there is a secular bull.

Gold is NOT an investment - it's a currency. Of course it does have real limitations: (1) you can't eat it, and (2)unlike Bonars you can't wipe your butt with it.

Over a long cycle, however, you are correct. A well managed portfolio of equities will certainly outperform gold.

Owning stock in a company that has little in the way of tangible assets will likely be a loser in a severe inflation. Earning more and more Bonars that are worth less and less with each passing month is not my idea of success - unless your business produces a product that is absolutely essential to the functioning of a modern economy, and your competition is quite limited therefore handing you very strong pricing power. (Does crude oil ring a bell?)

[metalman]

Re: Gold Not Getting Killed!!!

My feeeeeeeeeeeeeeeeeeeeeeeeeeeeeling, and this is just a gut-feeling, is that the gold market is sensing a complete failure in central bank policies, and inflation is back, quite strong in everything but assets. So the gold market is sensing a war on assets, especially a war on cash, so the gig is up for Bernanke and his bunch. The world capital market is going to demand his head, along with much more yield on bonds. I smell blood. I think a Greece scenario is just about to unfold, but the Greece scenario will be the U.S. $ and maybe the Euro, too. So, I am just thinking of a show-down between savers and the central banks. Gold is giving the world a clear message: This is an Argentina scenario that is about to unfold.

hope ya took the itulip line on that in 2001 & bought the central banker's cryptonite. man oh man what a show we shall see! the oligarchs vs not only the fed haters & goldbugs but the latte drinkers & sex in the city viewers. oh, what, i can't afford a $39 latte? why not? aw, shit... cause i'm a ******* dimwit who bought into the program.

[grapejelly]

Re: Gold Not Getting Killed!!!

Gold is NOT an investment - it's a currency. Of course it does have real limitations: (1) you can't eat it, and (2)unlike Bonars you can't wipe your butt with it.

Over a long cycle, however, you are correct. A well managed portfolio of equities will certainly outperform gold.

It's been awfully hard to beat gold's 16% annual return since 2000.

Just look at my very favorite chart in the world, or it could be a lawsuit, Dow v. Gold, and you will see that we are in the midst of a huge increase in gold relative to stocks. Very hard to beat a secular market if you are a long term investor.

Also, gold is NOT a currency. You can't spend it. It isn't money. It is close to money but it isn't money.

[LargoWinch]

Re: Gold Not Getting Killed!!!

Also, gold is NOT a currency. You can't spend it. It isn't money. It is close to money but it isn't money.

grapejelly, can we call it a currency of international settlement between banksters then? a.k.a. "the fourth currency".

[flintlock]

Re: Gold Not Getting Killed!!!

Frankly I don't get why Buffet is still in the game. Gee buddy, go fishing or something.

[Starving Steve]

Re: Gold Not Getting Killed!!!

My parents bought a bungalow in south San Jose, California in 1960. The price was $17,960. The little bungalow is now worth around $300,000. And from 1960 until now, one could have rented the bungalow and drawn a handsome cash-flow. THAT IS WHAT I CALL THE VERY DEFINITION OF AN INVESTMENT.

When I was a boy in San Jose, I used to play with silver dollars --- those cartwheels that made holes in your pants. To-day, those silver dollars are worth about $18 each, or in 50 years, they have gone up 18 times. But gold was even better: a $35 ounce of gold in 1960 is now worth $1260 or about 36 times.

FORGET EVERYTHING THE IDIOTS IN THE ECONOMICS CLASSES IN UNIVERSITIES TEACH. EVERYTHING! UN-LEARN IT ALL.

And the ecology classes are not much better. Total garbage understandings taught by idiots!

Shall we look at $3/barrel oil from the Eisenhower years? Up 25X. And we have only just begun with oil; the fireworks are still ahead.

FORGET EVERYTHING IN SAMUELSON's ECONOMICS TEXTBOOK. EVERYTHING!

Imagine the rigged bond market indicating to the world that 10yr U.S. govn't bonds are worth a 2.6% yield? How many years to double your money, just one time? --- 27 years for one (1) doubling in nominal dollars?

I was shopping in Watsonville, Cal, and the prices in the stores were hyper-inflating. The prices for household items and food were inflating faster than they did in the Jimmy Carter years back in the late 1970s. And you are going to wait 27 years for your first (nominal) doubling by sitting in the supposed safety of U.S. Treasury bonds?.... What am I missing here?????????????? No-one could be so dumb!

[hayekvindicated]

Re: Gold Not Getting Killed!!!

My parents bought a bungalow in south San Jose, California in 1960. The price was $17,960. The little bungalow is now worth around $300,000. And from 1960 until now, one could have rented the bungalow and drawn a handsome cash-flow. THAT IS WHAT I CALL THE VERY DEFINITION OF AN INVESTMENT.

When I was a boy in San Jose, I used to play with silver dollars --- those cartwheels that made holes in your pants. To-day, those silver dollars are worth about $18 each, or in 50 years, they have gone up 18 times. But gold was even better: a $35 ounce of gold in 1960 is now worth $1260 or about 36 times.

FORGET EVERYTHING THE IDIOTS IN THE ECONOMICS CLASSES IN UNIVERSITIES TEACH. EVERYTHING! UN-LEARN IT ALL.

And the ecology classes are not much better. Total garbage understandings taught by idiots!

Shall we look at $3/barrel oil from the Eisenhower years? Up 25X. And we have only just begun with oil; the fireworks are still ahead.

FORGET EVERYTHING IN SAMUELSON's ECONOMICS TEXTBOOK. EVERYTHING!

Imagine the rigged bond market indicating to the world that 10yr U.S. govn't bonds are worth a 2.6% yield? How many years to double your money, just one time? --- 27 years for one (1) doubling in nominal dollars?

I was shopping in Watsonville, Cal, and the prices in the stores were hyper-inflating. The prices for household items and food were inflating faster than they did in the Jimmy Carter years back in the late 1970s. And you are going to wait 27 years for your first (nominal) doubling by sitting in the supposed safety of U.S. Treasury bonds?.... What am I missing here?????????????? No-one could be so dumb!

The biggest inflation in price over the last half a century has been in the price of land in major western cities (and also many Asian cities). Gold, oil, coal, stocks are all dirt cheap compared to the price of land.

[LargoWinch]

Re: Gold Not Getting Killed!!!

Imagine the rigged bond market indicating to the world that 10yr U.S. govn't bonds are worth a 2.6% yield? How many years to double your money, just one time? --- 27 years for one (1) doubling in nominal dollars?

What you are describing here SS is a 27yr bond @ 2.6%, but point taken...