Search found 992 matches

by hazlitt777
Wed Aug 21, 2013 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

From 1869-79 there was an annual deflation of 3.8% and the economy roared. Imagine a $20 dollar bill sitting in the drawer going up 3.8% annually. What is that over 10 years? 45% if my math is right. Surely you must be kidding. That period started off with the Recession of 1869-1870. But that was followed by the so-called Long Depression from 1873 to 1879, the longest economic recession in U.S. history. Thousands of businesses failed, millions lost their jobs, unemployment in New York City was over 25%. Wages decreased by more than half, negating the deflation of the dollar. There were widespread food riots and violent strikes. It was the first international economic depression. It was the worst period of economic growth before the Great D...
by hazlitt777
Wed Aug 21, 2013 7:53 pm
Forum: Personal Consumer Issues
Topic: Boglehead Beer
Replies: 1071
Views: 204170

Re: Boglehead Beer

Steven's point(Wisconsin) Octoberfest is excellent.

Also Leinenkugel's Creamy Dark is another favorite.
by hazlitt777
Wed Aug 21, 2013 7:39 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Just remember if it is too rare, it could hardly serve as money, or a quasi money as is the case today. There has to be just the right combination of properties for a commodity to act as money: divisibility without loss of value, homogenous, large value per unit volume, high marketability/liquidity(transcultural), easy to store, easy to carry, and a stable element. I think that is everything. Find all those in another element, and you have another potential commodity serving as money....like silver. Neodymium then possibly? It is fairly rare but not too rare and there would be the added benefit that you would never drop a coin, because they would all be stuck together. I don't know enough about what it looks like, all its traits etc. But i...
by hazlitt777
Wed Aug 21, 2013 7:33 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

There are consequences of inflation that we usually don't think about. Consider someone with adequate life insurance coverage, but can no longer buy life insurance due to recent health changes. The financial protection (in real terms) for that person's beneficiaries can be significantly decreased by inflation. Yet, there is nothing they can do about it. IMO, the only good thing about inflation is that it prevents deflation, which can be even worse. Jeff Why is deflation bad? That seems to be a truism that goes unquestioned. Deflation is wonderful. I love sales. It leaves more money in my pocket so I can buy other things, thus strengthening the economy. If it were not for the generally falling prices in electronics, there would be a lot few...
by hazlitt777
Wed Aug 21, 2013 7:31 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

oxothuk wrote:
hazlitt777 wrote: I'm sure all those who got jobs in that industry, appreciate deflation.
Deflation is a monetary phenomenon, and affects prices across the board.

Technology improvements which reduce the cost of a product relative to all other prices are a different phenomenon and not the same as deflation.
Actually, "aggregrate inflation" is an intellectual construct. Closer to the truth is that inflation manifests itself more in some areas than others...depending upon where the new money flows. This is part of the cause of bubbles.
by hazlitt777
Wed Aug 21, 2013 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

Deflation is wonderful. I love sales. It leaves more money in my pocket so I can buy other things, thus strengthening the economy. You would have loved 1929-1933. The value of a dollar rose 30%. People had so much money in their pockets and the economy was so strong they called it the Great Depression. http://research.stlouisfed.org/fredgraph.png?g=lDu Ron Bad economic theory. The economy stagnated because they froze wage prices for one. That caused labor to be overpriced and thus no work. More complicated than that but it was a big element. From 1869-79 there was an annual deflation of 3.8% and the economy roared. Imagine a $20 dollar bill sitting in the drawer going up 3.8% annually. What is that over 10 years? 45% if my math is right.
by hazlitt777
Wed Aug 21, 2013 7:25 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

Phineas J. Whoopee wrote:
What this country needs is a really good five-cent cigar.

-- Usually attributed to Vice President Thomas R. Marshall
There are plenty of good five-cent cigars in the country. The trouble is they cost a quarter. What this country needs is a good five-cent nickel.

-- Franklin P. Adams
PJW

I like that one.. +1
by hazlitt777
Wed Aug 21, 2013 7:20 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Then why wasn't every other metal tripled in value? Rick Ferri Just guessing that it is partly a function of its rarity. It stands to reason the more rare a metal, the more sensitive it will be to changes in demand. This is why I have been saying we should be buying Osmium. 1000x rarer than gold and the highest density of naturally occurring elements. Just remember if it is too rare, it could hardly serve as money, or a quasi money as is the case today. There has to be just the right combination of properties for a commodity to act as money: rare, divisibility without loss of value, homogenous, large value per unit volume, high marketability/liquidity(transcultural), easy to store, easy to carry, and a stable element. I think that is every...
by hazlitt777
Wed Aug 21, 2013 7:15 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

3CT_Paddler wrote:
Rick Ferri wrote:Then why wasn't every other metal tripled in value?

Rick Ferri
Just guessing that it is partly a function of its rarity. It stands to reason the more rare a metal, the more sensitive it will be to changes in demand.
I would also hazard a guess that it is used as a de facto monetary metal to this day in many circles, so it acts differently than other metals in reaction to people's perceptions of an increase in the supply of money and the rising prices that often follow.
by hazlitt777
Wed Aug 21, 2013 7:11 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

camaro327 wrote:
hazlitt777 wrote:And if you are in the lower tax bracket, I thought the tax rate was 15% upon sale. But it seems it is 28% across the board from what I can google now. (Anybody out there find something different let me know.) But it must be working for some that it gets taxed so high? Who knows?
It's a 28% maximum rate. So it can be very low, however all the gains would build the total amount towards the next tax bracket. The rules are rather complex on this.
Thank you. Can you get me a link for that? I couldn't find one.
by hazlitt777
Wed Aug 21, 2013 7:09 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

nisiprius wrote:
hazlitt777 wrote:...chemically the most stable element (I do believe)...
No. The most chemically stable element is helium.
Okay. Let's quibble:>)

No, gold is one of the least reactive chemical elements, solid under standard conditions.
It is a dense, soft, malleable, and ductile metal with a bright yellow color and luster that is considered attractive, which is maintained without tarnishing in air or water.
http://en.wikipedia.org/wiki/Gold

Although helium is more stable, thank you I learned something, it is immaterial to the discussion. A gas will never be a safe store of value. Although helium won't blow up, it would be a pain to store and measure out and have a low value per unit volume.

Nice try:>)
by hazlitt777
Wed Aug 21, 2013 2:08 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

I just can not get on board with a rock that is dug up from the ground at high costs, then transported and guarded at high costs (to referrence Warren Buffett's latest shareholder letter). The investment authorities I follow and look to for advice suce as Jack Bogle, David Swensen, Warren Buffett, and Rick Ferri have very real and compelling reasons for avoiding this "rock". I also found David Swensen's excellent book "Unconventional Success" very useful. I would encourage anyone to read it. In terms of taxes, unless I am mistaken, I believe commodities such as "GLD" and "SLV" are taxed at a 28% collectable rate? Please please...it isn't a rock! :>( There is a reason metals ultimately became money in...
by hazlitt777
Wed Aug 21, 2013 1:48 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Jfet wrote:Without becoming a history channel "prepper", how do you protect your portfolio against extreme currency devaluations without owning something like gold or silver? Would international bonds do the trick?
The problem with international bonds, is that those currencies also have a tendency to be devalued. Theoretically, if one could find such a currency that isn't being devalued, it could work. But when there is a "currency war" going on, it will be hard for any country to avoid the temptation to devalue. Thus the role of commodities that traditionally served as money in ones portfolio.
by hazlitt777
Wed Aug 21, 2013 11:46 am
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Central bankers hold around 18% of the world's gold supply. Private investors around 16%. 52% is in the form of jewelry and 12% is in used industrially. http://en.wikipedia.org/wiki/Gold_reserve#World_gold_holdings There have been times when gold provided a real return, for example back in 1869-79. Check out page 154-155 in Rothbard's book, The History of Money and Banking in the US for an interesting explanation of this. I'm of the opinion since we are completely off the gold standard, there is a good chance that gold will provide a 1-2% real return in a modern growing economy. If the central banks hold it, I think that we all should hold it. I like to see the power of stocks, bonds, and gold...very different forms of wealth, broadly owned...
by hazlitt777
Tue Aug 20, 2013 8:52 am
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Clive,

I would just hold 5-10% of ones portfolio in gold and rebalance. Best to do it before prices get higher...

http://www.usagold.com/cpmforum/2013/08 ... this-year/
by hazlitt777
Tue Aug 20, 2013 8:49 am
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

There are consequences of inflation that we usually don't think about. Consider someone with adequate life insurance coverage, but can no longer buy life insurance due to recent health changes. The financial protection (in real terms) for that person's beneficiaries can be significantly decreased by inflation. Yet, there is nothing they can do about it. IMO, the only good thing about inflation is that it prevents deflation, which can be even worse. Jeff Why is deflation bad? That seems to be a truism that goes unquestioned. Deflation is wonderful. I love sales. It leaves more money in my pocket so I can buy other things, thus strengthening the economy. If it were not for the generally falling prices in electronics, there would be a lot few...
by hazlitt777
Tue Aug 20, 2013 8:44 am
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

Jack wrote:
hazlitt777 wrote:I just bought a car battery for my Jeep. 109 dollars! Just a handful of years ago, one could get a battery for 75. I think inflation is a lot higher and more insidious than one thinks.

Therefore I own, along with my stocks and bonds, gold to provide some protection.
It seems you should have bought lead.
Gold is a lot easier to store...and it has gone up too in that same time. It is the "universal commodity."
by hazlitt777
Mon Aug 19, 2013 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation is scary stuff.
Replies: 42
Views: 5580

Re: Inflation is scary stuff.

I just bought a car battery for my Jeep. 109 dollars! Just a handful of years ago, one could get a battery for 75. I think inflation is a lot higher and more insidious than one thinks.

Therefore I own, along with my stocks and bonds, gold to provide some protection.
by hazlitt777
Fri Aug 16, 2013 4:50 pm
Forum: Investing - Theory, News & General
Topic: My Take on Gold
Replies: 213
Views: 28208

Re: My Take on Gold

Hi Hazlitt, Why 10% specifically? And why ignore the macroeconomic motivations and actions of the Indian government? At 10% will the drain of currency stop? Will the decline of the Rupee slow? Will the fundamental responsibility of the government to facilitate private commerce disappear? Will the danger of even worse famine end? And if the latter isn't the responsibility of the national government, what is? See my two prior posts in this thread, and read mine plus wshang's links. Then answer. PJW According to the second article I posted, the Indian citizens save about 10% of their savings in the form of gold. I presume they are doing well financially? So as long as that goes on, they will be saving 10% in gold and the demand will remain. A...
by hazlitt777
Fri Aug 16, 2013 3:59 pm
Forum: Investing - Theory, News & General
Topic: My Take on Gold
Replies: 213
Views: 28208

Re: My Take on Gold

Rick Ferri wrote:Despite record Chinese and Indian buying, the price of gold is still down nearly 20% year-to-date. What will the price fall to when they stop buying?

Rick Ferri
Why would they stop buying at this point? Indians save over 30% of their income on average and hold 10% of their savings in gold. The Indian citizen on average doesn't seem to be struggling but if they were, then I could see how their purchase of gold would slow and have an adverse effect upon the price of gold.

http://dailyreckoning.com/indias-gold-mania/

http://www.bloomberg.com/news/2013-06-2 ... -bug-.html

I don't see it yet.

Joe
by hazlitt777
Fri Aug 16, 2013 3:43 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

The only data you need to understand gold and stocks is in the article written by ?Erb and Harvey or is that Erb and Campbell?? Either way they looked at monthly returns of gold (spot price of course) and stocks (?dow vs. Sp500 return) since early 1970's to current. The results: when stocks are up gold is up 50% of the time and down 50% of the time. When stocks are down gold is up 50% and down 50%. Sounds as much of noncorrelation as you can expect. Now the years stocks have been the in the dumps greater then 10% and worse is when gold seems to hold, i.e. diversify or even go up, i.e. hedge the loss. Good luck. Confusingly Campbell Harvey is a professor of finance at Duke-- and yes both names could be first or last. Canadian parents are fo...
by hazlitt777
Thu Aug 15, 2013 8:26 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Re: Gold and DJIA: What is going on?!

Well this year gold and the DJIA have been getting a lot of attention for their short term direction...stocks up, gold down. I thought for balance I would put this out there. You are right of course...percentage wise what has happened in the last seven days isn't earth shattering. I just thought I would put something out there. Is this a new trend? Who knows. As far as the source, I've corresponded with Mr. King in the past and feel he is no charleton...for what that is worth. It is true though that sources are usually not revealed and I wish they were. Things are often that way when one is dealing with information that can have a big impact on a short term basis...with any financial asset. At least that is the sense I get with these things...
by hazlitt777
Thu Aug 15, 2013 7:53 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14686

Gold and DJIA: What is going on?!

Has anybody come across any insightful articles about what is going on in the gold and stock market? They are acting in a very negatively correlated and manner, and seem a bit volatile.

I would appreciate some articles you may have come across on the topic.

Here is one I came across:
http://kingworldnews.com/kingworldnews/ ... _Home.html


I wouldn't dream of market timing, just diversified into gold, along with stocks and bonds. It will be interesting to see where things end up by the end of this year with the DJIA, gold and bonds. I'm glad I'm diversified.
by hazlitt777
Tue Aug 13, 2013 4:48 pm
Forum: Personal Investments
Topic: Precious metals fund VGPMX
Replies: 48
Views: 13132

Re: Precious metals fund VGPMX

z3r0c00l wrote:Wow 25% of your portfolio in gold? That would keep me awake at night...
Well, the Permanent portfolio isn't for everybody. For you...5%.
by hazlitt777
Tue Aug 13, 2013 4:46 pm
Forum: Investing - Theory, News & General
Topic: Bitcoin's Purpose in a Portfolio
Replies: 105
Views: 15310

Re: Bitcoins Purpose in a Portfolio

Just came across another article on Bitcoins. Thought it was worth posting. I must warn you it isn't favorable.

[OT article link removed by admin LadyGeek]
by hazlitt777
Tue Aug 13, 2013 8:56 am
Forum: Personal Investments
Topic: Precious metals fund VGPMX
Replies: 48
Views: 13132

Re: Precious metals fund VGPMX

Newbie here. Hold a diversified portfolio (across US total mkt, developed market, and US total bond). Pre-paying home mortgage with 3.75% interest with monthly payments. Had some idle cash. Needed opinions from forum users on the Vanguard precious metals fund VGPMX. Any thoughts? The VGPMX is first a stock investment and only indirectly a "precious metals" investment. In fact, if you look at the prospectus, you will see it has a significant allocation to non precious metals. If you are interested in taking a position in precious metals, I recommend between 5-25% of your portfolio, in gold, or if you also want silver to make up part of that, keep the silver component at 1/5th of that or less. I like the gold firm at www.golddealer...
by hazlitt777
Fri Aug 09, 2013 1:40 pm
Forum: Investing - Theory, News & General
Topic: 1987 stlye crash on the way?
Replies: 65
Views: 10419

Re: 1987 stlye crash on the way?

Ricola wrote:The next crash might not be 1987 like, but there will be another crash. Its the nature of the system. Who knows what this next one will be like, personally I think we are setting ourselves up for bigger, faster, and deeper crashes.
I agree. That is why it is important to be diversified, so when it happens again, you can sleep through it better.

I would recommend stocks, bonds, cash and gold to be truly diversified.
by hazlitt777
Sun Aug 04, 2013 12:23 pm
Forum: Personal Consumer Issues
Topic: trip to iran, suggestions?
Replies: 25
Views: 4367

Re: trip to iran, suggestions?

I have been to Iran for work. I was there for a month or so a couple of years ago. (I am in a rush so I'll write this quickly) Thoughts: - The traffic is unbelievably awful. This is the number one most dangerous terrible thing you will run into constantly. India / China / Latin America are better than Iran at driving. Iranians have no lane discipline whatsoever. 4 lanes = 7 cars. To cross the road you must step out in front of the traffic and it stops. It is terrifying. You'll need to do it first with a local before you'll get the hang of it. - Tehran is safe. I was wandering around late at night, no problem. - The average toilet is a ceramic hole in the floor that kind of flushes and no toilet paper. I would get nervous if I needed to go ...
by hazlitt777
Sun Aug 04, 2013 12:12 pm
Forum: Investing - Theory, News & General
Topic: The Many Myths of Warren Buffett
Replies: 29
Views: 6600

Re: The Many Myths of Warren Buffett

My take on him is that he is quite well politically connected and that this gives him an edge with much of his investing. It may not have always been that way, but I take with a grain of salt what he says and does in these last years. The rest of us should diversify and index. How would this give him an advantage? If you watch the movie Too Big to Fail, he did certainly gain an advantage by buying Goldman Sachs at the price that he wanted. So if that is what you mean, I guess you are right. You do pay a premium to have Buffett buy a lot of your stock. Lehman Brothers on the other hand didn't agree and look where they are now. I don't want to get into it here. I can email some of the evidence I'm basing my opinion on to you if you are inter...
by hazlitt777
Sat Aug 03, 2013 11:29 pm
Forum: Investing - Theory, News & General
Topic: The Many Myths of Warren Buffett
Replies: 29
Views: 6600

Re: The Many Myths of Warren Buffett

My take on him is that he is quite well politically connected and that this gives him an edge with much of his investing. It may not have always been that way, but I take with a grain of salt what he says and does in these last years.

The rest of us should diversify and index.
by hazlitt777
Sat Aug 03, 2013 12:13 am
Forum: Personal Finance (Not Investing)
Topic: Dave Ramsey close to 100% stock
Replies: 65
Views: 9464

Re: Dave Ramsey close to 100% stock

You are forgetting commodities like gold and silver...which have for thousands of years served as money. They can help one diversify away from stock risk. If you look at what has been used as money for the most people over the longest periods of time, it would be cowry shells (like from the beach).. http://en.wikipedia.org/wiki/Shell_money Money is only good for what you can exchange it for. At the end of the day, U.S. citizens will have to somehow convert what they earn and spend to U.S. dollars to pay their taxes. When you go out to buy something you use U.S. dollars, it's "the law" the money is good for whatever goods and services you want by fiat. I didn't say they are money now...just that you do have other options besides s...
by hazlitt777
Fri Aug 02, 2013 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Dave Ramsey close to 100% stock
Replies: 65
Views: 9464

Re: Dave Ramsey close to 100% stock

timmy wrote:For folks who prefer to avoid debt (lend and borrow), what other options are there for investing to reduce the risk of stocks? You are pretty much left with cash/stock. Or would you consider protective puts and maintain a higher equity allocation?

Good conversation...
You are forgetting commodities like gold and silver...which have for thousands of years served as money. They can help one diversify away from stock risk.
by hazlitt777
Wed Jul 31, 2013 6:55 pm
Forum: Investing - Theory, News & General
Topic: Homes as Investments?
Replies: 101
Views: 9645

Re: Homes as Investments?

For those who think of a home as an investment, ignore this post. For those who don't think of a home as an investment, I have a question. Do you invest in REITs, or REIT funds? What is the difference? It is the same as your home being a single investment, like KO, XOM, etc. as opposed to TSM, which includes the market weight of REITs, or Vanguard's VGSLX, a collection of real estate "investment" trusts. Greg Interesting. I would view REITs as an investment but not a home, in that owners of REITs receive a premium over what would have been the monthly mortgage payment in owning an equivalent value of homes. That premium would be established based on offsetting management costs, the opportunity cost of purchasing the REIT and the ...
by hazlitt777
Wed Jul 31, 2013 3:07 pm
Forum: Personal Consumer Issues
Topic: Help us pick a car, please.
Replies: 44
Views: 5952

Re: Help us pick a car, please!

Take a look at the Chevy Cruze Eco. If you are okay with a manual tranmission, it gives you 41 mpg on the highway and, after test driving it, I felt it handled well...like a midsize car with plenty of space for two people. I'm 6'2" And it isn't a hybrid.
by hazlitt777
Tue Jul 30, 2013 8:32 pm
Forum: Investing - Theory, News & General
Topic: Homes as Investments?
Replies: 101
Views: 9645

Re: Homes as Investments?

Houses are money pits. But they beat sleeping out in the rain. I would be very interested in reading a well researched book on the pros and cons of buying versus renting. Certainly, if one is confident they won't have to sell in under five years, I can see justifying purchasing a home. But it seems too many buy too much home because they think it will give them a return. I often think if this topic were more objectively studied that in many more cases more modest homes would be built and purchased in this country, or perhaps be simply rented. Your well researched book is here: Rent vs. Own Best book I've ever read on the pros & cons, and shows how either decision can be the superior choice depending on the circumstances. Thanks.
by hazlitt777
Tue Jul 30, 2013 7:54 pm
Forum: Personal Consumer Issues
Topic: Really hard to avoid "Keeping up with the Joneses"!
Replies: 313
Views: 37792

Re: Really hard to avoid "Keeping up with the Joneses"!

Start by reading "The Millionaire Next Door." You will find through the research of two university professors what the lifestyle issues you describe are really all about. The millionaire next door does not lead the lifestyle you describe and the authors even address the issue of parents subsidizing the lifestyle of grown married adult children. (never could figure out why in the English language adult offspring are still referred to as children.) As they say in Texas, "big hat and no cattle." I love that quote from that book. I really think one should pride themselves in their net worth and brag about, if one has to brag, rather than about the toys. Perhaps one could say to ones vocal friends and family that buy lots of...
by hazlitt777
Tue Jul 30, 2013 7:45 pm
Forum: Investing - Theory, News & General
Topic: Interesting Debt Theory...
Replies: 48
Views: 5903

Re: Interesting Debt Theory...

This thinking may also cause something much more dangerous; having credit card debt as a "normal" feeling. Nooo!! Ive always hated "The Psychology of Debt" argument (I knew someone would bring it up). With money, finances, and anything else that has concrete numbers, we have the benefit of looking at real models that have right answers. To muddle feelings into it is what creates a more dangerous environment. At 35 years and 8% return, there is a right answer to get the best possible return. High debt, low debt, or no debt, there is no normal - a model needs to be built for every situation. If carrying higher debt is better for a 35 year plan, then carry a higher debt. That's why Im here, to model build : ) Beware of mod...
by hazlitt777
Tue Jul 30, 2013 7:01 pm
Forum: Investing - Theory, News & General
Topic: Homes as Investments?
Replies: 101
Views: 9645

Re: Homes as Investments?

Certainly, if one is confident they won't have to sell in under five years, I can see justifying purchasing a home. Where does this number of years come from? We just purchased a house and after closing costs and all, the HUD-1 showed us getting almost half of what each of the listing and seller agent were paid. I suppose if we were to turn around and sell the house, we would have to pay for various items including agents, transfer taxes, title insurance; so the 5 years estimate would assume some amount of property value growth to cover these items? I wish I could tell you. I don't remember. It is probably one of those rules of thumb to be taken with a grain of salt. I know with stocks we say one shouldn't buy them if you have to sell in u...
by hazlitt777
Tue Jul 30, 2013 4:09 pm
Forum: Investing - Theory, News & General
Topic: Homes as Investments?
Replies: 101
Views: 9645

Re: Homes as Investments?

Sidney wrote:Houses are money pits. But they beat sleeping out in the rain.
I would be very interested in reading a well researched book on the pros and cons of buying versus renting. Certainly, if one is confident they won't have to sell in under five years, I can see justifying purchasing a home.

But it seems too many buy too much home because they think it will give them a return. I often think if this topic were more objectively studied that in many more cases more modest homes would be built and purchased in this country, or perhaps be simply rented.
by hazlitt777
Tue Jul 30, 2013 3:34 pm
Forum: Investing - Theory, News & General
Topic: Justice and Marc Faber
Replies: 7
Views: 1582

Re: Justice and Marc Faber

Treasuries are sold at auction in an open market. Nobody forces anyone to buy them. If people don't think they are paying enough interest, they can vote with their dollars and buy someone else's bonds. If you think the interest rates on U.S. government-issued bonds are "artificially low," then shrug, go swap out your Total Bond for Vanguard Corporate Bond Index ETF or Vanguard International Bond Index Fund. It doesn't take very many mouse clicks. And it doesn't take any mouse clicks to figure out that people are making different decisions because of the low interest rates of bonds. They are speculating and bidding up the stock market, land and other commodities and even worse quite a few exotic financial instruments in a desperat...
by hazlitt777
Tue Jul 30, 2013 3:26 pm
Forum: Investing - Theory, News & General
Topic: Justice and Marc Faber
Replies: 7
Views: 1582

Re: Justice and Marc Faber

So for the record: interest rates are NOT 'artificially low'. There is no 'natural' level of interest rates. In fact on a Keynesian model, interest rates should now be negative, so they are too high. You're right. When you increase the money supply by over 85,000,000,000 a month through bond purchases by the Fed, there is no natural level of interest rates. If however, the money supply were stable, there would be a natural level of interest rate determined by people's time preferences and the relative supply of goods and services in society. Even money has a price. But since we live in a world where there is no natural level of interest rates, having an allocation to commodities is wise. I think that is part of what Marc Faber is saying no...
by hazlitt777
Tue Jul 30, 2013 3:18 pm
Forum: Investing - Theory, News & General
Topic: Homes as Investments?
Replies: 101
Views: 9645

Homes as Investments?

I wish more people would avoid the mistake of looking at their home as an investment, thus bigger being better. I think it would be better viewed as a consumer item, thus keeping our homes more modest, and so leading us to being a nation of greater real wealth.

I thought this article drives this home nicely:

http://www.slate.com/blogs/moneybox/201 ... _area.html
by hazlitt777
Sun Jul 28, 2013 10:37 pm
Forum: Investing - Theory, News & General
Topic: Justice and Marc Faber
Replies: 7
Views: 1582

Justice and Marc Faber

I found this interview thought provoking. (He has in other places mentioned he personally is invested 25% cash, 25% stocks, 25% gold and 25% real estate.)

He addresses in this 9 minute interview, amongst other things, the impact of artificially low interest rates especially upon the common man and his existence. I'm curious how others are investing to smooth out the "bubbly investing world" we seem to be in, or other comments upon his view of the world.

Hopefully this can be an interesting conversation.

http://www.youtube.com/watch?feature=pl ... uZ7o#at=20
by hazlitt777
Mon Jul 22, 2013 1:49 pm
Forum: Investing - Theory, News & General
Topic: [Sad news - Pat Larimore]
Replies: 225
Views: 26838

Re: [Sad news - Pat Larimore]

Dear Taylor,

You have my deepest condolances. And your son's video was a beautiful tribute.

peace be with you,
Joe
by hazlitt777
Fri Jul 19, 2013 3:46 pm
Forum: Personal Investments
Topic: Detroit Files for Bankruptcy: Impact on Vanguard Munis?
Replies: 19
Views: 3024

Re: Detroit Files for Bankruptcy: Impact on Vanguard Munis?

It is important to remember there are also other cities that have and can go bankrupt. Some are just not on the radar yet.
http://www.washingtonpost.com/blogs/won ... n-one-map/
by hazlitt777
Wed Jul 10, 2013 11:10 pm
Forum: Investing - Theory, News & General
Topic: bitcoin bust; bitcoin etf
Replies: 52
Views: 7595

Re: bitcoin bust; bitcoin etf

MindBogler wrote:In theory they have value because the supply is finite. The supply is currently growing asymptotically towards a larger, yet still finite supply.
Is there some contractual agreement with those who purchase them that the supply will only grow at that rate? Will it be enforced in the courts? It just seems to open to fraud.
by hazlitt777
Wed Jul 10, 2013 11:06 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on adding Vanguard Precious Metals and Mining Fund
Replies: 44
Views: 12092

Re: Thoughts on adding Vanguard Precious Metals and Mining F

brianplycatu wrote:This fund is wonderful. I use it for tax loss harvesting and so far I have offset a good chunk of this year's realized stock gains and hope to extend into 2014. I sell it then buy GTX which is down 30% from when I purchased it. Traders should pay me as a reverse barometer.
Better to go with gold bullion:>)
by hazlitt777
Wed Jul 10, 2013 11:05 pm
Forum: Personal Consumer Issues
Topic: Road trip ideas
Replies: 30
Views: 3397

Re: Road trip ideas

I've always found the DK publishing books helpful.

http://www.amazon.com/dp/0756685559

In my state, I found some good "road trip" guidebooks. You might be able to do the same out there.
by hazlitt777
Sat Jun 29, 2013 8:16 pm
Forum: Investing - Theory, News & General
Topic: My Take on Gold
Replies: 213
Views: 28208

Re: My Take on Gold

stevewolfe wrote:You left out dividends in your calculation of stock market losses... And you rounded up...
The dividends included, my point still stands. And far as rounding up...I was unbiased in my rounding.
by hazlitt777
Sat Jun 29, 2013 3:11 pm
Forum: Investing - Theory, News & General
Topic: Is Technical Analysis a Waste of Time?
Replies: 66
Views: 16069

Re: Is Technical Analysis a Waste of Time?

Burton Malkiel does a good job covering the issue of Technical Analysis in his book, A Random Walk Down Wall Street.

I'm not really a fan of technical analysis. It would take a lot of time to apply and it still strikes me as highly subjective. But it is kind of entertaining listening to people try to apply the method. But I wouldn't trust it.