Friend says "Stock market will crash, invest in silver" - thoughts?

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guyesmith
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by guyesmith » Thu May 17, 2018 9:16 am

Miakis wrote:
Thu May 17, 2018 9:07 am
I have a degree in Economics and I was taught by many decorated Doctors of Economics. None of them were particularly wealthy.
Broke people giving money advice! Yep. Happens to me everyday. Again, that's why I bust out the bobble head. Maybe I can call it the Boglehead Bobblehead. "Uh huh...yep...uh huh...yep." And keep on keeping on.

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randomizer
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by randomizer » Thu May 17, 2018 9:55 am

OP: does your friend know more than Warren Buffett?
87.5:12.5, EM tilt — HODL the course!

BogleMelon
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by BogleMelon » Thu May 17, 2018 10:02 am

randomizer wrote:
Thu May 17, 2018 9:55 am
OP: does your friend know more than Warren Buffett?
You won the internet!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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randomizer
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by randomizer » Thu May 17, 2018 10:03 am

BogleMelon wrote:
Thu May 17, 2018 10:02 am
randomizer wrote:
Thu May 17, 2018 9:55 am
OP: does your friend know more than Warren Buffett?
You won the internet!
Warren is on my mind after recent stockholder meeting.
87.5:12.5, EM tilt — HODL the course!

BogleMelon
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by BogleMelon » Thu May 17, 2018 10:05 am

OP: Here is another article with a nice table

What The Experts Got Right In 2016
http://www.etf.com/sections/index-inves ... nopaging=1

The table:
http://www.etf.com/sites/default/files/ ... things.jpg
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by abuss368 » Thu May 17, 2018 10:12 am

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes. He said companies were artificially inflating their stocks. (I don't understand the detail!)

He advised shifting my investments to silver.

Should I be worried?

Obviously nobody knows what's happening next, and there are lots of predictions of poor game in the future.

Does anyone know what he is referring to?
Your friend is correct! The stock market will crash at some point in the future as it has done throughout history!

During the financial crisis we did the opposite of what we historically did in terms of security selection and market timing, and we simply bought more, did not change our asset allocation, and stayed the course. In hindsight it was a very wise plan.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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DaftInvestor
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by DaftInvestor » Thu May 17, 2018 12:35 pm

OP:
Someone above stated they shared Warren Buffet's views on Silver (and other commodities) as NOT being an investment but rather a speculation.
In case you don't know what this means here is a Warren Buffet quote:
“The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”
I agree with Buffet - there is no "investment" because you aren't contributing to an entity (such as a company) that is producing income to grow its value over time. You are simply "speculating" that someone might be more willing to pay more for the commodity for some reason at some future date.

That said - although this is Bogleheads - there are several people here who keep saying they are "shifting to cash" or "Holding dry powder" - so some market timers do seem to contribute here - so while market timing is generally frowned upon by Bogleheads - some folks seem to be making exceptions (of course there are also the threads whereby people say they shifted to cash three years ago because they thought there was an upcoming crash and now they are debating on whether to lump-sum back in or slowly buy back in).

Regarding your friend - he isn't alone - there are lots of economists that are predicting various crash timings - but this has been going on for years and they are proven wrong most of the time (eventually one will be lucky and just happen to nail it).

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by drg02b » Thu May 17, 2018 12:46 pm

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He advised shifting my investments to silver.
Funny I saw that exact same headline on marketwatch.com yesterday. If I refresh that page enough in the same day, I'll find 20-30 headlines all providing conflicting evidence/projections -- it's all just noise. Stay the course and gracias por leer.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Doom&Gloom » Thu May 17, 2018 12:54 pm

SmilerUK wrote:
Thu May 17, 2018 1:52 am
B. Wellington wrote:
Wed May 16, 2018 6:23 am
OP, serious question...Why does your friend suggest silver?

Why not Real Estate? Gold? Treasuries? Money Market? What does he see that we do not?
He talked about its usefulness and demand for it, versus the lesser demand for gold in practical terms.
I think I remember this argument from the '70s. IIRC the logic went something like "Kodak and other big companies will always require silver for developing film etc." Seems solid!

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9-5 Suited
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by 9-5 Suited » Thu May 17, 2018 12:59 pm

Just in case this hasn't been posted yet. I need to remember to come back to this post in March and October of next year. That's a highly specific prediction!

viewtopic.php?t=222796

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HomerJ
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by HomerJ » Thu May 17, 2018 1:14 pm

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Obviously nobody knows what's happening next
This is true. Even if your friend is an "expert in macroeconomics", you should stop listening to him whenever he opens his mouth about investing. Very weird that he was so specific about October OR March (but nothing in-between?). A prediction that specific has nothing to do with "macroeconomics".

The stock market will crash. Maybe even tomorrow. But maybe not for 5 years. No one knows.

I suggest that you pick an asset allocation assuming the market will crash tomorrow and stay down for a few years before recovering.

Because it might.

Then you no longer have to worry about predicting the future because you're already ready for a crash tomorrow.

If you're young, that assumption could still have you at 90% stocks, because you have plenty of time to wait for the recovery. If you're close to retirement, you should probably have a lower exposure to stocks, because that crash could happen tomorrow, and not recover for a few years, which could impact your retirement.

And if you do this, you don't need to change anything day-to-day, regardless of what the "experts in macroeconomics" predict.

If you carry an umbrella every single day, and someone runs up to you and screams, "Oh my gosh, the chance of rain is much higher tomorrow than it was yesterday!", it doesn't affect you at all.... Because you are already carrying an umbrella.
Last edited by HomerJ on Thu May 17, 2018 2:04 pm, edited 3 times in total.
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HomerJ
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by HomerJ » Thu May 17, 2018 1:24 pm

CurlyDave wrote:
Wed May 16, 2018 5:56 am
One of the most amazing things I have noticed, is that DW and I are better off than most of the other people in our little rural community. Maybe this is because many years ago we adopted a "get rich slowly" plan. No one ever asks us for financial advice, but every time a "get rich quick" scheme comes along someone in our community gets pulled into it and ends up losing money. And it is always based on advice from someone who on a good day might have a few hundred bucks in his bank account and who thinks a "portfolio" is a fancy notebook.
"After years of disappointment with get rich quick schemes, I know I'm gonna get rich with this scheme. And quick."

-Homer J. Simpson
Last edited by HomerJ on Thu May 17, 2018 1:27 pm, edited 1 time in total.
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by roymeo » Thu May 17, 2018 1:27 pm

Wait, didn't the stock market crash once before? I forget exactly when that was...but your friend's been invested purely in silver ever since, right?
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HomerJ
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by HomerJ » Thu May 17, 2018 2:07 pm

One last thing.

SmilerUK.

Note that we are NOT saying there won't be a crash.

There might be. Maybe even tomorrow. Maybe in October or March. We don't know. We're just saying he doesn't know either.

You should always be ready for a crash tomorrow that takes a while to recover. Because it might happen.
Last edited by HomerJ on Thu May 17, 2018 2:15 pm, edited 2 times in total.
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SmilerUK
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SmilerUK » Thu May 17, 2018 2:08 pm

randomizer wrote:
Thu May 17, 2018 9:55 am
OP: does your friend know more than Warren Buffett?
NO. Nuff said!

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by SmilerUK » Thu May 17, 2018 2:08 pm

You're all freakin' genii.

Thanks for straightening me out!

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Cheyenne » Thu May 17, 2018 2:25 pm

Sometime around 2007 I heeded some sage advice and bought a lot of 1 oz. silver coins in order to be ready for the coming calamity when dollars wouldn't be worth anything anymore. I think I paid about $32/oz. so I'm ready! (and have been for 11 years).

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Doom&Gloom
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Doom&Gloom » Thu May 17, 2018 3:31 pm

Cheyenne wrote:
Thu May 17, 2018 2:25 pm
Sometime around 2007 I heeded some sage advice and bought a lot of 1 oz. silver coins in order to be ready for the coming calamity when dollars wouldn't be worth anything anymore. I think I paid about $32/oz. so I'm ready! (and have been for 11 years).
I can top that. My 90 y/o MIL has had a cache of silver coins, worn buffalo nickels, Kennedy halves, and ragged $2 bills that her late husband had buried in the backyard a few years before the upcoming Y2K calamity. She recently asked DW to divvy them up among her and her two siblings, which she did last week. We are now sitting on a Crown Royal bag of soon-to-appreciate wealth.

If I'd had my druthers, I'd have taken the Crown Royal :beer

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by drg02b » Thu May 17, 2018 4:11 pm

Doom&Gloom wrote:
Thu May 17, 2018 3:31 pm
Cheyenne wrote:
Thu May 17, 2018 2:25 pm
Sometime around 2007 I heeded some sage advice and bought a lot of 1 oz. silver coins in order to be ready for the coming calamity when dollars wouldn't be worth anything anymore. I think I paid about $32/oz. so I'm ready! (and have been for 11 years).
I can top that. My 90 y/o MIL has had a cache of silver coins, worn buffalo nickels, Kennedy halves, and ragged $2 bills that her late husband had buried in the backyard a few years before the upcoming Y2K calamity. She recently asked DW to divvy them up among her and her two siblings, which she did last week. We are now sitting on a Crown Royal bag of soon-to-appreciate wealth.

If I'd had my druthers, I'd have taken the Crown Royal :beer


In about a thousand years, they'll be worth something to a museum documenting foolish ways people tried to preserve money. They will be worth about a million dollars at that point, which unfortunately, will not have outpaced inflation.

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stemikger
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by stemikger » Thu May 17, 2018 4:19 pm

Nobody Knows Nothing!

Are you an investor or a speculator? Market timing never works (some do get lucky, but it is a very small percent).

If you feel nervous readjust your asset allocation to something you can live with when the market does go down, but NEVER ALL IN OR ALL OUT OF THE MARKET.

I said Stay the Course a thousand times and I meant it every time ~ Jack Bogle

https://www.youtube.com/watch?v=A0gQiz0pCyI
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by wootwoot » Thu May 17, 2018 4:22 pm

NS_Bane wrote:
Wed May 16, 2018 4:42 am
Everyone who accurately predicted the last stock market crash and were able to properly execute trades to take advantage of it became multimillionaires. If your friend is not already fabulously wealthy, he is about to become so. I recommend you become closer to him.
This guy gets it.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by avoidingdumbmistakes » Thu May 17, 2018 4:28 pm

I have around 50 or so silver dollars from the late 1800s. I really like having them because it makes me ponder who bought whisky or gambled in a saloon casino with them. I had an appraiser look at them to make sure I didn't have a morgan or something worth a fortune. Of course nothing exciting was found but the values range from $12-25 each.

12 to 25x in 120 years isn't the worst return in the world. However, selling them all today and sticking the money in a total stock fund would make me a lot more money over the next 30 years versus holding onto a bag old old tarnished coins... I can't bring myself to do it though. Something about having the coins is too interesting to liquidate. I'll wait until the stock crash and then cash them in and invest.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Cycle » Thu May 17, 2018 4:45 pm

Jack FFR1846 wrote:
Thu May 17, 2018 8:31 am
oldcomputerguy wrote:
Wed May 16, 2018 5:52 am

Just curious, how is gold that different from silver? They're both precious metals, neither produces any real return. Why is gold so much "better" than silver?
Silver costs much more as a percentage than gold to both buy and sell.

I still have some silver coins I'd love to unload. Worst investment ever. If I took that money 5 years ago and put it under the mattress, I'd be better off today than I am with this stupid pile of silver coins.
Same here, I have like $1000 in silver coins for the zombie apocolypse, but realize now that we aren't ever going to switch to precious metals currencies.

To OP, just keep buying the market weekly in perpetuity

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by frugalecon » Thu May 17, 2018 4:48 pm

I am struggling to understand why this thread has so many replies.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by Doom&Gloom » Thu May 17, 2018 4:57 pm

frugalecon wrote:
Thu May 17, 2018 4:48 pm
I am struggling to understand why this thread has so many replies.
Silver threads among the gold.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by WhiteMaxima » Thu May 17, 2018 5:07 pm

Why silver only? If stock market crashed, you should buy more stocks. If you have invested in broad based stock/bond/real asset/cash, let's say 25/25/25/25, you should do nothing. And if stock crashed tomorrow, you should buy even more.

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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by One Ping » Thu May 17, 2018 5:56 pm

SmilerUK wrote:
Wed May 16, 2018 3:57 am
Noob question :-)

A highly respected friend of mine is an expert in macroeconomics, and warned me to stay away from stocks.

He said that come October or March next year, there are likely to be big crashes.
Well, which is it, October or March? His crystal ball must be hazy if he's not so sure. :twisted:
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Re: Friend says "Stock market will crash, invest in silver" - thoughts?

Post by LadyGeek » Thu May 17, 2018 6:11 pm

SmilerUK wrote:
Thu May 17, 2018 2:08 pm
You're all freakin' genii.

Thanks for straightening me out!
One our most popular topics is holding gold as part of your portfolio. There are two very clear answers: (1) Yes and (2) No. Anyone who sides with (1) is convinced that (2) is wrong. Anyone who sides with (2) is convinced that (1) is wrong. Both sides dig in, which usually ends up in contentious disagreement.

Silver is a precious metal, just like gold. For that reason, your question generates just as much interest.

It looks like you got your answer. Further discussion will not change anything, it's no longer productive and is starting to derail.

Let's call this discussion done. This thread has run its course and is locked.

SmilerUK - If you want the thread reopened, PM me.
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