Search found 276 matches

by Gumby
Sun Aug 25, 2013 1:03 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14685

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

Ah, so all this discussion over the semantics of whether gold is officially designated as an "investment" or a "hedge" is just to determine if it satisfies the strict requirements of Rick's own rule book?

Not trying to be rude or anything, but why does anyone even care if gold doesn't fit that narrowly defined rule set or not? It's not like the rules are set in stone or some kind of proven investment law. I'm sure they are excellent rules, but clearly there are legitimate purchases in the investment world that fall outside those strict guidelines (such as any hedge).
by Gumby
Fri Aug 23, 2013 11:05 am
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14685

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

The question asked is whether gold is an investment or a hedge? An investment is expected to earn in a return in excess of the inflation rate from income and/or real growth. A hedge reduces the chance of a loss from another investment. A hedge might also be an investment if it also appreciates in real price and/or provides cash flow in excess of the inflation rate. Buying gold, holding currencies, or burying money in the yard is a hedge against loss also, but they're not investments because there is no expectation of a real return. You're right, Gold is a hedge. But, so what? Who cares if gold is officially classified as an "investment" or not? The fact of the matter is a hedge can be very useful in a portfolio. You make it sound...
by Gumby
Fri Aug 23, 2013 6:49 am
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14685

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

Do you want to hold foreign cash? For what purpose? That's not an investment. It's may be a hedge against a drop in the US dollar, but that's more like insurance than an investment. You are 100% correct. I hold gold as a hedge against a drop in the US dollar (for me, it's a component of my Permanent Portfolio). I could care less if my gold is officially designated as an "investment" or not. If you say you're buying gold as insurance and not as an investment, then that might make sense to some degree providing is fungible in a US dollar crisis (you can trade it for other goods). That being said, how would you do this? Would you buy an ETF or gold coins? An ETF is paper, it isn't gold. You can't trade it for other goods. And the ex...
by Gumby
Thu Aug 22, 2013 10:39 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14685

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

Rick Ferri wrote:The difference is that cash prices do not become excessively volatile like [gold]. Volatility is a risk that isn't paid for in commodities. Unlike stocks, commodities have high volatility but no real return.
But, wouldn't foreign cash be volatile? I see holding Gold as basically like holding foreign cash.
by Gumby
Thu Aug 22, 2013 1:30 pm
Forum: Investing - Theory, News & General
Topic: Gold and DJIA: What is going on?!
Replies: 137
Views: 14685

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

Gold is Money, Get Over It... http://pragcap.com/gold-is-money-get-over-it I would never say gold is not money. But I think Dylan Grice made a good example in his story when he asked: "But inhabitants of Norway can’t use Japanese Yen to buy things either. Does that mean Yen isn’t money?" Yen is definitely money. Even in Norway. But it’s a crappy form of money for most Norwegians because it has to be converted into Krone before it can be used to buy most goods and services. Gold is similar. Yes, it’s money in the USA and in any other country, but it has to be converted into notes, coins or deposits before it can be used to buy goods and services. So it’s money, but it’s a crappy form of money for all practical purposes. Source: htt...
by Gumby
Tue Aug 20, 2013 12:39 pm
Forum: Investing - Theory, News & General
Topic: Other Investment Strategies
Replies: 39
Views: 5803

Re: Other Investment Strategies

if's, but's and maybe's - they're all part of due diligence risk analysis. Yes, but your if's, buts and maybes are way too unrealistic. Nobody was buying Marks in 1923. And people would thought you were insane if you trading your gold for Marks by mid-1922, when things got really bad. If you left a wheelbarrow of Marks on the street in late 1922, people would have stolen the wheelbarrow and left the cash. "The successful man in Germany is the one who converts his money into property with the greatest rapidity. This situation is forcing the inflation of prices and ages with great rapidity." John Moody : President of "Moody's Investors' Services, September 4, 1921 Source: http://query.nytimes.com/mem/archive-free/pdf?res=F20B1...
by Gumby
Sun Aug 18, 2013 6:01 pm
Forum: Investing - Theory, News & General
Topic: Other Investment Strategies
Replies: 39
Views: 5803

Re: Other Investment Strategies

Might...under exceptional circumstances...might...or maybe...might be endured...could be...it might subsequently...at which time you might...Potentially...could be...might be...Whilst you might...perhaps not...who might...perhaps less likely...Perhaps. While you raise some valid technical points in your extreme hypothetical, I'm willing to bet you could string a bunch of "mights," "perhaps" and "maybes" to bring down every portfolio ever known to mankind. Furthermore, no sane person would ever sell their gold for worthless fiat money once hyperinflation was underway. Do you really think anyone in Weimar was actively choosing to trade their gold for fiat money that was being hyperinflated by the hour? No way. G...
by Gumby
Thu Dec 01, 2011 10:55 am
Forum: Investing - Theory, News & General
Topic: Can Someone Suggest a Quality Politics/Economics Forum?
Replies: 16
Views: 2071

Re: Can Someone Suggest a Quality Politics/Economics Forum?

I started Politonomics.org , back in March, specifically for Bogleheads to discuss politics and economics. It was an experiment to see if Bogleheads could discuss these topics in a civil manner. The experiment was a success — we never had any serious issues and the discussions were (and still are) quite interesting and thought provoking. The only problem was that only a few people joined the site. However, those few people have become rather dedicated users. I had hoped that Bogleheads (and Bogleheads moderators) would attempt to steer more banned discussions over to Politonomics.org , but that idea never seemed to gain any traction. Truthfully, I've found Bogleheads an incredibly frustrating place to discuss the current economic outlook. S...
by Gumby
Wed Nov 30, 2011 9:18 am
Forum: Investing - Theory, News & General
Topic: Central banks to the rescue?
Replies: 22
Views: 2153

Re: Central banks to the rescue?

We are printing Euros now. :lol: Actually no. All this does is prevent a dollar shortage for worldwide banks that have on-balance sheet positions in foreign currencies, particularly in US dollars. The swap lines also help keep US interest rates low as everyone in the world clamors for dollars. This is what the Fed did in 2008. We are repeating 2008 all over again. Doesn't this part give them a green light to do euros too? Are you suggesting that the Fed has a printer that prints Euros? Last time I checked, the Fed only knew how to print US dollars. The Fed prints dollars and central banks can exchange Euros for those dollars. http://www.federalreserve.gov/monetarypolicy/bst_swapfaqs.htm#5631 Who is printing Euros? Nobody, just yet.
by Gumby
Wed Nov 30, 2011 8:48 am
Forum: Investing - Theory, News & General
Topic: Central banks to the rescue?
Replies: 22
Views: 2153

Re: Central banks to the rescue?

BigD53 wrote:We are printing Euros now. :lol:
Actually no. All this does is prevent a dollar shortage for worldwide banks that have on-balance sheet positions in foreign currencies, particularly in US dollars. The swap lines also help keep US interest rates low as everyone in the world clamors for dollars. This is what the Fed did in 2008. We are repeating 2008 all over again.
by Gumby
Wed Nov 30, 2011 8:21 am
Forum: Investing - Theory, News & General
Topic: Central banks to the rescue?
Replies: 22
Views: 2153

Re: Central banks to the rescue?

All this does is massively help the liquidity problems of banks. It does not completely solve the liquidity problems of the banks, and it certainly doesn't fix the solvency problems of banks. It's a short term fix. Europe is still broken. Risk assets will surge for the short term. No one is predicting what will happen long term, but the Fed's action suggests that the situation is very bad.

At first look, this seems to have bought Europe an extra week of time. In fact, the EUR-USD swap funding market currently shows that this announcement only put stress levels back to where they were a week ago.
by Gumby
Mon Nov 28, 2011 1:07 pm
Forum: Investing - Theory, News & General
Topic: On the current crisis
Replies: 202
Views: 16908

Re: On the current crisis

The FDIC works great when a handful of small banks collapse. However, the FDIC would easily need more funding if there was a run on the banks. Why? Because only a binding resolution from Congress can fully fund the FDIC. And up until now, Congress has only issued a non-binding resolution to stand behind the FDIC. And if there were a run on the banks, a bill to fully fund the FDIC would most likely come at a time when the budget was in horrible shape and Congress was gridlocked. So, even if funding the FDIC was totally necessary, there's no guarantee that a majority of Congress would pass the bill to fully fund the FDIC... or guarantee that everyone would get back 100¢ on the dollar. Treasuries have virtually no risk to them because the US T...
by Gumby
Wed Nov 23, 2011 10:37 am
Forum: Investing - Theory, News & General
Topic: On the current crisis
Replies: 202
Views: 16908

Re: On the current crisis

Larry, it was only a month ago that you said the following: http://www.bogleheads.org/forum/viewtopic.php?f=10&t=83938&p=1202903#p1202472 First they assume that I did not check at all about US bank exposure. The key is mostly sovereign debt exposure, not so much bank exposure, at least IMO. And even that is to only the few really weak countries. Ireland not really a problem I believe. And even Spain has only debt to GNP ratio of something like 60%, way below crises levels. Second, I did not make any statements about being optimistic or pessimistic about the outcome, though being an optimist is a lot better way to go through life Third, the amount of gross exposure is pretty much irrelevant as some of it is offset, if not much of it,...
by Gumby
Tue Nov 22, 2011 9:57 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

I'm guessing I'll probably be pretty rich because of my stocks and the great stock bull market of 2020-2040 (1 billion people entering the middle class over the next 20-30 years in China and India will buy a LOT of stuff)... but maybe I'm wrong about stocks. So I also have CDs and I-bonds, and corporate bonds, and some gold and silver. China will have a large aging population problem, due to its "One Child" program. http://www.alsosprachanalyst.com/wp-content/uploads/2011/01/image28.png Japan already has an aging population and it's highly deflationary. http://www.alsosprachanalyst.com/wp-content/uploads/2011/01/image29.png India is where all the demographic growth is. But, will they be stable enough to prosper? http://www.alsosp...
by Gumby
Mon Nov 21, 2011 6:05 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

Here's how US stocks have done versus Gold, YTD

Image

...and while we're comparing safe havens, here is how Gold performed against 30-year Treasuries, YTD:

Image
by Gumby
Mon Nov 21, 2011 4:02 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: What can happen this year?

rrosenkoetter wrote:How about 1981 to today?
Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 7.12%
rrosenkoetter wrote:How about July, 2002 to today?
Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 2.39%
rrosenkoetter wrote:How about March 2009 to today?
Average Annual Rate of Return (inflation-adjusted and fully reinvesting dividends) = 20.53%

Source: Investing Through Time
by Gumby
Mon Nov 21, 2011 2:07 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: What can happen this year?

manuvns wrote:form the end of 1998 the till today the returns/CAGR are close to 1.8% . you can do better with a CD .
Actually, it's worse than that. Fully reinvesting dividends and adjusting for inflation on yields about a 0.28% return over the same 13 year period. And that's before taxes.

See: Investing Through Time Calculator
by Gumby
Mon Nov 21, 2011 10:18 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

The epic saga continues...

Image
by Gumby
Mon Nov 21, 2011 10:07 am
Forum: Investing - Theory, News & General
Topic: Is There A Counter Argument To Cramer's DOW 8000
Replies: 28
Views: 4343

Re: Is There A Counter Argument To Cramer's DOW 8000

We are witnessing the collapse of a major currency. There is no solution to the crisis. If there was a solution, it would have been conceived by now.
by Gumby
Fri Nov 18, 2011 9:13 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

I think the biggest scam is the ignorance about this truth you bring up. The United States needs to maintain deficit spending if it hopes have net private sector saving and a growing economy. Government surplus are not sustainable. It is disgusting for me to hear politicians talk about our "debt problem." They just haven't had a serious philosophical introspection for longer than 5 minutes in their life... If they just thought about our system, how it actually functions, they would realize that surpluses should only be used very sparingly and are neither "good" nor "bad." Hmmm, Greek debt-to-GDP is about 170%, at least before their "voluntary" default. Why isn't their economy doing great? They've had...
by Gumby
Fri Nov 18, 2011 8:05 pm
Forum: Personal Investments
Topic: I know... Don't try to time... But...
Replies: 35
Views: 4510

Re: I know... Don't try to time... But...

I've been interested in the PP. Problem is, I don't know if I could get on board with the gold part right now. What do you think about the PP fund version? The 4x25 PP is less volatile than PRPFX, with very similar returns. When done properly, the 4x25 PP has extremely low expenses. Unfortunately, PRPFX still has its Swiss Franc exposure (which is now pegged to the Euro), and the fund manager can't change the allocation without shareholder approval. Other than that, PRPFX is a great fund, but my feeling is that the 4x25 PP is a much better long term strategy. Here's a comparison of the 4x25 vs PRPFX through the 2008 crisis: http://dl.dropbox.com/u/778166/Permanent%20Portfolio/PRPFX-PP-Comparison.gif When you buy into the 4x25 PP, you have ...
by Gumby
Fri Nov 18, 2011 11:47 am
Forum: Personal Investments
Topic: Interview with Kyle Bass-founder Hayman Capital Hedge Fund
Replies: 7
Views: 1588

Re: Interview with Kyle Bass-founder Hayman Capital Hedge Fu

I prefer the full YouTube version.

http://youtu.be/K-F_QF1XTXI

My favorite quote from the video:
"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"
by Gumby
Fri Nov 18, 2011 10:25 am
Forum: Personal Investments
Topic: I know... Don't try to time... But...
Replies: 35
Views: 4510

Re: I know... Don't try to time... But...

The other day I was looking at an article about the crisis, and the market had a pretty bad day, because they said some guys I've never heard of before in my life, in a country a tiny fraction the size of mine, were voting on something. So its obvious that this is short term noise. Lehman brothers, a $639 billion company was minuscule compared to the trillions of wealth it destroyed in less than a year's time. It did far more damage than anyone had priced in. We are still feeling the affects of the Lehman moment. Anyone who thinks a Greek default — which is inevitable — is already priced into the market is delusional. Anyone who thinks Europe can be fixed, when investment banks are leveraged 80 to 1, is delusional. Italy is cannot sustain ...
by Gumby
Fri Nov 18, 2011 10:00 am
Forum: Personal Investments
Topic: I know... Don't try to time... But...
Replies: 35
Views: 4510

Re: I know... Don't try to time... But...

Or, you could devise a portfolio that performs moderately well no matter what the outlook is.

For instance (and this is just one example), despite all the constant news of downgrades and sovereign debt issues, a 4x25 Permanent Portfolio has had very steady returns with low volatility the entire time.

Image

VSMGX = Vanguard LifeStrategy Moderate Growth Fund (VSMGX holds approximately 65% of its assets in stocks a portion of which is allocated to international stocks) and the remainder in bonds and short-term reserves.)
by Gumby
Thu Nov 17, 2011 11:03 pm
Forum: Personal Investments
Topic: Betting against
Replies: 19
Views: 1769

Re: Betting against

As a serious answer to your question, I recommend listening to the recent Kyle Bass interview with the BBC about shorting the financial crisis:

http://www.youtube.com/watch?v=K-F_QF1XTXI
by Gumby
Wed Nov 16, 2011 1:30 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

But that's not how loans work. We are talking about a fractional-reserve banking system — where money is created out of thin air. Every loan that's ever been procured by a bank is money being added to the money supply that didn't previously exist . Is this actually true? Fractional reserve banking is loaning out a fraction of the money that somebody else deposited. So it's not money created out of thin air, it's money repeatedly deposited and lent out. Each borrower pays interest, but each lender receives interest. Are you arguing that the fractional reserve banking system doesn't increase the money supply? In the following example, $357.05 in new loans are created from an initial $100 deposit. (i.e. banks created $357.05 in M1, from a sin...
by Gumby
Wed Nov 16, 2011 9:02 am
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

Here is how I can repay 110 credits when only 100 credits exist (and you start out holding all of them), without anyone else or any other money supply being involved: Step 1: You lend me 100 credits (now I have 100 credits, you have 0 credits, and with interest I owe 110 credits) Step 2: I buy some bright lights from you for 45 credits (now I have 55 credits, you have 45 credits, and I owe 110 credits) Step 3: I repay 55 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 55 credits) Step 4: I use the lights to grow some marijuana Step 5: I sell the marijuana to you for 55 credits (now I have 55 credit, you have 45 credits, and I owe 55 credits) Step 6: I repay the remaining 55 credits (now I have 0 credits, yo...
by Gumby
Tue Nov 15, 2011 8:59 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

I must be missing something. I can see how continuously borrowing and repaying with interest would require continuously producing more wealth. But I can't see why that would require continuously creating more money. The same quantity of money could be used over and over to facilitate the exchange of non-money forms of wealth back and forth between lenders and borrowers. But that's not how loans work. We are talking about a fractional-reserve banking system — where money is created out of thin air. Every loan that's ever been procured by a bank is money being added to the money supply that didn't previously exist . Not only did that money not exist previously, but that loan must be paid back with money plus interest. So, how do you pay back...
by Gumby
Tue Nov 15, 2011 8:06 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

Do these tools have a value? Are they worth anything? Yes Are they 'money'? No, they are just valuable tools. In your example of with the credits: last year there were 100 credits and nothing else. This year there are 100 credits and hundreds of tools. And people are willing to pay me a credit for each tool. How many credits are really available? Is this supposed to be a trick question? There are still 100 credits. Can I pay back the interest on borrowed credits with the original credits and a tool? No. Only 100 credits exist. Where are you going to find more credits? What if I sell all of my tools to another country, and they pay me in 'eurocredits'. How many credits are now in this country? 100 credits and some Eurocredits. What's your p...
by Gumby
Tue Nov 15, 2011 2:08 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Re: Is Interest a Scam?

GregLee wrote:I don't understand the problem. You ask "how do we pay the interest?" and then provide the answer "more public or private debt is needed." Asked and answered.
Then I suppose the only "problem" is that most people don't understand that the money supply is entirely composed of debt and that more debt is constantly required to pay every loan. At the moment, the people who issue the public/private debt don't want to issue more of it.
by Gumby
Tue Nov 15, 2011 1:07 pm
Forum: Investing - Theory, News & General
Topic: Is Interest a Scam?
Replies: 49
Views: 4925

Is Interest a Scam?

When our country was on a Gold Standard, our money was a paper representation of our gold reserves. And if the country didn't ever have enough gold, we issued bonds to borrow money — and we would owe a debt. Makes sense. Since 1972, the US Dollar has been a purely fiat currency with a free-floating exchange rate. However, Congress never changed the laws for issuing currency and Treasury Bonds are still, to this day, necessary if the U.S. Treasury wants to spend or create money it doesn't have. In other words, as the laws are currently written, the only money that the United States Treasury can freely issue are coins. But, other than coins, the U.S. Treasury may not create or spend any new money that isn't offset by the issuance of Treasury ...
by Gumby
Thu Nov 10, 2011 7:45 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

umfundi wrote:So you did not personally profit from this opportunity?
Me? I just read about the €uro zone to stay informed, mostly for entertainment. My 4x25 Permanent Portfolio tends to have steady profits, with very low volatility, regardless of what good or bad things are happening in the world. I don't check it very often, but let's see... Yep. I'm doing just fine. +13.5% YTD.
by Gumby
Wed Nov 09, 2011 10:31 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

umfundi wrote:And so, can you show us the people who became very rich by not ignoring the obvious math? In the last three weeks? What investments did they buy or sell mid-October?
Yep...

http://www.zerohedge.com/news/timberx

And, of course, anyone who shorted French or Italian bonds has done very well.

http://www.zerohedge.com/news/ecb-buyin ... ginot-line
umfundi wrote:What did you do about the link you quote?
I read it. Understood it. And realized that most investors with stock-heavy portfolios are delusional that Europe will resolve itself without a €2 or €3 Trillion EFSF — which it doesn't have and won't be able to raise through external funding.
by Gumby
Wed Nov 09, 2011 7:11 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

All the evidence you cite is known. In an efficient market, that knowledge must be reflected in the current price. I don't believe the market is as efficient as you imagine it to be. If it was, it would have seen this coming weeks ago. Many people figured out that the latest Euro plan couldn't possibly work — over three weeks ago — using some very straightforward math... There Is No Bailout Spoon: The Math Behind The €2 Trillion EFSF Reveals A "Pea Shooter" Not A "Bazooka" (10/18/2011) So, three weeks ago, the math revealed that the EFSF needed to be able to backstop about €3 Trillion to stop a full-blown crisis from unfolding — rather than the €440 billion unworkable plan that the market rallied on. The HFT algos ralli...
by Gumby
Wed Nov 09, 2011 3:32 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 36221
Views: 4684465

Re: U.S. stocks in freefall

The downside of a bad outcome of the Greek crisis is what? $100 billion? (1/3 of their GDP?) 1 trillion over the next ten years? I don't know what is driving the US market's direction and volatility, but I doubt it is the reality of the situation in Greece (or Italy). The European situation is far more serious than you make it out to be. What you are not considering is that a Greek and Italian default would cause French banks to implode. French bonds are already reacting violently to this possibility. That would easily trigger a French downgrade and then all hell breaks loose, to the tune of trillions of Euros as banks begin to fail across the Eurozone — which could feasibly spread to other continents. How US Banks Are Lying About Their Eu...
by Gumby
Tue Nov 08, 2011 12:06 pm
Forum: Personal Consumer Issues
Topic: What do you feed your dog?
Replies: 65
Views: 6581

Re: What do you feed your dog?

Some day, I'm going to work up the courage to just drop a raw chicken wing in the bowl and see what happens. :lol: What could happen would be your huge vet bill for the surgery to fix the damage caused by small chicken bones. Or you might get lucky and in that case, you could write on all internet forums that it is just a myth. :wink: My understanding is that raw bones are fine - they just digest. It's the cooked bones that are a problem. I don't know that from my own experience, but plenty of people who feed raw feed bones. In fact, I think that BARF used to mean "bones and raw food", but that could just be a trick my mind is playing on me. It certainly makes sense to me that carnivores should be able to eat raw bones. Cooked bo...
by Gumby
Sun Nov 06, 2011 8:01 pm
Forum: Personal Consumer Issues
Topic: What do you feed your dog?
Replies: 65
Views: 6581

Re: What do you feed your dog?

Dogs have thrived for thousands of years on raw meats and raw bones. http://en.wikipedia.org/wiki/Raw_feeding It's only been the last 50 years that dogs have begun eating poor quality commercial pet food. Every single one of the commercial pet foods mentioned above are sub-standard substitutions for a balanced diet of raw food. See also: Objection to commercial pet food The intense heat used to process commercial pet food destroys and reduces nutrients like vitamins, minerals, and enzymes. Studies with rats showed that the digestibility of amino acids in cat food is changed significantly by heat processing. Pet food manufacturers must supplement the food after heat processing to replace those nutrients. Most raw feeders believe that supplem...
by Gumby
Fri Nov 04, 2011 9:58 am
Forum: Personal Consumer Issues
Topic: The Boglehead Shaving Thread
Replies: 26
Views: 2865

Re: The Boglehead Shaving Thread

Nice tip on the blue jeans stropping, I had never heard of that. But I still don't see how it's possible to get a close shave — without irritation — from a multi-blade cartridge razor. The ultimate shave comes from a clean blade gliding, unexposed, over a well-prepared face as few times as possible. A five-blade cartridge exposes the skin to five blades at a time, increasing the amount of blade exposure and irritation. I just started using a Merkur 34c with a Tweezerman brush and the results are fantastic. Barber-shop quality every time and the blades are only 16¢ each (when bought in 100-packs). Tip... http://badgerandblade.com is the Bogleheads of shaving. http://www.shaving101.com has a lot of tips for newbies and Mantic59's videos are t...
by Gumby
Tue Nov 01, 2011 11:11 pm
Forum: Personal Consumer Issues
Topic: If you were Greek, how would you vote?
Replies: 6
Views: 1135

Re: If you were Greek, how would you vote?

This is an economic policy issue, which is banned from discussion. Which brings up the question, can we discuss economic policy issues facing countries other than facing US citizens? If readers can't do anything with the content of a topic other than argue about it, it does not belong here. Examples include: - US or world economic, political, tax, health care and climate policies - conspiracy theories of any type including oil price manipulation - discussions of the crimes, shortcomings or stupidity of other people, whether they be political figures, celebrities, CEOs, Fed chairmen, subprime mortgage borrowers, lottery winners, federal "bailout" recipients, poor people, rich people, etc. Of course, you are welcome to talk about t...
by Gumby
Sun Oct 23, 2011 7:16 pm
Forum: Investing - Theory, News & General
Topic: Gold's Expected Return
Replies: 97
Views: 11410

Re: Gold's Expected Return

When you buy the index, you get dividends, and these are reinvested. Your chart does not included reinvested dividends. My previous chart included reinvested dividends. With reinvested dividends, a hundred percent stock portfolio would have recovered in 15 years from the Great Depression. With diversification into bonds, the recovery would have taken less time. (Dividends yields rose to 10% during the depths of the depression. ) Some research suggests that a small amount of gold, say 5%, can decrease volatility and may be on the efficient frontier. However I have never seen a good study showing a large allocation to gold is on the efficient frontier. Personally, I think taxes (as well as future taxes, for that matter) make dividends a bit ...
by Gumby
Sat Oct 22, 2011 5:50 pm
Forum: Investing - Theory, News & General
Topic: Gold's Expected Return
Replies: 97
Views: 11410

Re: Gold's Expected Return

Joe S. wrote:At any rate we can buy the index now, and the past evidence suggests the index will grow exponentially.
If that's true, it will probably grow exponentially, like this...

Image

I wouldn't exactly call that a smooth ride. Notice the huge losses during each generation.

For some investors, bonds don't reduce the volatility of stocks enough. So, gold is held to reduce the volatility of stocks and bonds even more — and to preserve wealth.
by Gumby
Fri Oct 21, 2011 3:13 pm
Forum: Investing - Theory, News & General
Topic: Gold's Expected Return
Replies: 97
Views: 11410

Re: Re:

As you can see from this post before, I have admitted that the data from 1802-1870 is of poor quality And yet, you still tell people, with certainty, that stocks have gone up exponentially for 200 years? The data is obviously cherry picked. It's a fantasy. but the data from 1870 to the present is of excellent quality. Sure. You mean the "Industrial Revolution" to present day. Can't argue with that. But, the major criticism of Siegel's book, Stocks for the Long Run is... Some critics argue that the book uses a perspective that is too long to be applicable to today's long-term investors who, in many cases, are not investing for a 20–30 year period. In addition, Yale economist Robert Shiller, who wrote Irrational Exuberance (Princet...
by Gumby
Wed Oct 19, 2011 3:00 pm
Forum: Investing - Theory, News & General
Topic: Gold's Expected Return
Replies: 97
Views: 11410

Re:

On the otherhand, stocks and bonds are things that do grow exponential over time. http://www.investinpassiveincome.com/wp-content/uploads/2011/07/saupload_totalrealreturnsmall.jpg ?joe I keep seeing that chart tossed around whenever everyone tries to show that only stocks and bonds are worth investing in. Sorry, but that chart is a load of baloney. Stockbug, Jeremy Siegel (author of Stocks for the Long Run ) created that chart. The fine-print explanation of that chart (detailed in Bogle's Common Sense on Mutual Funds ) says . "These long-term data cover solely the financial markets of the United States. (Most studies show that stocks in other nations have provided lower returns and far higher risks.) In the early years, the data are b...
by Gumby
Mon Oct 10, 2011 11:12 pm
Forum: Investing - Theory, News & General
Topic: My Greek Crisis Update
Replies: 13
Views: 2633

Re: Gumby

larryswedroe wrote:I hope that is helpful

Larry
It is. I appreciate it. Thank you for your time.
by Gumby
Mon Oct 10, 2011 8:25 pm
Forum: Investing - Theory, News & General
Topic: My Greek Crisis Update
Replies: 13
Views: 2633

Re: amazing what people assume

Larry, I don't doubt that you checked your facts. Unfortunately banks don't publish their Credit Default Swap positions against sovereign debt and against European banks. Nobody knows what's there. In fact, just today we see that Erste Group, one of the largest banks in Central and Eastern Europe, was forced to disclose its Credit Default Swap portfolio after a taking a cumulative €460 million loss. Their CDS portfolio consisted of €2.8 billion in sovereign CDS exposure and €2.4 billion CDS exposure to banks. http://www.erstegroup.com/en/Press/Press-Releases/Archive/2011/10102011;jsessionid=XRgBTTyYYfKw3QhGSk1V0vJyPhz1vSdKGCLpvHqpnwpwpht5gYsp!768502961 The problem is that none of the auditors and regulators were ever aware of Erste's stealt...
by Gumby
Mon Oct 10, 2011 12:28 pm
Forum: Investing - Theory, News & General
Topic: My Greek Crisis Update
Replies: 13
Views: 2633

Larry, Your assurance that US bank exposure is limited seems to be derived from Geithner's recent testimony. Unfortunately, there seems to be a fair amount of evidence that US Bank exposure to European banks could be much higher than what we've been told by the powers that be. For instance, the Congressional Research Service tells a different story. From the WSJ: WSJ: U.S. Bank Exposure to Europe Could Be $640 Billion, Per Congressional Paper U.S. bank exposure to the European debt crisis is estimated at $640 billion, nearly 5% of total U.S. banking assets, according to recent research papers written for Congress. According to two different reports provided to federal lawmakers last month, the debt problems of Greece, Ireland, Portugal, Ita...
by Gumby
Fri Oct 07, 2011 9:42 am
Forum: Investing - Theory, News & General
Topic: Financial Crisis is worst the world has ever faced
Replies: 41
Views: 7732

OK. Personally, I think the Europeans will muddle along, gradually throw money into the system to avoid a "big-blast" impact. The US and Europe will be mired in economic stagnation for the next 20+ years. I think the possibility of zero returns on financial assets as a "best case" scenario are significant. I have planned accordingly. For a country, like France, to throw unknown amounts of taxpayer money at their largest banks seems unlikely, or incredibly difficult, while political elections are happening. Now imagine every country in the EU trying to fight the same headwinds. At the same time, this crisis falls in the category of "there is nothing I can do about it" so, having prepared as best I can, I don't ...
by Gumby
Fri Oct 07, 2011 7:43 am
Forum: Investing - Theory, News & General
Topic: Financial Crisis is worst the world has ever faced
Replies: 41
Views: 7732

I simply don't believe that the financial crisis is really worse today than in 1932. Unless someone can explain why I'm wrong about this, I'm not going to take this headline seriously. Brad From the BBC video I just posted... HOST: Let's suppose that political leaders, remain dilatory or resistent. What happens? DR. ROBERT SHAPIRO: If they cannot address this in a credible way, I believe within, perhaps, 2 to 3 weeks we will have a meltdown in soverign debt, which will produce a meltdown across the European banking system. We're not just talking about a relatively small Beligium bank. We're talking about the largest banks in the world. The largest banks in Germany. The largest banks in France. That will spread. It will spread to the United...
by Gumby
Fri Oct 07, 2011 7:34 am
Forum: Investing - Theory, News & General
Topic: Financial Crisis is worst the world has ever faced
Replies: 41
Views: 7732

Sidney wrote:What more would you suggest I do, other than joke a bit?
How about an intelligent conversation about the crisis. Is that too much to ask?

At the moment, there is no credible plan to deal with Europe's debt issues. Here's what IMF advisor (and former White House advisor), Dr. Robert Shapiro, had to say on the BBC two days ago.

http://youtube.com/watch?v=6UGDTtqklSo
by Gumby
Thu Oct 06, 2011 10:54 pm
Forum: Investing - Theory, News & General
Topic: Financial Crisis is worst the world has ever faced
Replies: 41
Views: 7732

For additional coverage, see also: http://www.businessweek.com/news/2011-10-06/king-loses-faith-in-europe-as-boe-acts-against-region-s-virus-.html The central bank yesterday announced its biggest stimulus since the depths of the recession, citing “vulnerabilities” related to the euro-area turmoil. King said the move, the first loosening of U.K. monetary policy since 2009, was a response to what may be the worst financial crisis ever. Source: BusinessWeek and... Washington Post :: Bank of England chief: UK may face worst economic crisis in history SkyNews :: Mervyn King Warns Of 'Worst Ever' Financial Crisis Forbes :: England bank chief: World facing worst crisis ever BBC: Worst financial crisis in human history say Bank of England boss