Gold is again on my head

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Always passive
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Gold is again on my head

Post by Always passive »

I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
jimbomahoney
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Re: Gold is again on my head

Post by jimbomahoney »

Been investing in gold and silver for years.

I'm a big fan of the Permanent Portfolio, although it's not a popular choice around here.

Having said that, I have a major equity tilt and ZERO bonds, so it's not really a Permanent Portfolio.

I did a LOT of investigative work / backtesting (including rolling period, not just entire period) and found that a 1/3 split of gold/stocks/bonds performed very nicely (i.e. PP without cash). However, I'm happy to take the increased volatility by holding more equities and I believe that bonds are doomed as governments struggle to manage their debt (e.g. perpetual bonds, inflation etc.).

I realise that the future is unknowable, but I'm happy with a Portfolio as follows:

20% Gold
5% Silver
68% World Equities (matching closesly to each country GDP - e.g. 25% US, 15% China, 6% Japan etc.)
3% Cash (Enough for a few months / years living expenses)
4% Crypto (BTC)

You may be interested in the following:

https://www.youtube.com/watch?v=LA2Yr6NoZyA&t
Robot Monster
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Re: Gold is again on my head

Post by Robot Monster »

I posted this in the Snowflake thread, but it pertains to this one. Was responding to someone who appeared to be saying the decision to invest in Snowflake entirely rested on Buffett:

It's not all about Buffett, is it?

See:
Warren Buffett's Lieutenants Are Increasingly Running Berkshire

and,

"In an interview with Yahoo! Finance Friday, Snowflake CEO Frank Slootman was asked about the Berkshire investment and what might have led the company to invest in Snowflake. Slootman had said that most of Snowflake's interactions had been with Todd Combs, one of Buffett's younger lieutenants."
Now We Know Who at Berkshire Invested in Snowflake, and Why
perfectuncertainty
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Re: Gold is again on my head

Post by perfectuncertainty »

I know Bogleheads don't believe in forecasting or technical analysis, however, I use TA and it has saved me a lot of money (by getting out early) - perhaps I've just been lucky so far.

Based on my analysis I am bearish on gold and silver.

For GLD I have two targets: 164 and 159. Currently @ 174.94
For UGL I have two targets: 56.49 and 54.68. Currently @ 66.73
For SLV I have a target of 19.45. Currently @ 21.30
For AGQ I have a target of 29.84. Currently @ 40.63
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Always passive
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Re: Gold is again on my head

Post by Always passive »

jimbomahoney wrote: Sat Sep 26, 2020 10:59 am Been investing in gold and silver for years.

I'm a big fan of the Permanent Portfolio, although it's not a popular choice around here.

Having said that, I have a major equity tilt and ZERO bonds, so it's not really a Permanent Portfolio.

I did a LOT of investigative work / backtesting (including rolling period, not just entire period) and found that a 1/3 split of gold/stocks/bonds performed very nicely (i.e. PP without cash). However, I'm happy to take the increased volatility by holding more equities and I believe that bonds are doomed as governments struggle to manage their debt (e.g. perpetual bonds, inflation etc.).

I realise that the future is unknowable, but I'm happy with a Portfolio as follows:

20% Gold
5% Silver
68% World Equities (matching closesly to each country GDP - e.g. 25% US, 15% China, 6% Japan etc.)
3% Cash (Enough for a few months / years living expenses)
4% Crypto (BTC)

You may be interested in the following:

https://www.youtube.com/watch?v=LA2Yr6NoZyA&t
Very interesting, thank you. Are you retired? I am. If not would you hold this allocation if you were?
I understand the current issue with bonds but I do not think that I can be that aggressive.
My portfolio is 35% equities (globally) and the rest in bonds. I was planning to gradually purchase gold at the expense of bonds to up to 10% of my portfolio.
kjm
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Re: Gold is again on my head

Post by kjm »

I’m a big fan of the Permanent Portfolio, although it's not a popular choice around here.
Also a big fan of the permanent portfolio minus cash.

Ultimately, gold isn’t very strongly correlated to stocks or treasuries, so adding it to a stock/bond mix should improve risk adjusted returns.

Now is a tricky time for gold. The money supply has inflated and inflation is a tailwind for gold. However money velocity is down because we’re in a recession, which’s deflationary and therefore bad for gold prices. How gold does in the short to mid-term will depend on which of threes forces wins out.
000
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Re: Gold is again on my head

Post by 000 »

Yes, I have Gold. I think it will beat most fixed income investments over the next 20 years.

That said, I expect Gold to return around 0% real with high volatility. I do not view it as a growth asset.
NoRegret
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Re: Gold is again on my head

Post by NoRegret »

perfectuncertainty wrote: Sat Sep 26, 2020 1:54 pm I know Bogleheads don't believe in forecasting or technical analysis, however, I use TA and it has saved me a lot of money (by getting out early) - perhaps I've just been lucky so far.

Based on my analysis I am bearish on gold and silver.

For GLD I have two targets: 164 and 159. Currently @ 174.94
For UGL I have two targets: 56.49 and 54.68. Currently @ 66.73
For SLV I have a target of 19.45. Currently @ 21.30
For AGQ I have a target of 29.84. Currently @ 40.63
I think silver more than gold has the potential to go even lower, 61.8% fib retracement even. The rounded bottom in DXY foreshadows a more sustained change of trend. IMO price will drive a deflation narrative.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
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JoMoney
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Re: Gold is again on my head

Post by JoMoney »

No, I still don't consider gold an 'investment'. It might be hedge of sorts against everything else doing bad, but I'm not buying it.
People have made a big whoop-de-do about Buffett putting a relatively trivial amount into a gold producer.
From this, https://www.cnbc.com/berkshire-hathaway-portfolio/
It appears to be about 0.25% of his portfolio... If we rounded, this would be 0%.. it's not moving the needle...
...and it's not "gold", it's stock of a gold producing business.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Alchemist
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Re: Gold is again on my head

Post by Alchemist »

Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
First there is nothing special about gold. It is just a commodity like oil, copper, or wood. It happens to be pretty and previously minted into coins so people ascribe emotional value to it that is not supported on an economic utility basis.

Secondly, Buffett buy's companies he sees at attractive valuations versus their fundamentals. Buying a gold producer is no more a Buffett endorsement of buying gold bullion than his investment in oil companies is an endorsement to buy oil futures.

If you have not already I highly recommend reading the only authorized biography on Buffett, Snowball, when you get the chance. It is not a book on investing but learning more about Mr Buffett's life story will provide illumination into his business actions that go far beyond the headlines.

ETA: Snowball audiobook is also very well done if you like audiobooks.
NoRegret
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Re: Gold is again on my head

Post by NoRegret »

000 wrote: Sat Sep 26, 2020 4:58 pm That said, I expect Gold to return around 0% real with high volatility. I do not view it as a growth asset.
"Gold to return around 0% real"

Under a gold standard, this was tautologically true. However,
1) We're under a fiat money system.
2) Gold is still a recognized monetary reserve asset.
3) Gold annual mine production is ~1.5% of stock, while fiat money supply grows much faster.

The base case ought to be -- if the relative preference of fiat to gold is stable then total gold market cap should keep pace with fiat money growth, which means gold price can grow at a positive real rate if fiat money supply growth supports expansion of the real economy which is the original argument for fiat over gold.

Herein also also lies the crux, the relative fiat/gold preference is far from stable and gives rise to significant periods of significant gold price rise/decline. Unfortunately there isn't a discernable correlation between gold price and money supply given the history so far. It has a much stronger relationship with real rates which I think is a better driver of portfolio allocation decisions.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
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JoMoney
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Re: Gold is again on my head

Post by JoMoney »

Alchemist wrote: Sat Sep 26, 2020 8:24 pm...
First there is nothing special about gold. It is just a commodity like oil, copper, or wood. It happens to be pretty and previously minted into coins so people ascribe emotional value to it that is not supported on an economic utility basis...
I largely agree with the sentiment, but for what it's worth, gold does have properties that make it better for coinage then a lot of other elements.
It's historically been relatively rare and hard to get to, not radioactive or otherwise toxic or dangerous, and doesn't rust corrode burn or otherwise decompose easily.
https://www.npr.org/sections/money/2011 ... t-why-gold
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
000
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Re: Gold is again on my head

Post by 000 »

NoRegret wrote: Sat Sep 26, 2020 8:29 pm "Gold to return around 0% real"

Under a gold standard, this was tautologically true. However,
1) We're under a fiat money system.
2) Gold is still a recognized monetary reserve asset.
3) Gold annual mine production is ~1.5% of stock, while fiat money supply grows much faster.

The base case ought to be -- if the relative preference of fiat to gold is stable then total gold market cap should keep pace with fiat money growth, which means gold price can grow at a positive real rate if fiat money supply growth supports expansion of the real economy which is the original argument for fiat over gold.

Herein also also lies the crux, the relative fiat/gold preference is far from stable and gives rise to significant periods of significant gold price rise/decline. Unfortunately there isn't a discernable correlation between gold price and money supply given the history so far. It has a much stronger relationship with real rates which I think is a better driver of portfolio allocation decisions.
Very reasonable points. I appreciate your insights. But I'm still going to keep my expectations low :twisted:
happydaze412
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Re: Gold is again on my head

Post by happydaze412 »

kjm wrote: Sat Sep 26, 2020 3:51 pm
I’m a big fan of the Permanent Portfolio, although it's not a popular choice around here.
Also a big fan of the permanent portfolio minus cash.

Ultimately, gold isn’t very strongly correlated to stocks or treasuries, so adding it to a stock/bond mix should improve risk adjusted returns.

Now is a tricky time for gold. The money supply has inflated and inflation is a tailwind for gold. However money velocity is down because we’re in a recession, which’s deflationary and therefore bad for gold prices. How gold does in the short to mid-term will depend on which of threes forces wins out.
Yes it is unprecedented can’t wait to see this play out. However if you asked me if I would rather dollar cost into gold and silver or hold US dollar currency. I would pick gold and silver any day. It’s a glorified savings account for retirement for me.

https://sdbullion.com/blog/financial-crisis-protection
stimulacra
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Re: Gold is again on my head

Post by stimulacra »

I've been 5% gold for the last several years.

Neutral on it overall. It's kept pace for the most part. It's just there.
jimbomahoney
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Re: Gold is again on my head

Post by jimbomahoney »

Always passive wrote: Sat Sep 26, 2020 2:23 pm Very interesting, thank you. Are you retired? I am. If not would you hold this allocation if you were?
I understand the current issue with bonds but I do not think that I can be that aggressive.
My portfolio is 35% equities (globally) and the rest in bonds. I was planning to gradually purchase gold at the expense of bonds to up to 10% of my portfolio.
No, I'm in the accumulation phase.

I know someone who is retired with a similar portfolio, but they halve the equity allocation and invest that in an uncorrelated (to equities) private fund.

He shares my views on bonds, so doesn't hold any (not through my influence - we just both happen to believe the same thing).

In retirement, I *might* go something like this:

20% Gold
5% Silver
25% Bonds
30% Equities
10% Cash
5% Crypto

But it's a long way off yet and the world will be a different place.
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Forester
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Re: Gold is again on my head

Post by Forester »

Gold improves minimum rolling returns across dire economic scenarios. Undiversified 60/40 retirement portfolio + conservative 3% withdrawal in the 1970s = Game Over.
Robot Monster
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Re: Gold is again on my head

Post by Robot Monster »

Forester wrote: Sun Sep 27, 2020 6:53 am Gold improves minimum rolling returns across dire economic scenarios. Undiversified 60/40 retirement portfolio + conservative 3% withdrawal in the 1970s = Game Over.
Haven't calculated a 3% withdrawal, but...

A 60/40 portfolio of US Stock Market / Intermediate Term Treasury portfolio, during the high inflationary period of Jan 1973 - Dec 1980, had an inflation-adjusted CAGR of -1.91%.
Source

***

As to the performance of gold when inflation is high...

Average performance when inflation above 4% (during 1960-1990)
Image
Source
DesertDiva
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Re: Gold is again on my head

Post by DesertDiva »

Investing in a gold miner is not the same as investing in physical gold.

Also, the WSJ noted that Mr. Buffett might not have made the investment in this company himself. One of Berkshire’s portfolio managers could have taken the position.

Personally, i follow my IPS and do not pay attention to the noise in the media or from bloggers. If I buy gold, its a piece of jewelry.
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Forester
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Re: Gold is again on my head

Post by Forester »

jimbomahoney wrote: Sat Sep 26, 2020 10:59 am Been investing in gold and silver for years.

I'm a big fan of the Permanent Portfolio, although it's not a popular choice around here.

Having said that, I have a major equity tilt and ZERO bonds, so it's not really a Permanent Portfolio.

I did a LOT of investigative work / backtesting (including rolling period, not just entire period) and found that a 1/3 split of gold/stocks/bonds performed very nicely (i.e. PP without cash). However, I'm happy to take the increased volatility by holding more equities and I believe that bonds are doomed as governments struggle to manage their debt (e.g. perpetual bonds, inflation etc.).

I realise that the future is unknowable, but I'm happy with a Portfolio as follows:

20% Gold
5% Silver
68% World Equities (matching closesly to each country GDP - e.g. 25% US, 15% China, 6% Japan etc.)
3% Cash (Enough for a few months / years living expenses)
4% Crypto (BTC)

You may be interested in the following:

https://www.youtube.com/watch?v=LA2Yr6NoZyA&t
That's basically my portfolio, about 1/4 gold the rest equities. Bonds leave me cold, I can't decide if bonds are boring or risky. I've seen that YT video before, that guy sure does like the 1971 starting point for gold :mrgreen: I think gold is fairly valued in the low $2ks and not as cheap as he thinks.
TheNightsToCome
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Re: Gold is again on my head

Post by TheNightsToCome »

Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Buffett purchased about 130 million ounces of silver in 1997.

He also said, "... if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

But then he purchased a large stake in airlines in recent years before selling at the bottom of the recent crash:

The so-called Oracle of Omaha had alluded to the airline sale earlier in Saturday’s meeting, when he said he’d made an “understandable mistake” when valuing the airline stocks as a near-global halt in travel due to the coronavirus sent their prices sharply lower.

https://www.cnbc.com/2020/05/02/warr...ronavirus.html
***
I purchased a roughly 7.5% gold position in 2018, and increased it to a little over 10% after reading the following from Karsten at Early Retirement Now:

https://earlyretirementnow.com/2020/01/ ... s-part-34/

The current high valuations of both stocks (PE 10 > 30) and bonds (10-year treasury at 0.658%) portend low long-term returns and an increased risk of large and/or prolonged downturns. This increases sequence of returns risk (SORR).

Karsten, a gold skeptic, examined the role of gold in reducing SORR and found that a 15% allocation increased the historical safe withdrawal rate, and worked best during some of the worst environments.

I've never been enthusiastic about holding gold, but the opportunity cost appears very low (given estimated stock and bond returns), i.e., I'm not enthusiastic about stocks or bonds either. I expect unhappy investment returns over the next 10-20 years. Based on the historical record, gold might help.
privateer79
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Re: Gold is again on my head

Post by privateer79 »

I was trying to get to 5% gold/silver by buying coins over time but started chickening out when gold got over 1300 oz... perhaps I should hold my nose and stick to that plan..

in march I switched to buying miners on the basic hypothesis: gold miners essentially convert Diesel (and some equipment depretiation) into gold.... Gold prices have doubled, and oil prices have fallen through the floor.... if you can turn a profit at 100$/barrel oil and 900$/oz gold... you should be shooting the lights out at 30$/barrel oil and 1900$/oz gold.
Freetime76
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Re: Gold is again on my head

Post by Freetime76 »

Alchemist wrote: Sat Sep 26, 2020 8:24 pm
Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
First there is nothing special about gold. It is just a commodity like oil, copper, or wood. It happens to be pretty and previously minted into coins so people ascribe emotional value to it that is not supported on an economic utility basis.

Secondly, Buffett buy's companies he sees at attractive valuations versus their fundamentals. Buying a gold producer is no more a Buffett endorsement of buying gold bullion than his investment in oil companies is an endorsement to buy oil futures.

If you have not already I highly recommend reading the only authorized biography on Buffett, Snowball, when you get the chance. It is not a book on investing but learning more about Mr Buffett's life story will provide illumination into his business actions that go far beyond the headlines.

ETA: Snowball audiobook is also very well done if you like audiobooks.
Snowball is an excellent read. Well worth the time.
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willthrill81
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Re: Gold is again on my head

Post by willthrill81 »

NoRegret wrote: Sat Sep 26, 2020 8:29 pm
000 wrote: Sat Sep 26, 2020 4:58 pm That said, I expect Gold to return around 0% real with high volatility. I do not view it as a growth asset.
"Gold to return around 0% real"

Under a gold standard, this was tautologically true. However,
1) We're under a fiat money system.
2) Gold is still a recognized monetary reserve asset.
3) Gold annual mine production is ~1.5% of stock, while fiat money supply grows much faster.

The base case ought to be -- if the relative preference of fiat to gold is stable then total gold market cap should keep pace with fiat money growth, which means gold price can grow at a positive real rate if fiat money supply growth supports expansion of the real economy which is the original argument for fiat over gold.

Herein also also lies the crux, the relative fiat/gold preference is far from stable and gives rise to significant periods of significant gold price rise/decline. Unfortunately there isn't a discernable correlation between gold price and money supply given the history so far. It has a much stronger relationship with real rates which I think is a better driver of portfolio allocation decisions.
Good points.

I have often pointed out that the 'statement that gold's expected real return is zero' is only a theory and far from a financial fact, and the data we have so far do not support that theory very well. It's outperformed stocks by a big margin over the last two decades. Maybe that was just luck, but maybe it wasn't.

Historically, a 5-10% allocation to gold certainly helped long-term investors, especially retirees, over the last ~50 years.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
tmcc
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Re: Gold is again on my head

Post by tmcc »

has anyone ever successfully purchased gold at spot prices? I kind of want to get some gold teeth made
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Re: Gold is again on my head

Post by willthrill81 »

tmcc wrote: Sun Sep 27, 2020 3:57 pm has anyone ever successfully purchased gold at spot prices? I kind of want to get some gold teeth made
No, you basically cannot buy gold at spot because the spot price doesn't reflect any of the dealer's costs in getting the gold to you. If you buy hundreds of ounces or more at once, you can negotiate a tiny premium over spot though.

This year, the spread in spot prices vs. physical prices (i.e. what you can buy physical gold for) for small quantities of gold has expanded. For 1 oz. of gold, the spread is about $60 for gold bars. For silver, the relative premium has expanded even more, about $3 over spot for 1 oz. silver bars.
Last edited by willthrill81 on Sun Sep 27, 2020 4:09 pm, edited 1 time in total.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
tmcc
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Re: Gold is again on my head

Post by tmcc »

willthrill81 wrote: Sun Sep 27, 2020 4:04 pm
tmcc wrote: Sun Sep 27, 2020 3:57 pm has anyone ever successfully purchased gold at spot prices? I kind of want to get some gold teeth made
No, you basically cannot buy gold at spot because the spot price doesn't reflect any of the dealer's costs in getting the gold to you. If you buy hundreds of ounces or more at once, you can negotiate a tiny premium over spot though.
yeah. i believe the CME delivery minimum is 100oz or 3kg. i'm sure there are fees associated with taking physical delivery from their depositories. i dont need that many teeth. maybe at dow 1,000,0000
gougou
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Re: Gold is again on my head

Post by gougou »

Buying a gold producer is very different from buy the gold metal itself. For example, it's entirely reasonable to buy some oil producer stocks for long term gain, but it's pretty stupid to buy oil barrels and pay significant costs to store them for long term gain.
tmcc
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Re: Gold is again on my head

Post by tmcc »

what should I do with the pallet of gasoline drums in my garage?
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Re: Gold is again on my head

Post by 000 »

gougou wrote: Sun Sep 27, 2020 5:05 pm Buying a gold producer is very different from buy the gold metal itself. For example, it's entirely reasonable to buy some oil producer stocks for long term gain, but it's pretty stupid to buy oil barrels and pay significant costs to store them for long term gain.
The US Government hoards both Gold and Oil. Are they stupid?
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Re: Gold is again on my head

Post by DesertDiva »

000 wrote: Sun Sep 27, 2020 7:23 pm
gougou wrote: Sun Sep 27, 2020 5:05 pm Buying a gold producer is very different from buy the gold metal itself. For example, it's entirely reasonable to buy some oil producer stocks for long term gain, but it's pretty stupid to buy oil barrels and pay significant costs to store them for long term gain.
The US Government hoards both Gold and Oil. Are they stupid?
They also have in excess of $20 trillion in debt...
000
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Re: Gold is again on my head

Post by 000 »

DesertDiva wrote: Sun Sep 27, 2020 9:24 pm
000 wrote: Sun Sep 27, 2020 7:23 pm
gougou wrote: Sun Sep 27, 2020 5:05 pm Buying a gold producer is very different from buy the gold metal itself. For example, it's entirely reasonable to buy some oil producer stocks for long term gain, but it's pretty stupid to buy oil barrels and pay significant costs to store them for long term gain.
The US Government hoards both Gold and Oil. Are they stupid?
They also have in excess of $20 trillion in debt...
A positive allocation to Gold and Oil.
A negative allocation to cash.

The US Government has a leveraged long position in Gold and Oil. :twisted:
Pu239
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Re: Gold is again on my head

Post by Pu239 »

tmcc wrote: Sun Sep 27, 2020 3:57 pm has anyone ever successfully purchased gold at spot prices? I kind of want to get some gold teeth made
Become a 'dealer' and offer buyers better than dealer prices. But dental gold is far from pure. Maybe 50% gold.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
Pu239
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Re: Gold is again on my head

Post by Pu239 »

000 wrote: Sun Sep 27, 2020 7:23 pm
gougou wrote: Sun Sep 27, 2020 5:05 pm Buying a gold producer is very different from buy the gold metal itself. For example, it's entirely reasonable to buy some oil producer stocks for long term gain, but it's pretty stupid to buy oil barrels and pay significant costs to store them for long term gain.
The US Government hoards both Gold and Oil. Are they stupid?
Oil is a critical commodity used in times of national defense such as war and oil embargo. Hoarding oil make sense as perhaps does accumulating other strategic materials. We are stuck with gold from the 'barbaric relic' days - I doubt we've been buying much since those days, much less actively hoarding it as implied. Some central banks sold gold during the 1990s which only caused the price to drop further. We have less than $700 billion dollars worth of gold at present price. It's a drop in the bucket compared with our total money supply of around $45T. So with regard to gold, yes, we may be stupid. Norway has decided they don't like being stupid. Now might just be a good time for us to sell some - sell high, buy low later.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
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Re: Gold is again on my head

Post by Random Musings »

tmcc wrote: Sun Sep 27, 2020 3:57 pm has anyone ever successfully purchased gold at spot prices? I kind of want to get some gold teeth made
Got a feeling I've been here before

RM
I figure the odds be fifty-fifty I just might have something to say. FZ
000
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Re: Gold is again on my head

Post by 000 »

Pu239 wrote: Sun Sep 27, 2020 10:44 pm Oil is a critical commodity used in times of national defense such as war and oil embargo. Hoarding oil make sense as perhaps does accumulating other strategic materials. We are stuck with gold from the 'barbaric relic' days - I doubt we've been buying much since those days, much less actively hoarding it as implied. Some central banks sold gold during the 1990s which only caused the price to drop further. We have less than $700 billion dollars worth of gold at present price. It's a drop in the bucket compared with our total money supply of around $45T. So with regard to gold, yes, we may be stupid. Norway has decided they don't like being stupid. Now might just be a good time for us to sell some - sell high, buy low later.
"We" don't have $700 billion dollars worth of Gold. The Government does.

It always amazes me that people put more trust in USD than the issuer of USD itself does.

The US Government is short USD and long Gold.
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Re: Gold is again on my head

Post by Pu239 »

000 wrote: Mon Sep 28, 2020 4:11 pm
"We" don't have $700 billion dollars worth of Gold. The Government does.

It always amazes me that people put more trust in USD than the issuer of USD itself does.

The US Government is short USD and long Gold.
The "We the people" government or some other government?

People have different priorities than our government. Owning gold is low on the list for many if not most.

Does the US government have a choice? Sell much gold and the price will drop significantly. This happened during the 1990s. Gold serves a useful function now that we have so much of it but does $700B really defend $45T very effectively? Time will tell.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
jimbomahoney
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Re: Gold is again on my head

Post by jimbomahoney »

Pu239 wrote: Tue Sep 29, 2020 12:33 am Gold serves a useful function now that we have so much of it but does $700B really defend $45T very effectively? Time will tell.
If gold were revlaued it would. There's a non-zero possibility of that being one of the solutions to the growing debt pile.
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Re: Gold is again on my head

Post by 000 »

jimbomahoney wrote: Tue Sep 29, 2020 3:07 am
Pu239 wrote: Tue Sep 29, 2020 12:33 am Gold serves a useful function now that we have so much of it but does $700B really defend $45T very effectively? Time will tell.
If gold were revlaued it would. There's a non-zero possibility of that being one of the solutions to the growing debt pile.
What exactly do you mean here by Gold being revalued?
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Re: Gold is again on my head

Post by DarkHelmetII »

Gold is insurance, not an investment. Must be held at constant % over decades otherwise your portfolio will be fleeced by perpetual purchases at highs and sells at lows.
heyyou
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Re: Gold is again on my head

Post by heyyou »

As a passive, passive investor, gold will be another one of those missed opportunities for me, but so far, I'm still okay, having just started SS at age 70, 15 years after retiring.
Constantly seeking optimal is a greater problem than just accepting that there will be portfolio fluctuations and missed opportunities.
Knowing that adapting spending to portfolio value does help portfolio longevity in retirement, I'm skeptical of steadily trying to optimize portfolio performance.
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Re: Gold is again on my head

Post by sperry8 »

Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
Buffett invested in a gold producer decades ago as well. This is old news. A gold producer is not the same thing as gold itself.

https://thereformedbroker.com/2020/08/3 ... d-bet-etc/
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
jimbomahoney
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Re: Gold is again on my head

Post by jimbomahoney »

000 wrote: Tue Sep 29, 2020 3:19 am
jimbomahoney wrote: Tue Sep 29, 2020 3:07 am
Pu239 wrote: Tue Sep 29, 2020 12:33 am Gold serves a useful function now that we have so much of it but does $700B really defend $45T very effectively? Time will tell.
If gold were revlaued it would. There's a non-zero possibility of that being one of the solutions to the growing debt pile.
What exactly do you mean here by Gold being revalued?
Some posit that one solution the to debt crisis (i.e. there is more debt than real stuff to pay it off) would be if the world CBs coordinated a (probably unannounced / overnight) revaluation of gold.

For example, if a country has 1 billion in gold but 10 billion in debt, then simply revaluing the gold at 10x today's price "solves" the problem.

It seems to be a fringe / conspiracy theory idea, but there is some merit in it.

http://fofoa.blogspot.com/
Robot Monster
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Re: Gold is again on my head

Post by Robot Monster »

sperry8 wrote: Tue Sep 29, 2020 10:45 am
Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
Buffett invested in a gold producer decades ago as well. This is old news. A gold producer is not the same thing as gold itself.

https://thereformedbroker.com/2020/08/3 ... d-bet-etc/
That article you linked to does not explicitly say Buffett invested in a gold producer decades ago. It says, "Thirty years earlier, Berkshire had made other investments in metals and mining." Considering there are others metals than gold, including non-precious metals, one might wonder why this statement isn't a tad more specific.
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sperry8
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Re: Gold is again on my head

Post by sperry8 »

Robot Monster wrote: Wed Sep 30, 2020 9:25 am
sperry8 wrote: Tue Sep 29, 2020 10:45 am
Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
Buffett invested in a gold producer decades ago as well. This is old news. A gold producer is not the same thing as gold itself.

https://thereformedbroker.com/2020/08/3 ... d-bet-etc/
That article you linked to does not explicitly say Buffett invested in a gold producer decades ago. It says, "Thirty years earlier, Berkshire had made other investments in metals and mining." Considering there are others metals than gold, including non-precious metals, one might wonder why this statement isn't a tad more specific.
The point of the article remains. Old news. What we are reading today is clickbait. He did not invest specifically in gold today (or then). He invests(ed) in ancillary things surrounding it, and likely this time it wasn't even him (but his two generals who do his investing).
BH contest results: 2019: #233 of 645 | 18: #150 of 493 | 17: #516 of 647 | 16: #121 of 610 | 15: #18 of 552 | 14: #225 of 503 | 13: #383 of 433 | 12: #366 of 410 | 11: #113 of 369 | 10: #53 of 282
NoRegret
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Re: Gold is again on my head

Post by NoRegret »

Robot Monster wrote: Wed Sep 30, 2020 9:25 am
sperry8 wrote: Tue Sep 29, 2020 10:45 am
Always passive wrote: Sat Sep 26, 2020 10:25 am I have never invested in gold. Always agreed with Buffett on his negative position. And suddenly I read the he has bought into a gold producer. Wow! Either he forgot what he has been saying for many years, or lost his marbles, or I do not get it.
Here from “A wealth of common sense“ a podcast to think about it.
https://awealthofcommonsense.com/2020/0 ... g-in-gold/

Is anyone recently started investing in it? Why?
Love to here from you
Buffett invested in a gold producer decades ago as well. This is old news. A gold producer is not the same thing as gold itself.

https://thereformedbroker.com/2020/08/3 ... d-bet-etc/
That article you linked to does not explicitly say Buffett invested in a gold producer decades ago. It says, "Thirty years earlier, Berkshire had made other investments in metals and mining." Considering there are others metals than gold, including non-precious metals, one might wonder why this statement isn't a tad more specific.
He speculated in silver. A lot of silver relative to tradable stock and world production.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
tmcc
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Re: Gold is again on my head

Post by tmcc »

jimbomahoney wrote: Wed Sep 30, 2020 7:47 am
000 wrote: Tue Sep 29, 2020 3:19 am
jimbomahoney wrote: Tue Sep 29, 2020 3:07 am
Pu239 wrote: Tue Sep 29, 2020 12:33 am Gold serves a useful function now that we have so much of it but does $700B really defend $45T very effectively? Time will tell.
If gold were revlaued it would. There's a non-zero possibility of that being one of the solutions to the growing debt pile.
What exactly do you mean here by Gold being revalued?
Some posit that one solution the to debt crisis (i.e. there is more debt than real stuff to pay it off) would be if the world CBs coordinated a (probably unannounced / overnight) revaluation of gold.

For example, if a country has 1 billion in gold but 10 billion in debt, then simply revaluing the gold at 10x today's price "solves" the problem.

It seems to be a fringe / conspiracy theory idea, but there is some merit in it.

http://fofoa.blogspot.com/
sort of. no matter how you dress it up, this boils down to a massive central banking default.

the only way a revaluation like that will occur is if you peg the FX to something. guess what happens then? blackmarkets will be the only market. gold will be bid up, paper debt will crater and likely be called, interest rates will go up and bitcoin will be king again
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