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Discussion in 'The Furball Forum' started by Dragline, May 8, 2012.
And the worlds most expensive paperweight when that flood never comes. Sure is shiny though.
What do you base your prediction off of?
Not really. It's by nature a volatile market
This isn't unusual. PM isn't a good short term investment anyhow
Just tell me a better place to put my money for the next ten years then. Cuz the last ten have been fantastic!
Gold and silver have absolutely no counter party risk. In a world where crooks are running the paper game, I'll take that.
Nah. 10 years from now you'll need a wheel barrow full of gold to buy a loaf of bread. Widows will be using silver to light their stoves it will be so worthless.
The past few hundred years. The late 20's and early 30's compared to where we are now and the systemic structures in place to prevent that from happening.
Based on current valuations, I'd suggest real estate and the stock market. Natural gas and associated businesses are very attractive right now.
If there is no contract, there is no counter party risk. There are plenty of other risks and costs associated with PMs though.
Clearly the past 10 years have heavily influenced your opinions. It's interesting to me that you can give so much weight to the last 10 years while totally discounting the previous 200 or so.
I'm not sure if you were around, but the 1970's were very similar to the 2000's. The charts look almost identical. From 1972-1979 the CAGR of Large Cap stocks was 5.1%. Commodities (gold) returned an impressive 22.1%. Surely people were boasting about how much they made in gold and, having been scared out of the stock market, continued to buy more. Unfortunately they would have missed the incredible bull markets of the 80's and 90's, while watching gold prices fall back to where they were before the 70's bubble.
Here is the take of some old man from Omaha:
Scroll down to the current valuation of gold and what you could buy instead (All 400 Million acres of cropland in the US, 16 Exxon Mobiles and have $1 Trillion left over)
The last 10 years WERE great. I bought three gold eagles in 2002 and 2003 when it was under $320 an ounce. Sold two of them in 2008 for a hair over $1000 when gold spiked at $ 1084 and started going down, then the 2008 crash happend and gold spiked again and I so sold the last ounce of about $1700.
That is how I profited with gold. Pure luck buying low and selling high. However, I would have made money buying Apple Stocks around the same time, because 10 years ago Apple sucked and the stock were cheap and now look at them.
The problem people are having is everyone is screaming "Buy Gold" and the ones who are making money with it are the ones selling it. How do you expect to turn a profit when you are buying ANYTHING high and selling low. Those who bought gold at +$1700 are finding that out the hard way right now.
When the hype dies, eventually the price has to come down to normal market levels. That is with Housing, stocks, oil, and even gold.
Economy of scale is about costs, not prices. Those two things are not the same.
EDITED TO ADD: that is not to say that diseconomy of scale doesn't exist. It does, and it can add to per-unit costs when an organization gets large enough. I was trying to be precise. Too many people don't know the difference between prices and costs.
Silver $28.86. Buying opportunity!
U guyzez are so smart. So I should buy now because it went up. Wow. I got my behind handed to me in 2000 doing that with tech stocks and in 07 with real estate. But THIS time is different, right?
Avoid those crappy investments. No one will ever buy them again. I'm writing a book about all this good advice.
I gathered up my scrap gold and coins when it was a hair over $1700 and sold it all. I'm sitting on the proceeds to add to my silver when it gets down to my buy point.
Anyone crazy enough to still be in stocks or mutuals will deserve what happens. PM's are the safest long-term investment. With the rampant corruption in all the banking houses, physical PM's are a safety net you can count on. I prefer silver because it allows smaller increments of value, vital if we move into a barter economy.
Actually, there is already a sizeable underground barter economy right now, if you know where to look
Ronaldo - oro y plata es el ultimo dinero
Sure you can. Just like $3 gas can be sustained forever. It ain't ever going back to $1.50 again. Gold is priced in dollars, just like gas is. The dollar is going to continue to fall, not magically rise. Been to the grocery store lately?
Yeah, my Apple stock has doubled in a year. What a disaster!
Here is what Warren Buffet thinks of gold. Can't really argue with one of the richest men in the world.
History disagrees with you. Even taking into account the Great Depression, the long-term performance of stock markets beats that of gold.
And more to the point:
How much of your time, money, and effort are you going to spend preparing for something that may never happen?
In other words, are you going to play the game that we have now, or are you going to spend all of your time preparing for the day when the rules change, even though that day might never happen?
BB - are you calling the bubble here and now? Let me know because I'd like to bookmark this.
Nothing goes straight up (though gold has done a pretty remarkable job of it so far). This is just a correction in the bull market. Buying opportunity.
Interestingly enough, Marc Faber just called this.
Warren Buffett's advice is always peculiarly. One day he says silver is a horrible investment, then he buys 120 mil ounces. It's almost like he's trying to shake people out, so he can sweep in on the cheap to get it.
Maybe he's just a little butthurt at PM's in general. He bought that 120 million oz of silver at $5 an oz, it went up to $7 and he thought it was a bad investment so he dumped it. It later shot up to $45 oz as we all know.
While Buffet makes a good point, you have to consider that the size and breadth of his investments give him good leverage with respect to safety versus earnings. Economies of scale are at work here.
As I said before, PM's preserve wealth, they do not increase it. I am approaching 70 yrs so have to rely on what money I already have, and speculation in the markets would be foolish in my situation. If you are a 30-something, have a good career and are well grounded financially, then Buffet's rule may work for you.
Metals are about preservation of capital, not growth.
Buffett is out for Buffett. He doesn't play with the same ground rules as the rest of us.
If we move to a barter economy Gold and Silver will have little value. What will have value is clean water, food, gas, ice, T-paper, alcohol, cigarettes guns and ammo. You can not eat, drink, or fuel a generator on gold or silver. Look at any major disaster these are the items people will need to survive.