My Take on Gold

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Re: My Take on Gold

Postby momar » Fri Jun 28, 2013 4:41 pm

dnaumov wrote:
momar wrote:
dnaumov wrote:How on earth are you people giving gold a "fair value" of 600$ when marginal production costs are above 1200$?

What fraction of the world gold supply is produced each year? Does gold mined hundred or thousands of years ago degrade?

Demand for physical is not exactly drying up, quite the contrary.

This must be why the price has shot past 2000, right?
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Re: My Take on Gold

Postby Ged » Fri Jun 28, 2013 5:28 pm

Here's an article about cost of production for Goldcorp and Barrick.

http://www.bloomberg.com/news/2013-02-2 ... ities.html

The thing with gold is that it has very few utilitarian applications so average cost of production isn't really a price floor.
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Re: My Take on Gold

Postby graveday » Fri Jun 28, 2013 11:55 pm

Someone named Ferri should be giving a take on iron.

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Re: My Take on Gold

Postby dnaumov » Sat Jun 29, 2013 4:00 am

Rick Ferri wrote:
umfundi wrote:
dnaumov wrote:How on earth are you people giving gold a "fair value" of 600$ when marginal production costs are above 1200$?

Yes, an article on Yahoo says that the cost of production at many mines is $1000 - $1200 per ounce.

Keith


It's a mistake to assume that the price of gold cannot drop below the cost of production. This happens in the metals markets quite often. BTW, I read elsewhere that inefficient miners cost of production is $900 per ounce and that efficient miners are still producing an ounce of gold below $700 per ounce.

Rick Ferri

My point wasn't that it can't drop below below the cost of production, because for a lot of miners, that has already happened. My point is that it's not sustainable.

momar wrote:
dnaumov wrote:
momar wrote:
dnaumov wrote:How on earth are you people giving gold a "fair value" of 600$ when marginal production costs are above 1200$?

What fraction of the world gold supply is produced each year? Does gold mined hundred or thousands of years ago degrade?

Demand for physical is not exactly drying up, quite the contrary.

This must be why the price has shot past 2000, right?


Don't be naive. It's not at all an impossibility to have strong and increasing demand while simultaenously have the price in a downward trend. Perfect supply/demand/price corellations exist only in academic books, but not the real world. Try calling up a few vendors of physical gold. You will find they are backlogged for 2-4 weeks, while under normal conditions you'd have a wait of maybe 2-3 days.
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Re: My Take on Gold

Postby stevewolfe » Sat Jun 29, 2013 8:08 am

dnaumov wrote:Don't be naive. It's not at all an impossibility to have strong and increasing demand while simultaenously have the price in a downward trend. Perfect supply/demand/price corellations exist only in academic books, but not the real world. Try calling up a few vendors of physical gold. You will find they are backlogged for 2-4 weeks, while under normal conditions you'd have a wait of maybe 2-3 days.


They are backlogged 2-4 weeks because their business model is based on the spread of buy at spot - x% and sell at spot + y%. When the price is volatile they are carrying less and less inventory and the spreads are increasing (for example, most of the year Apmex had 1oz silver for "as low as $2.49 over spot". A month or so ago when silver got whacked they had 1oz silver for "as low as $5.99 over spot").

Don't confuse a business model with a profit motive with demand.
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Re: My Take on Gold

Postby Investing is boring » Sat Jun 29, 2013 8:43 am

It is my opinion that gold bugs - which does NOT include those who have a % allocation in thier IPS and have not increased that allocation during the bubble (PP folks etc.) - are FAR deeper into cognitive dissonance and confirmation bias than nearly any other "cult investment group" i have seen. Perhaps the Dot-bomb'ers back in 2000 have them trumped. Maybe!
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Re: My Take on Gold

Postby hazlitt777 » Sat Jun 29, 2013 4:07 pm

momar wrote:
dnaumov wrote:
momar wrote:
dnaumov wrote:How on earth are you people giving gold a "fair value" of 600$ when marginal production costs are above 1200$?

What fraction of the world gold supply is produced each year? Does gold mined hundred or thousands of years ago degrade?

Demand for physical is not exactly drying up, quite the contrary.

This must be why the price has shot past 2000, right?


Just remember that the drop from 14,100 to approximately 6800 in the DJIA was a 52% drop in stocks in 2007-8. The drop in gold from around 1900 to around 1200 was a drop of 37% from 2011 till now. We shouldn't make investment and diversification decisions on short term market girations.

But it looks like those who don't use gold as part of their diversified portfolio will certainly have their day in the sun this year.

I just wonder when this roller coaster will be coming for bonds and stocks. I'm comfortable where I am. To each their own.
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Re: My Take on Gold

Postby stevewolfe » Sat Jun 29, 2013 4:51 pm

You left out dividends in your calculation of stock market losses... And you rounded up...
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Re: My Take on Gold

Postby hazlitt777 » Sat Jun 29, 2013 9:16 pm

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.
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Re: My Take on Gold

Postby Clive » Sun Jun 30, 2013 10:33 am

hazlitt777 wrote:But it looks like those who don't use gold as part of their diversified portfolio will certainly have their day in the sun this year.

Those that do use gold might also have had some time in the sun recently (6 month 100%+ gain from using gold).

Image

Stocks during the roaring 20's doubled and doubled again and more. Japan 1980's stock doubled and doubled again and more. US/UK 1990's stocks had strong gains. Subsequent to each of those hard-and-fast gains things ... 'corrected'.

During 2000's gold doubled and doubled again and more....

Let the trend be your friend.
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Re: My Take on Gold

Postby baw703916 » Sun Jun 30, 2013 10:43 am

Clive wrote:
hazlitt777 wrote:But it looks like those who don't use gold as part of their diversified portfolio will certainly have their day in the sun this year.

Those that do use gold might also have had some time in the sun recently (6 month 100%+ gain from using gold).

Image

Stocks during the roaring 20's doubled and doubled again and more. Japan 1980's stock doubled and doubled again and more. US/UK 1990's stocks had strong gains. Subsequent to each of those hard-and-fast gains things ... 'corrected'.

During 2000's gold doubled and doubled again and more....

Let the trend be your friend.


I still don't like the volatility drag from the leveraged funds, though. So I bought put options on GLD (and some calls while the bubble was still inflating). Only with an insignificant portion of my portfolio, but my Roth IRA is increased in value by about 5% from doing this over the past 2.5 years.
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Re: My Take on Gold

Postby momar » Sun Jun 30, 2013 10:57 am

hazlitt777 wrote:
momar wrote:
dnaumov wrote:
momar wrote:
dnaumov wrote:How on earth are you people giving gold a "fair value" of 600$ when marginal production costs are above 1200$?

What fraction of the world gold supply is produced each year? Does gold mined hundred or thousands of years ago degrade?

Demand for physical is not exactly drying up, quite the contrary.

This must be why the price has shot past 2000, right?


Just remember that the drop from 14,100 to approximately 6800 in the DJIA was a 52% drop in stocks in 2007-8. The drop in gold from around 1900 to around 1200 was a drop of 37% from 2011 till now. We shouldn't make investment and diversification decisions on short term market girations.

But it looks like those who don't use gold as part of their diversified portfolio will certainly have their day in the sun this year.

I just wonder when this roller coaster will be coming for bonds and stocks. I'm comfortable where I am. To each their own.

What is your point? Is there somewhere I posted that "No, actually in 2007-8 demand for stocks was still going up!"?
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Re: My Take on Gold

Postby LondonJimmy » Wed Jul 03, 2013 6:36 am

Great article from 1976 when gold lost 50% from its highs. The usual sentiment in the media about gold, and then gold went to hit new highs...


"Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.

The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.

Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course. The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare
"
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Re: My Take on Gold

Postby Clive » Wed Jul 03, 2013 8:14 am

The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.

Gold is like an undated zero coupon inflation bond - when real yields turn negative gold prices rise, when real yields turn positive gold declines.

Correlation of yearly T-Bill minus CPI % changes to gold % price changes since 1972 has been something like -0.6.

Being a 'undated bond', golds volatility is high (more so than a long dated inflation bond).

Opposite end to stocks which are like a undated variable coupon conventional bond (more volatile than long dated treasury bonds).

As in how you might shorten stocks duration by combining with some shorter dated treasury bonds (barbell) to yield intermediate bond (bullet) type risk rewards, so gold might be combined with shorter dated inflation bonds to shorten the duration.

One investor might opt for a portfolio comprised of a barbell structure - perhaps 15% gold, and as gold is more volatile than stocks in general opting to balance that with 15% above average volatility stocks (small cap value perhaps), 20% long dated treasury (higher weighting to account for lower volatility), 50% T-Bills (that are similar to short dated inflation bonds, and again lower volatility so higher weighting). Collectively that might broadly yield similar results to 100% in 5 year treasury (bullet).
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Re: My Take on Gold

Postby wshang » Wed Jul 03, 2013 2:42 pm

Rick Ferri wrote:Gold fell below $1,200 today, down from $1,900. Only $600 more to go and it will be at fair value!

Rick Ferri

Over the recent short term, an almost perfect rebalancing or purchasing signal for gold. I rebalanced my Aunt's PP on this day. :sharebeer
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Re: My Take on Gold

Postby Rick Ferri » Wed Jul 03, 2013 3:16 pm

wshang wrote:
Rick Ferri wrote:Gold fell below $1,200 today, down from $1,900. Only $600 more to go and it will be at fair value!

Rick Ferri

Over the recent short term, an almost perfect rebalancing or purchasing signal for gold. I rebalanced my Aunt's PP on this day. :sharebeer


That means you're down 12.4% since rebalancing because I started this bearish conversation on April 23 when gold was still over $1,400.

Or, are you saying your waited until my LAST post to rebalance on June 27? Why THAT particular post? I've also made several others. If I'm such a good "buy" signal, then you would have bought back on April 23 at $1,410 and lost money as a result. :wink: I don't think you're being completely honest here.

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Re: My Take on Gold

Postby technovelist » Wed Jul 03, 2013 3:34 pm

This conversation can be summed up very succinctly:

"gold bugs": You might want to consider having some gold in your portfolio because historically it has improved your risk/reward tradeoff.

"everyone else": Look how much gold has gone down this year. The bubble has burst! Ha ha ha ha ha!!!!

When "everyone knows" that gold is the best investment in the world, I'll consider that there may be a bubble.
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Re: My Take on Gold

Postby Rick Ferri » Wed Jul 03, 2013 3:37 pm

My gold wedding ring WAS the best investment in the world...and still is!

:D

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Re: My Take on Gold

Postby umfundi » Wed Jul 03, 2013 4:01 pm

Gold is like an undated zero coupon inflation bond - when real yields turn negative gold prices rise, when real yields turn positive gold declines.

Correlation of yearly T-Bill minus CPI % changes to gold % price changes since 1972 has been something like -0.6.

Does anyone have a graph or data for that?

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Re: My Take on Gold

Postby wshang » Wed Jul 03, 2013 4:25 pm

Rick Ferri wrote:
wshang wrote:
Rick Ferri wrote:Gold fell below $1,200 today, down from $1,900. Only $600 more to go and it will be at fair value! Rick Ferri
Over the recent short term, an almost perfect rebalancing or purchasing signal for gold. I rebalanced my Aunt's PP on this day. :sharebeer
:wink: I don't think you're being completely honest here. Rick Ferri

Honest? One only needs to see the date of your specific posting. Gleeful schadenfreude as well as frightened posts by terrified investors, when in multitude often signals capitulation. After all, the pricing of gold is as close to a purely human emotion driven endeavor - as it gets.
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Re: My Take on Gold

Postby ps56k » Wed Jul 03, 2013 4:56 pm

So - if we are looking to diversify, to help balance out the ups/down of a portfolio.....

Stocks vs Bonds - ok, they are supposed to counter each other, so we should have some bonds in our portfolio.
I have VBMFX, VWINX, and VWESX

Inflation - ok, for the eventual swing of the interest rate pendulum - maybe Vanguard TIPS fund.
I have VIPSX

Market weirdness - ok, have something with gold, along with canned goods, water, 12ga, ammo, and generator
I have the GLD etf, and the Perm Portfolio PRPFX fund - (and all the other stuff)

Does this thread suggest that I should jetison both the gold etf and the PP fund ?
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Re: My Take on Gold

Postby Rick Ferri » Wed Jul 03, 2013 6:06 pm

wshang wrote:
Rick Ferri wrote:
wshang wrote:
Rick Ferri wrote:Gold fell below $1,200 today, down from $1,900. Only $600 more to go and it will be at fair value! Rick Ferri
Over the recent short term, an almost perfect rebalancing or purchasing signal for gold. I rebalanced my Aunt's PP on this day. :sharebeer
:wink: I don't think you're being completely honest here. Rick Ferri

Honest? One only needs to see the date of your specific posting. Gleeful schadenfreude as well as frightened posts by terrified investors, when in multitude often signals capitulation. After all, the pricing of gold is as close to a purely human emotion driven endeavor - as it gets.


You did not answer my question. Why did you pick one specific post made a month after this conversation started to claim that it was "your day" to rebalance? It only makes sense if you're cherry-picking the date to make yourself look good because only on that specific day would you be showing a profit today.

Sorry, I don't believe you.

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Re: My Take on Gold

Postby Clive » Wed Jul 03, 2013 7:12 pm

umfundi wrote:
Gold is like an undated zero coupon inflation bond - when real yields turn negative gold prices rise, when real yields turn positive gold declines.

Correlation of yearly T-Bill minus CPI % changes to gold % price changes since 1972 has been something like -0.6.

Does anyone have a graph or data for that?

Keith

Not to hand, but if you graph using Simba's historic data for yearly T-Bill minus CPI and compare that to gold with one axis set to be reverse order.

I've this one online that shows 5 year averaged values

Image
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Re: My Take on Gold

Postby umfundi » Wed Jul 03, 2013 7:57 pm

Interesting. Thank you.

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Re: My Take on Gold

Postby wshang » Thu Jul 04, 2013 12:44 am

Rick Ferri wrote: Sorry, I don't believe you.
Rick Ferri

Image
Very disappointed to hear this coming from someone whom I bought books from. Note the absurd quote about predicting future prices below.
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Re: My Take on Gold

Postby Epsilon Delta » Thu Jul 04, 2013 10:07 am

technovelist wrote:This conversation can be summed up very succinctly:

"gold bugs": You might want to consider having some gold in your portfolio because historically it has improved your risk/reward tradeoff.


That's not a "gold bug", a true "gold bug" would insist that gold is up for the year. :twisted:
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Re: My Take on Gold

Postby umfundi » Thu Jul 04, 2013 10:16 am

Why is it with gold that we cannot just have a discussion? It seems that everyone wants others to share their beliefs. In Richard Feynman's words, "What Do You Care What Other People Think?"

Happy 4th, everyone!

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Re: My Take on Gold

Postby Rick Ferri » Thu Jul 04, 2013 2:57 pm

wshang

Congrats on your market-timing prowness. You still haven't said why you ignored all my bearish gold posts for the past 2 years at much higher prices before deciding to buy in June.

BTW, thanks for buying my books. I specifically do not recommend buying gold in them, but the book royalties do go to the wounded warriors. So, even if people ignore my advice, buying the books do help someone.

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Re: My Take on Gold

Postby wshang » Thu Jul 04, 2013 7:02 pm

It is not as if Rick Ferri is my anti-guru for gold. I used some Technical Analysis and note that Mr. Ferri presumably used that down day to post, presumably to compound the misery of those who own gold - a sentiment and timing meant to influence members of this forum NOT to buy gold.

What a perfect storm of bearish sentiment and TA! As Mr. Buffett says, "be greedy when others are fearful." :greedy
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Re: My Take on Gold

Postby Rick Ferri » Thu Jul 04, 2013 8:03 pm

I don't think the issue with gold is that people are fearful. That may have been why the price went up, but not why the price is coming down. In fact, its the LACK of fear that's taking the price back down.

At $1900 per ounce, the price was 3-times higher than it's inflation-adjusted average (as shown in the article). Now that people are less fearful of a global economic collapse, the price is down to only 2-times it's inflation adjusted average.

Eventually, gold will hit it's 3000 year inflation-adjusted price of around $500-$600 per ounce. It may take a few more years, but it will get down there. It always does. This time is not different.

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Re: My Take on Gold

Postby market timer » Thu Jul 04, 2013 8:08 pm

Rick Ferri wrote:At $1900 per ounce, the price was 3-times higher than it's inflation-adjusted average (as shown in the article). Now that people are less fearful of a global economic collapse, the price is down to only 2-times it's inflation adjusted average.

Real interest rates are still below the long term average.
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Re: My Take on Gold

Postby letsgobobby » Thu Jul 04, 2013 11:47 pm

wshang wrote:
Rick Ferri wrote: Sorry, I don't believe you.
Rick Ferri

Image
Very disappointed to hear this coming from someone whom I bought books from. Note the absurd quote about predicting future prices below.

good, but did you buy in 2001???


07/15/2008
Precious Metals & Mining Exchange From – 1,471.021 $33.99 – $50,000.00

01/29/2007
Precious Metals & Mining Exchange To 866.282 $28.23 $24,455.13

05/08/2006
Precious Metals & Mining Exchange From – 223.017 $32.58 – $7,265.89

01/10/2005
Precious Metals & Mining Exchange To 377.121 $15.91 $6,000.00

06/13/2002
Precious Metals & Mining Exchange To 91.663 $11.58 $1,061.46

07/31/2001
Precious Metals & Mining Exchange To 91.384 $7.66 $700.00

05/21/2001
Precious Metals & Mining Exchange To 153.509 $9.12 $1,400.00
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Re: My Take on Gold

Postby ps56k » Fri Jul 05, 2013 3:56 am

I always wondered about the demographics of the group.
The transaction investment numbers above don't seem to be all that much,
so these dragged out threads appear more and more like academic jausting in a classroom...
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Re: My Take on Gold

Postby letsgobobby » Fri Jul 05, 2013 9:50 am

More like playground boasting than classroom jousting. ;)
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Re: My Take on Gold

Postby wshang » Fri Jul 05, 2013 10:16 am

letsgobobby wrote:More like playground boasting than classroom jousting. ;)

Not really. More like an authored member of BH calling another member a liar. Made me almost sorry I rose to defend myself.

Agree, the original posting is pointless. It is much like someone posting an article predicting bonds and stocks will both go down with Fed deleveraging and mocking the BH strategy when it happens. Investing is not without risk, we all have our own situations and although it might be difficult to understand, sometimes owning gold makes sense.
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Re: My Take on Gold

Postby ps56k » Fri Jul 05, 2013 1:06 pm

Here's my simple view on how things should work/look - with any kind of diversity -

The simple bond fund - VBMFX - just kinda plods along, until recently of course,
but the major swings are shown between Gold/GLD and the total stock market VTSMX.

So the question becomes, what other Vanguard fund would mimic the contra-stock curves vs gold ?
BTW - I was surprised that the Perm Portfolio fund - PRPFX - did not do more to balance out the drop in stocks,
and was itself, pretty negative in this 2 year example of ups/downs.

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Last edited by ps56k on Fri Jul 05, 2013 1:19 pm, edited 3 times in total.
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Re: My Take on Gold

Postby Rick Ferri » Fri Jul 05, 2013 1:08 pm

wshang,

I believe you. And I believe you had better sell now while you still have a profit! :wink:

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Re: My Take on Gold

Postby wshang » Mon Jul 08, 2013 11:53 am

Rick Ferri wrote: And I believe you had better sell now while you still have a profit! -Rick Ferri

Of course I have put my money where my mouth is. Why don't you short GLD/IAU for your clients and ride the sure-to-come profit?

At this point, aren't (we) market timing or trying to predict future market movement? At least I am doing it as part of an overall Permanent Portfolio strategy rebalancing.
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Re: My Take on Gold

Postby brianplycatu » Mon Jul 08, 2013 2:09 pm

HardKnocker wrote:Diamonds are more easily carried when you flee the Nazis to Switzerland. Gold is darn heavy.


ha ha or a Nazi fleeing to South America. Laurence Oliver 9X, "Is it safe?" Dustin Hoffman, "Yeooooooow!"
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Re: My Take on Gold

Postby wshang » Thu Aug 15, 2013 1:52 pm

Rick Ferri wrote:I believe you had better sell now while you still have a profit! Rick Ferri

Is it time to get the he** out of gold yet? The beating has got to stop soon . . . . IAU from 11.719 to 13.24 - I don't know how much more of this I can take!
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Re: My Take on Gold

Postby Clearly_Irrational » Thu Aug 15, 2013 2:00 pm

wshang wrote:
Rick Ferri wrote:I believe you had better sell now while you still have a profit! Rick Ferri

Is it time to get the he** out of gold yet? The beating has got to stop soon . . . . IAU from 11.719 to 13.24 - I don't know how much more of this I can take!


Short term trends do seem to favor gold at this point but you're not actually trading off of that are you? One would hope that Bogleheads who own gold at least use a buy and hold strategy and have rules in their IPS about when they should or shouldn't be holding gold and how much.
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Re: My Take on Gold

Postby Oppous » Thu Aug 15, 2013 2:20 pm

I find it better to invest in gold indirectly. If you invest in funds that manage gold, you'll profit of its increase in value and not be hurt by storage costs.
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Re: My Take on Gold

Postby technovelist » Thu Aug 15, 2013 2:25 pm

Clearly_Irrational wrote:
wshang wrote:
Rick Ferri wrote:I believe you had better sell now while you still have a profit! Rick Ferri

Is it time to get the he** out of gold yet? The beating has got to stop soon . . . . IAU from 11.719 to 13.24 - I don't know how much more of this I can take!


Short term trends do seem to favor gold at this point but you're not actually trading off of that are you? One would hope that Bogleheads who own gold at least use a buy and hold strategy and have rules in their IPS about when they should or shouldn't be holding gold and how much.


I think wshang was being sarcastic. Since he mentioned the Permanent Portfolio, I imagine he keeps 25% in gold at all times.
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Re: My Take on Gold

Postby momar » Thu Aug 15, 2013 3:02 pm

I knew there was a reason my tailor was a little more chipper this morning.
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Re: My Take on Gold

Postby JoMoney » Thu Aug 15, 2013 5:01 pm

Oppous wrote:I find it better to invest in gold indirectly. If you invest in funds that manage gold, you'll profit of its increase in value and not be hurt by storage costs.

I don't like gold, but if I did buy it, it would be the physical kind. At least I'd be getting psychological dividends off of wearing some jewelry, having a coin collection, etc.. It is unfortunately, far more expensive to buy/sell gold this way, but at least it's a "buy and hold" approach and you get some benefit out of it.

When I imagine investing in a gold fund/ETF, I imagine a giant vault of gold bricks and everyday a guy walks in and scrapes some sliver of it off and calls it an "expense ratio". Eventually it would wither down to nothing. I doubt that the fees would take it all away in my lifetime, but the idea of it gives me a negative dividend.
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Re: My Take on Gold

Postby wshang » Thu Aug 15, 2013 11:10 pm

Seriously though, it is the Chinese and Indians who now buy gold. In this WSJ article, the former "China, where consumers account for roughly a quarter of global gold demand, hit a record 385.5 metric tons in the second quarter, according data released Monday by the state-backed China Gold Association". Many Chinese believe the government under reports inflation. For them, it is a necessary storehouse of value. Gold nor anything else need not necessarily be viewed through the American lens.

http://online.wsj.com/article/SB1000142 ... 37550.html
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Re: My Take on Gold

Postby Rick Ferri » Fri Aug 16, 2013 5:17 am

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?

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Re: My Take on Gold

Postby Methedras » Fri Aug 16, 2013 6:46 am

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?


Just to play devil's advocate, one shouldn't be asking the question about "...when they stop buying?" as if it were a foregone conclusion. In fact, we can't be at all certain this will occur, and there is even a good chance that the economies of these nations could continue to grow at rates faster than the US & European nations. In that case, isn't there a decent chance that the rate of gold buying in China and India will increase?

I'm not offering a prediction, merely cautioning against trying to make one. We simply can't know.
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Re: My Take on Gold

Postby abuss368 » Fri Aug 16, 2013 11:18 am

Many of the investment experts I follow such as Jack Bogle, David Swensen, Warren Buffett, and Rick Ferri do not recommend gold, silver, and other commodities as an investment. I attended a lecture of David Swensen's and he was very vocal against investing (or as he called it "speculating" in this asset class). Warren Buffett penned an excellent section in his annual shareholder letter on why he does not like gold. I would encourage anyone to take the time to read the letter.

I follow the path of these investment experts.
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Re: My Take on Gold

Postby Phineas J. Whoopee » Fri Aug 16, 2013 11:50 am

wshang wrote:Seriously though, it is the Chinese and Indians who now buy gold. ...
http://online.wsj.com/article/SB1000142 ... 37550.html

The article you cited is about China; here's one on India: Reuters: India turns screw again on gold imports

The Indian government, facing a severe balance of payments problem, is increasingly restricting gold imports. Whether new rules will raise prices enough to curb demand; or to encourage smuggling; or I would guess a little of both; remains to be seen. In any event, it is only one of several actions India is taking to support its currency.

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