What happened to all of the gold bugs?

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STC
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What happened to all of the gold bugs?

Post by STC » Sat Mar 30, 2013 7:28 am

Was gold just performance chasing? Seems to me that 6 months ago every third thread was about gold. Now, nothing?

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Re: What happened to all of the gold bugs?

Post by nisiprius » Sat Mar 30, 2013 8:02 am

You'll notice there is a thread about bitcoins!

I'm sure there have been queries about GLD and SLV, and... one about the Vanguard Precious Metals & Mining fund in January and another in March. And, let's see, four or five about the Permanent Portfolio, mostly in January.

I think these things are very subject to recency, and that the things that spark queries about gold are:

--sharp drops in stocks (hasn't happened recently),
--sharp upturns in gold (hasn't happened recently),
--and alarmist interpretations of financial news.

There's apparently been a little drop in gold in February that might have cooled things off.

I'm thinking "fiscal cliff" in December and January heated things up, that little drop cooled things off.

Image

I make no secret of hoping it's a bubble, because that would ease the mental pain of not ever having bought any, but, you know, for the past eighteen months I don't see that gold has done anything dramatic one way or the other.

Image
Last edited by nisiprius on Sat Mar 30, 2013 8:15 am, edited 1 time in total.
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Re: What happened to all of the gold bugs?

Post by FillorKill » Sat Mar 30, 2013 8:10 am

To answer the OPs question:

Those that use gold due to PP or at some long term fixed portfolio amount are surely still doing what they do. Gold is volatile.

The recency and performance chasing crowd has found a new love - maybe US mid cap value? That's been doing well. :D

nisiprius [or anyone else more technologically adept than me] could you go to etf replay and run the backtest chart for 100% GLD against SPY [which is the default] for the last 6 months and post the pic? That clearly explains why the recency/performance chasing crowd exited stage left.

I'd post it but I'm a luddite and don't know how... :(

http://www.etfreplay.com/combine.aspx

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Re: What happened to all of the gold bugs?

Post by umfundi » Sat Mar 30, 2013 8:40 am

Also,

Cyprus is a forbidden topic and threads on Cyprus are being quickly locked. They would attract the conspiracy theorists.

That said, I learned a lot from the gold threads a few months back. Helped me to understand inflation risk, and what to do about it, a lot better.

Keith
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Re: What happened to all of the gold bugs?

Post by umfundi » Sat Mar 30, 2013 8:46 am

BBL wrote:To answer the OPs question:

Those that use gold due to PP or at some long term fixed portfolio amount are surely still doing what they do. Gold is volatile.

The recency and performance chasing crowd has found a new love - maybe US mid cap value? That's been doing well. :D

nisiprius [or anyone else more technologically adept than me] could you go to etf replay and run the backtest chart for 100% GLD against SPY [which is the default] for the last 6 months and post the pic? That clearly explains why the recency/performance chasing crowd exited stage left.

I'd post it but I'm a luddite and don't know how... :(

http://www.etfreplay.com/combine.aspx


How about this? Portfolio is 100% GLD. SPY is 100% SPDR S&P 500 ETF Trust.

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Re: What happened to all of the gold bugs?

Post by stevewolfe » Sat Mar 30, 2013 9:27 am

They are just sitting back and collecting their dividends... er, wait... :beer

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Re: What happened to all of the gold bugs?

Post by STC » Sat Mar 30, 2013 9:48 am

stevewolfe wrote:They are just sitting back and collecting their dividends... er, wait... :beer


I literally LOL'ed.

The PP crowd I have no issue with. I don't agree with their approach, but get their point and strategy... So meh. But it is rather funny that we haven't seen the chasers posting for a long while. I guess the "currency basket" argument is only valid when you are getting 20% CAGR to match? :oops:

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Re: What happened to all of the gold bugs?

Post by umfundi » Sat Mar 30, 2013 9:54 am

Doesn't the chart suggest you should be rebalancing stocks into gold, since they have diverged about 20% in the last few months?

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Re: What happened to all of the gold bugs?

Post by STC » Sat Mar 30, 2013 9:56 am

umfundi wrote:Doesn't the chart suggest you should be rebalancing stocks into gold, since they have diverged about 20% in the last few months?

Keith


Only for the PP folks. The chasers are bidding up gold based on their unique understanding of global economies and monetary policy... Of course, I view the parabolic move in price with great suspicion.

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Re: What happened to all of the gold bugs?

Post by momar » Sat Mar 30, 2013 9:58 am

I don't care. I still wish I had bought gold back in 2000.
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Re: What happened to all of the gold bugs?

Post by Kenkat » Sat Mar 30, 2013 10:00 am

It stopped going up, so they moved on. It is an age-old story on these discussion boards. You can tell the hottest performing sector based on the should I add/should I buy post counts. Likewise you can tell the worst performing sector based on the is it time to dump post counts.

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Re: What happened to all of the gold bugs?

Post by STC » Sat Mar 30, 2013 10:01 am

momar wrote:I don't care. I still wish I had bought gold back in 2000.


I wish I had purchased credit default swaps on MBS's with interest only, no-documentation, loans in 2008. But then again it's easy to invest if you had a time machine,

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Re: What happened to all of the gold bugs?

Post by FillorKill » Sat Mar 30, 2013 10:07 am

umfundi wrote:How about this? Portfolio is 100% GLD. SPY is 100% SPDR S&P 500 ETF Trust.

Keith


That's great, thank you Keith. :D I really need to update my forum posting skills....

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Re: What happened to all of the gold bugs?

Post by ofcmetz » Sat Mar 30, 2013 1:11 pm

stevewolfe wrote:They are just sitting back and collecting their dividends... er, wait... :beer



And gold pays a higher dividend now since the price has gone down a bit. Good time to load up. :sharebeer
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Re: What happened to all of the gold bugs?

Post by umfundi » Sat Mar 30, 2013 5:15 pm

This thread is close to being about nothing, and may thus be locked.

However, I have been contemplating the chart, and it scares me. There is no way I would rebalance into gold if I owned any.

If the chart were for two other classes, like small stocks vs foreign bonds, I'd have no problem. Rebalance immediately.

But for gold? Zero expected return and no theory on its future value. Am I missing something?

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Re: What happened to all of the gold bugs?

Post by STC » Sat Mar 30, 2013 5:36 pm

umfundi wrote:This thread is close to being about nothing, and may thus be locked.

However, I have been contemplating the chart, and it scares me. There is no way I would rebalance into gold if I owned any.

If the chart were for two other classes, like small stocks vs foreign bonds, I'd have no problem. Rebalance immediately.

But for gold? Zero expected return and no theory on its future value. Am I missing something?

Keith


Nope. You aren't missing anything. And all of those visceral defenders of gold have abandoned their zeal for debate. It only took 3 months of poor returns.

For the record, this thread is about performance chasing and staying the course.

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Re: What happened to all of the gold bugs?

Post by michaelsieg » Sat Mar 30, 2013 6:08 pm

I just rebalanced and bought more VGPMX two weeks ago - I would not call me a gold bug but I try to keep the portfolio allocation I decided in my IPS and I try to stick with my IPS. Therefore rebalance - or in my case new money to VGPMX. I look at gold as an asset that probably behaves different than other markets if volatility increases and it probably will be used as a 'safe heaven' again, if something happens that might shake up the markets (who knows when or if such an event will be triggered again, Cyprus, Italy, Portugal, Spain or whoever won't be able to pay whatever debt obligation they accumulated) - I have a relatively small percentage of gold/minerals (less than PP) in my portfolio and don't worry about its price much. I definitely agree that performance chasing just won't work. Glad I started with gold/minerals in 2005.

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Re: What happened to all of the gold bugs?

Post by umfundi » Sat Mar 30, 2013 6:14 pm

VGPMX is a tilt to natural resources that would be rejected by the gold metal purists.

By the way, VGPMX is a 5% part (tilt) of the very reasonable Gone Fishin' Portfolio.

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Re: What happened to all of the gold bugs?

Post by MCSquared » Sun Mar 31, 2013 11:17 am

STC wrote:Was gold just performance chasing? Seems to me that 6 months ago every third thread was about gold. Now, nothing?



I am not sure that folks who own gold start many threads. I tend to agree with what poster LBill said about gold threads back in 2011, and I will quote him...........

"The thing that's really interesting about gold threads is that it seems to be the only investment that is discussed mostly by people who don't own it, never did, and never will. Why is that? Precious envy?"

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Re: What happened to all of the gold bugs?

Post by bottomfisher » Sun Mar 31, 2013 11:27 am

by umfundi » Sat Mar 30, 2013 7:14 pm

VGPMX is a tilt to natural resources that would be rejected by the gold metal purists.

By the way, VGPMX is a 5% part (tilt) of the very reasonable Gone Fishin' Portfolio.

Keith

by michaelsieg » Sat Mar 30, 2013 7:08 pm

I just rebalanced and bought more VGPMX two weeks ago - I would not call me a gold bug but I try to keep the portfolio allocation I decided in my IPS and I try to stick with my IPS. Therefore rebalance - or in my case new money to VGPMX. I look at gold as an asset that probably behaves different than other markets if volatility increases and it probably will be used as a 'safe heaven' again, if something happens that might shake up the markets (who knows when or if such an event will be triggered again, Cyprus, Italy, Portugal, Spain or whoever won't be able to pay whatever debt obligation they accumulated) - I have a relatively small percentage of gold/minerals (less than PP) in my portfolio and don't worry about its price much. I definitely agree that performance chasing just won't work. Glad I started with gold/minerals in 2005.


I also consider VGPMX different than investing in gold. VGPMX holds operating company stocks that earn money (hopefully) for their investors through mining and selling various natural resources. Granted VGPMX performance may be affected by gold prices but its still operating companies rather than a simple yellow metal individuals trade back and forth.

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Re: What happened to all of the gold bugs?

Post by linenfort » Sun Mar 31, 2013 11:51 am

STC wrote:Was gold just performance chasing? Seems to me that 6 months ago every third thread was about gold. Now, nothing?


Although I don't consider myself a gold bug I'm still holding plenty. I just don't have much to say about it.
As with stocks, I don't know where gold is headed, but I have my reasons for holding (permanent portfolio).
Finally, gold threads have a way of getting locked here, so if I do discuss gold it tends to be elsewhere.
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Re: What happened to all of the gold bugs?

Post by grayfox » Sun Mar 31, 2013 12:01 pm

Gold, along with LT Treasuries, is still a pretty good diversifier against U.S. stocks. So maybe now that the price is off the peak, it would be a good time to add gold to a stock portfolio.

But as far as return goes, I have no idea what gold will return.

BTW, I did some analysis and, for the period 11/2004 to 2/2013, the minimum variance portfolio with U.S. stocks, gold and LT Treasuries was

VTSMX 37%
GLD 13%
TLT 49%
Std Dev 8.37%

If you combined it with 25% in risk-free asset like Harry Browne, it would be

VTSMX 28%
GLD 10%
TLT 37%
Cash 25%
Std Dev 6.28%

Go ahead. Add 10% gold to your portfolio. What are you afraid of? The worst that can happen is it goes from the present $1596 down to $300.
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Re: What happened to all of the gold bugs?

Post by linenfort » Sun Mar 31, 2013 12:09 pm

grayfox wrote:Go ahead. Add 10% gold to your portfolio. What are you afraid of? The worst that can happen is it goes from the present $1596 down to $300.

If only! Then I could buy some Eagle coins every month :!:
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Re: What happened to all of the gold bugs?

Post by michaelsieg » Sun Mar 31, 2013 7:39 pm

I also consider VGPMX different than investing in gold. VGPMX holds operating company stocks that earn money (hopefully) for their investors through mining and selling various natural resources. Granted VGPMX performance may be affected by gold prices but its still operating companies rather than a simple yellow metal individuals trade back and forth.

Fully agree - and as opposed to GLD the fund also gives dividends - last year about 4% pa

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Re: What happened to all of the gold bugs?

Post by LH » Sun Mar 31, 2013 8:40 pm

Well I dunno if slowly going to 3 percent gold, being about 0.5 percent, qualifies me as a goldbug, so I cannot speak for them, but really, I cannot see how to discuss the issue here much.

Gold has good correlation, and like ccf, does not really generate anything.

Gold in a portfolio long term is beneficial, rebalanced.

Personally, I expect and hope for gold to tank, short medium term. So I can buy more cheap over 20 to 30 years.

If you want the case for gold, the above is about all I can say here.

The rest has to be oblique.

Heh, I can imagine an "alarmist" in 1929, everyone saying all is well : )

Btw, I am 81 stock, 16 bonds, 3 gold , slowly going into gold.

Am I alarmist?

to stay the course, you have to conceive of downside risk. The people who capitulate, don't really think hard enough, about the pretty bad, near worst, and worse case scenarios. Maybe they have dissonance with downside risk discussions, confirmation bias.

To conceive of downside risk, one has to read about it, as well as discuss it is quite helpful, to points of fact. But it is scary stuff. Barbarous relics. Bugs.

But here, it's "alarmist". So it is what it is.

Really I cannot even answer the question. So sure, it's all recency, it's all alarm, nothing to see or hear.

Don't mistake an echo, for discussion, or silence for lack of desire of discussion though : )

The actionable part, is to diversify into gold, with the realization, that expectantly, you will lose a lot of the money perhaps permanently.

Look. For ease of discussion, just say 100 percent stock. Gd ii happens, you had 100 dollars.
At the bottom, you have 10 dollars. Now put 3 percent gold in there, 97 stock, 3 dollars gold. Same thing happens, gd ii, stocks at 10, gold doubles to 6

Now, again for ease, we will stipulate no 1933 confiscation, as "that won't happen again here". Gold is a barberous relic..... Right? Sure.

Now, it has only protected minimal amounts of your money from the current pov. Basically what 5 percent protection.

But look at it from the end state, the one in reality you would be living.

Instead of 10 dollars, you have 16 dollars.

60 percent more..........

In exchange for 3 percent of current portfolio, if the bad case happens you have 60 percent more wealth.

It's not roses, people. But if it happens, it is where we will be.

But that's the thing I look at. Time is a smear people, but we are geared to only look at the recent past and mostly the now. Negative future possible states are not regarded as "real" they are discounted, or ignored. Human nature.

So I am currently taking action, on non actionable thought process..... Which is curious.

This is about 10 percent of what I could would say on this issue. I have tried to fall into board rules.

I also cede recency, I am late to gold, I have no regrets about it, and when gold tanks, I will not have regrets either, as I realize whatever state happens, is just one of a continuum of possible equilibriums this complex chaotic unpredictable system can fall into. I did wait a full year though, and still going a slow, in a nod to recency.

Have a nice day,

LH

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Re: What happened to all of the gold bugs?

Post by Jebediah » Sun Mar 31, 2013 9:12 pm

The only conspiracy theory here is that there was any recent uptick in gold interest, and that it was 'chasing'. Those who don't own it would like to imagine so. I see no evidence-- there is always some interest in it and perhaps there are slight variations in that. This thread is utterly useless.

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Re: What happened to all of the gold bugs?

Post by Grt2bOutdoors » Sun Mar 31, 2013 9:29 pm

Don't know. Let me know when gold gets back down to $375 an ounce and silver is back down to $6. Then I might pick some up, just to hold in the palm of my hand from time to time.
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Re: What happened to all of the gold bugs?

Post by pjstack » Sun Mar 31, 2013 10:09 pm

Grt2bOutdoors wrote:Don't know. Let me know when gold gets back down to $375 an ounce and silver is back down to $6. Then I might pick some up, just to hold in the palm of my hand from time to time.

It would probably have to get down to that before you could get a deal!

I say that because every time there is a dip in silver prices and I go to look at buying some Silver Eagles they are mysteriously "out of stock".
pjstack

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Re: What happened to all of the gold bugs?

Post by lostcowboy » Sun Mar 31, 2013 10:34 pm

First let me say I own no gold, I own no stock, nor do I own any bonds or funds. Now people say that Gold is no longer a currency, but is that so? Think about it Gold is one of the few commodities that the small investor can invest in, with out playing in the commodities market, or futures market. Which have there own risks. So here you have millions of investors, in all the countries of the world both buying and selling gold, in their own countries currency. One could almost say that it is not the value of gold that is changing but the value of all the currencies of the world that are changing. So if Gold goes up in value of US dollars, one could just as easily say that the us dollar has gone down in value. Normally gold would be going down in value in some other country. But what does it mean when Gold goes up in all currency's of the world? Something bad is on the way? And if gold goes down in all currency's would that not mean that something good is on the way?
Like I say I don't own it, don't follow it, but to me that would be the simple logic of it.

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Re: What happened to all of the gold bugs?

Post by Phineas J. Whoopee » Mon Apr 01, 2013 5:18 pm

Bugged out pending another rally?

Crowded out by the bond bubble and stock market at (5-year not including dividends) all-time high posts?

Temporarily relocated to https://www.kitcomm.com?

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Re: What happened to all of the gold bugs?

Post by Jfet » Mon Apr 01, 2013 5:38 pm

[Off-topic comment removed by admin LadyGeek]

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Re: What happened to all of the gold bugs?

Post by Clearly_Irrational » Mon Apr 01, 2013 7:39 pm

Still holding 20% of my portfolio in gold, still happy with it. The Fed doesn't look like they're planning to budge any time soon.

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Re: What happened to all of the gold bugs?

Post by norookie » Mon Apr 01, 2013 8:22 pm

Golds stuck! 1600, thats Cramers call :oops: Heed the Oracle named Cramer. Its sad to see many college and the like crowed loose cash to his "recommendations". :annoyed Whats that saying? Remember the saying threads? A smart man learns from his mistakes, a wise man learns from others mistakes, and some men OR women, never learn. :D I like sayings! viewtopic.php?t=60749
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Re: What happened to all of the gold bugs?

Post by wshang » Mon Apr 01, 2013 9:44 pm

Image
Just so there isn't any misunderstanding, this is a chart of gold, except it is denominated in yen.

Not as many people seeking to defend their purchasing power in dollars - as of recently.
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Re: What happened to all of the gold bugs?

Post by hazlitt777 » Mon Apr 01, 2013 9:57 pm

This PP gold fan took a vacation from this site for Lent. Trying to spend time doing more important things.

I haven't had to rebalance yet. Gold was up 7% last year as of December 31st, at $1675.

This year as of today it is down (1602/1675) 4.4%. Frankly surprised, but short term anything can happen. Didn't expect to see stocks do what they have done...DJIA 14500. Glad I own a good percentage of those too.

Was happy to see in another thread Mr. Bogle found it regretable that interest rates are so low fueling all this speculation. I think that is where all this volatility comes from...in stocks, bonds and gold. But that is the investing environment we will have to deal with for the forseeable future.

I still suggest everybody take a 5-10% position in gold and rebalance.

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Re: What happened to all of the gold bugs?

Post by WHL » Mon Apr 01, 2013 10:50 pm

No gold in my portfolio outside of my TSM holding, but I am buying the hell out of physical silver as I have been doing since 2011 and will continue doing as long as the price doesn't skyrocket.

As was previously mentioned, I stick to www.kitcomm.com for my PM discussions. This place doesn't agree with PM's, just like kitcomm forums don't agree with the stock market.

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Re: What happened to all of the gold bugs?

Post by Browser » Tue Apr 02, 2013 12:17 am

Gold has gone nowhere for a couple years now. It keeps backing and filling. It's off the radar of the converts now that all the chatter is about stocks - which have clawed their way back to where they were 13 years ago in real terms, which seems to excite some people. Now that stocks are back in the limelight and gold isn't, seems like a good time to buy some more gold -- so I did today.
We don't know where we are, or where we're going -- but we're making good time.

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Re: What happened to all of the gold bugs?

Post by umfundi » Tue Apr 02, 2013 1:30 am

wshang wrote:Just so there isn't any misunderstanding, this is a chart of gold, except it is denominated in yen.

Not as many people seeking to defend their purchasing power in dollars - as of recently.

Still looks pretty flat over the past 3-4 years, comparatively.

If I did own Yen, I think that as a US resident the only relevant thing to me would be the value of JPY vs. the USD. Why is the price of gold in JPY at all important?

Keith
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Re: What happened to all of the gold bugs?

Post by wshang » Tue Apr 02, 2013 9:44 am

umfundi wrote:If I did own Yen, I think that as a US resident the only relevant thing to me would be the value of JPY vs. the USD. Why is the price of gold in JPY at all important?
Keith

It is because people all over the world buy gold based upon their own currency. I am answering the OP's question. Looking at the price of gold from our own parochial standpoint is incomplete. The day will come when "the one eyed man in the world of the blind (the US dollar) " is no longer king. Those mocking 'gold bugs' now, will then understand what Japanese investors know and feel presently.

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Re: What happened to all of the gold bugs?

Post by STC » Tue Apr 02, 2013 9:56 am

wshang wrote:
umfundi wrote:If I did own Yen, I think that as a US resident the only relevant thing to me would be the value of JPY vs. the USD. Why is the price of gold in JPY at all important?
Keith

It is because people all over the world buy gold based upon their own currency. I am answering the OP's question. Looking at the price of gold from our own parochial standpoint is incomplete. The day will come when "the one eyed man in the world of the blind (the US dollar) " is no longer king. Those mocking 'gold bugs' now, will then understand what Japanese investors know and feel presently.


[Personal attack removed by admin LadyGeek]

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Re: What happened to all of the gold bugs?

Post by wshang » Tue Apr 02, 2013 11:45 am

STC wrote:[Personal attack removed by admin LadyGeek]

I almost flagged this as inappropriate because of the condescending and insulting tone. Perhaps you might wish to rewrite or redact it before someone else does.

Brushing aside your Strawman fallacious example, consider this:

1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound. Gold has always been the primary or secondary reserve currency throughout history. It doesn't matter if you value it, the point is enough people continue to value the barbaric relic.

2) We purchase many nonperforming assets. No one faults a BH when they purchase disability, life, health or umbrella insurance. Especially for those who made their number, gold is a form of insurance against many unforseen and unforseeable events.

3) Where are the goldbugs? They are in Japan and many places elsewhere. Obviously, they value gold more than their currency in their hands. Charts of gold in other currencies do not match those which we are so attuned in dollars.

4) I can't speak for others, but I hold IAU/GLD, precisely because I cannot predict the future. It is not because I am mentally deficient, a poor/unsuccessful investor or align with fringe political thinking.

Surely, one must be open minded enough to realize there are many uses of gold other than that might occur to our limited understanding and circumstances. That is one of the themes of Hayek's Nobel Prize acceptance speech about the limits of knowledge.

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Re: What happened to all of the gold bugs?

Post by money » Tue Apr 02, 2013 12:07 pm

I do not understand why people get "snobby" about certain types of assets. Given a long enough timeline, any investment could end up being junk in the end. I am interested in gold, but it seems to still be over-hyped and in a bubble, but unfortunately so do other major investment instruments at the moment. My gold fever has been transformed into bitcoin fever. :wink: But even bitcoins seem to be in a bubble. Once I stop seeing TV ads for cash for gold, hearing about people getting their jewelry stolen, and the price goes down, maybe I will be more interested.
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Jfet
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Re: What happened to all of the gold bugs?

Post by Jfet » Tue Apr 02, 2013 12:15 pm

wshang wrote:1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound. Gold has always been the primary or secondary reserve currency throughout history. It doesn't matter if you value it, the point is enough people continue to value the barbaric relic.


As a counter argument though, aluminum once was more highly valued than gold to the point that it was considered an honor to be given aluminum flatware at a table vs gold or silver.

Then some guy figured out how to easily extract aluminum and the price plunged.

could happen to gold or silver? probably not, but then again....we are doing a lot of weird things these days...thinking of moving asteroids, discovering god particles,....

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Re: What happened to all of the gold bugs?

Post by jda » Tue Apr 02, 2013 12:17 pm

money wrote:I do not understand why people get "snobby" about certain types of assets. Given a long enough timeline, any investment could end up being junk in the end. I am interested in gold, but it seems to still be over-hyped and in a bubble, but unfortunately so do other major investment instruments at the moment. My gold fever has been transformed into bitcoin fever. :wink: But even bitcoins seem to be in a bubble. Once I stop seeing TV ads for cash for gold, hearing about people getting their jewelry stolen, and the price goes down, maybe I will be more interested.


+1

Especially in this forum, unless you are investing in strictly indexes, people will call out your strategy when they see a slight dip in a 6 month period even though they call themselves "long term" investors.
I thought this sub forum is to discuss different investing strategy instead of padding ourselves on the back on how good we are doing and how indexing is the only way to reach our financial goals.

Re. Pimco, Berkshire, Gold, Dividend Strategy etc.

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Epsilon Delta
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Re: What happened to all of the gold bugs?

Post by Epsilon Delta » Tue Apr 02, 2013 12:42 pm

wshang wrote:1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound.

As far as I'm concerned the defining characteristic of a "gold bug" is that they make statements that are not only untrue, but so utterly and deeply untrue that believing them requires ignoring obvious facts. And when they are called on it they start twisting and turning like a twisty turny thing.

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Re: What happened to all of the gold bugs?

Post by grayfox » Tue Apr 02, 2013 12:52 pm

Yesterday, I sold off some risky assets to reduce risk, and thought about putting the proceeds into a gold fund. But I didn't. Now if I were going to buy a gold fund, I think it will be IAU which has a slightly lower e.r. than the more popular GLD.

But instead of IAU, I put the proceeds into 5/5/2013 Treasury STRIPS. Price was 99.994 Whopping 0.05% interest. :D At least it won't lose anything and it is 5x Vanguard Prime MMF. Maybe next month I'll revisit IAU.
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wshang
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Re: What happened to all of the gold bugs?

Post by wshang » Tue Apr 02, 2013 12:56 pm

Epsilon Delta wrote:
wshang wrote:1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound.

As far as I'm concerned the defining characteristic of a "gold bug" is that they make statements that are not only untrue, but so utterly and deeply untrue that believing them requires ignoring obvious facts. And when they are called on it they start twisting and turning like a twisty turny thing.

I'm not sure what is your point.
Are you saying you can cite a fiat currency which has endured?
The two world currencies I mentioned were in their time universal, now replaced by the dollar. The Spanish empire and the British empire, well we need not say more. (FWIW, I am 5% gold)

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Re: What happened to all of the gold bugs?

Post by Clearly_Irrational » Tue Apr 02, 2013 1:03 pm

wshang wrote:The two world currencies I mentioned were in their time universal, now replaced by the dollar. The Spanish empire and the British empire, well we need not say more. (FWIW, I am 5% gold)


While the British Pound is no longer the reserve currency I don't think it's a good example in this case since it's still around.

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Re: What happened to all of the gold bugs?

Post by STC » Tue Apr 02, 2013 1:16 pm

wshang wrote:
STC wrote:[Personal attack removed by admin LadyGeek]

I almost flagged this as inappropriate because of the condescending and insulting tone. Perhaps you might wish to rewrite or redact it before someone else does.

Brushing aside your Strawman fallacious example, consider this:

1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound. Gold has always been the primary or secondary reserve currency throughout history. It doesn't matter if you value it, the point is enough people continue to value the barbaric relic.

2) We purchase many nonperforming assets. No one faults a BH when they purchase disability, life, health or umbrella insurance. Especially for those who made their number, gold is a form of insurance against many unforseen and unforseeable events.

3) Where are the goldbugs? They are in Japan and many places elsewhere. Obviously, they value gold more than their currency in their hands. Charts of gold in other currencies do not match those which we are so attuned in dollars.

4) I can't speak for others, but I hold IAU/GLD, precisely because I cannot predict the future. It is not because I am mentally deficient, a poor/unsuccessful investor or align with fringe political thinking.

Surely, one must be open minded enough to realize there are many uses of gold other than that might occur to our limited understanding and circumstances. That is one of the themes of Hayek's Nobel Prize acceptance speech about the limits of knowledge.


[Personal attack removed by admin LadyGeek]
Last edited by STC on Tue Apr 02, 2013 1:25 pm, edited 2 times in total.

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Re: What happened to all of the gold bugs?

Post by Epsilon Delta » Tue Apr 02, 2013 1:21 pm

wshang wrote:
Epsilon Delta wrote:
wshang wrote:1) No fiat currency has ever lasted. Three centuries ago, we might be talking Spanish reales, two centuries, the British pound.

As far as I'm concerned the defining characteristic of a "gold bug" is that they make statements that are not only untrue, but so utterly and deeply untrue that believing them requires ignoring obvious facts. And when they are called on it they start twisting and turning like a twisty turny thing.

I'm not sure what is your point.
Are you saying you can cite a fiat currency which has endured?
The two world currencies I mentioned were in their time universal, now replaced by the dollar. The Spanish empire and the British empire, well we need not say more. (FWIW, I am 5% gold)

The Dollar is a fiat currency and still exists.
The Pound is a fiat currency and still exists.
The Yen is a fiat currency and still exists.
The Zloty is a fiat currency and still exists.
The Euro is a fiat currency and still exists (as of April 2, 2013 2:20PM EST :shock: )

Keep twisting.

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