Barron's Making the Case for Gold

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topper1296
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Re: Barron's Making the Case for Gold

Post by topper1296 » Fri Dec 07, 2018 8:46 am

I have flipped back and forth on if I want or need a small allocation to gold/other commodity. I understand the case for a small allocation to gold, however gold and other commodities are meant to be traded and not held like stocks, bonds and cash.

And I'm not a trader.

WanderingDoc
Posts: 1271
Joined: Sat Aug 05, 2017 8:21 pm

Re: Barron's Making the Case for Gold

Post by WanderingDoc » Fri Dec 07, 2018 12:48 pm

TVD wrote:
Fri Dec 07, 2018 7:50 am
WanderingDoc wrote:
Thu Dec 06, 2018 3:22 am
TVD wrote:
Wed Dec 05, 2018 10:22 pm
"Gold is money, everything else is credit." J. Pierpont Morgan

Gold is money plain and simple. The fact that it is on the balance sheet of every major central bank should end any argument equating gold to a simple commodity.

The benefit of gold is not that it is just money but that it has no counterparty risk. When Deutsch Bank finally goes down the drain, everyone who does not currently understand this prior statement will understand what I am saying. This lack of counterparty risk makes gold even more undervalued than what it was back in 2000 (just look up the price). Many additional issues with gold make me like it over the long term so much so that I want to emulate Scrooge McDuck.

That being said, unfortunately, I think gold will go under 1000 USD before it goes higher (hopefully not). If it does, and it is still obtainable, you will probably never see those prices again in your lifetime. You know what to do.
Ok. You sound pretty convincing. Can you point me to a source that tells me how I can invest in gold? Buying physical gold bars isn't an option as I'd like to stay mobile.

Gold has had a 1% real return annualized from 1970 to present. This also.. mildly concerns me.
Hmmm...I'd would probably recommend more research before purchasing anything. Rickards "A new case for gold" has some good tips and may be a good start. In the end it is up to you to see what setup works best for you. There are many 3rd party storage facilities that are very good.

The purpose of gold isn't to grow wealth but to preserve wealth and the purchasing power of that wealth. How much you want to preserve is up to you.
Thank you. I've read that book about 1.5 years ago at my local Barnes and Noble. Can't say anything stuck with me/was that eye-opening.

Real estate is a great way to preserve your wealth due to a fixed rate mortgage being a great inflation hedge, also with tenants paying your mortgage and expenses :D

How do you feel about it? What % of your portfolio do you allocate to gold?
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

TVD
Posts: 33
Joined: Sun Jul 15, 2018 8:31 pm

Re: Barron's Making the Case for Gold

Post by TVD » Sat Dec 08, 2018 2:29 pm

WanderingDoc wrote:
Fri Dec 07, 2018 12:48 pm
TVD wrote:
Fri Dec 07, 2018 7:50 am
WanderingDoc wrote:
Thu Dec 06, 2018 3:22 am
TVD wrote:
Wed Dec 05, 2018 10:22 pm
"Gold is money, everything else is credit." J. Pierpont Morgan

Gold is money plain and simple. The fact that it is on the balance sheet of every major central bank should end any argument equating gold to a simple commodity.

The benefit of gold is not that it is just money but that it has no counterparty risk. When Deutsch Bank finally goes down the drain, everyone who does not currently understand this prior statement will understand what I am saying. This lack of counterparty risk makes gold even more undervalued than what it was back in 2000 (just look up the price). Many additional issues with gold make me like it over the long term so much so that I want to emulate Scrooge McDuck.

That being said, unfortunately, I think gold will go under 1000 USD before it goes higher (hopefully not). If it does, and it is still obtainable, you will probably never see those prices again in your lifetime. You know what to do.
Ok. You sound pretty convincing. Can you point me to a source that tells me how I can invest in gold? Buying physical gold bars isn't an option as I'd like to stay mobile.

Gold has had a 1% real return annualized from 1970 to present. This also.. mildly concerns me.
Hmmm...I'd would probably recommend more research before purchasing anything. Rickards "A new case for gold" has some good tips and may be a good start. In the end it is up to you to see what setup works best for you. There are many 3rd party storage facilities that are very good.

The purpose of gold isn't to grow wealth but to preserve wealth and the purchasing power of that wealth. How much you want to preserve is up to you.
Thank you. I've read that book about 1.5 years ago at my local Barnes and Noble. Can't say anything stuck with me/was that eye-opening.

Real estate is a great way to preserve your wealth due to a fixed rate mortgage being a great inflation hedge, also with tenants paying your mortgage and expenses :D

How do you feel about it? What % of your portfolio do you allocate to gold?
Thanks. If you have twitter, I would follow simon mikalovich https://twitter.com/S_Mikhailovich and some others they usually have good advice. Most of what is out there is geared to goldbugs and I think they are still going to have a period of disappointment before the sun finally comes out. Hes' not a goldbug and originally made money in credit markets. Real Vision has some good segments on gold too. Rickards has some points in his book on how to store gold, etc but he is a salesman for parts of his work.

If you can do well in real estate, that is great for you. I am not an expert in evaluating real estate and/or investing in it. (Although I did buy my current house in 2010 and do hold some guilt for likely fleecing the previous owner...just a little guilt though). I can see the argument of arbitraging a fixed rate with a rising interest rate environment. However, what if we actually entering a deflationary depression? It may only be brief but even monetary interventions in the 1930s did little to offset a similar situation until a war broke out. My only question would be what: is the contingency plan. I wouldn't want to get stuck with a lot of leverage in a relatively illiquid asset that is falling in value with decreased cash flow to finance the interest payments/taxes/etc because tenets cant afford the rent anymore? And are you in a state that protects squatters rights if that happens?

For me, I own my house outright, that is sufficient real estate at this time. If I am able to build enough of a stable asset base outside of my home then I would consider it if I pay in cash. I wouldn't do those crowdfunded real estate schemes because they will be exposed for what they truly are when sufficient liquidity dries up. FWIW.

Sorry, I don't discuss my asset allocations anymore as I have learned a lesson that a while back.

WanderingDoc
Posts: 1271
Joined: Sat Aug 05, 2017 8:21 pm

Re: Barron's Making the Case for Gold

Post by WanderingDoc » Sat Dec 08, 2018 4:37 pm

TVD wrote:
Sat Dec 08, 2018 2:29 pm
WanderingDoc wrote:
Fri Dec 07, 2018 12:48 pm
TVD wrote:
Fri Dec 07, 2018 7:50 am
WanderingDoc wrote:
Thu Dec 06, 2018 3:22 am
TVD wrote:
Wed Dec 05, 2018 10:22 pm
"Gold is money, everything else is credit." J. Pierpont Morgan

Gold is money plain and simple. The fact that it is on the balance sheet of every major central bank should end any argument equating gold to a simple commodity.

The benefit of gold is not that it is just money but that it has no counterparty risk. When Deutsch Bank finally goes down the drain, everyone who does not currently understand this prior statement will understand what I am saying. This lack of counterparty risk makes gold even more undervalued than what it was back in 2000 (just look up the price). Many additional issues with gold make me like it over the long term so much so that I want to emulate Scrooge McDuck.

That being said, unfortunately, I think gold will go under 1000 USD before it goes higher (hopefully not). If it does, and it is still obtainable, you will probably never see those prices again in your lifetime. You know what to do.
Ok. You sound pretty convincing. Can you point me to a source that tells me how I can invest in gold? Buying physical gold bars isn't an option as I'd like to stay mobile.

Gold has had a 1% real return annualized from 1970 to present. This also.. mildly concerns me.
Hmmm...I'd would probably recommend more research before purchasing anything. Rickards "A new case for gold" has some good tips and may be a good start. In the end it is up to you to see what setup works best for you. There are many 3rd party storage facilities that are very good.

The purpose of gold isn't to grow wealth but to preserve wealth and the purchasing power of that wealth. How much you want to preserve is up to you.
Thank you. I've read that book about 1.5 years ago at my local Barnes and Noble. Can't say anything stuck with me/was that eye-opening.

Real estate is a great way to preserve your wealth due to a fixed rate mortgage being a great inflation hedge, also with tenants paying your mortgage and expenses :D

How do you feel about it? What % of your portfolio do you allocate to gold?
Thanks. If you have twitter, I would follow simon mikalovich https://twitter.com/S_Mikhailovich and some others they usually have good advice. Most of what is out there is geared to goldbugs and I think they are still going to have a period of disappointment before the sun finally comes out. Hes' not a goldbug and originally made money in credit markets. Real Vision has some good segments on gold too. Rickards has some points in his book on how to store gold, etc but he is a salesman for parts of his work.

If you can do well in real estate, that is great for you. I am not an expert in evaluating real estate and/or investing in it. (Although I did buy my current house in 2010 and do hold some guilt for likely fleecing the previous owner...just a little guilt though). I can see the argument of arbitraging a fixed rate with a rising interest rate environment. However, what if we actually entering a deflationary depression? It may only be brief but even monetary interventions in the 1930s did little to offset a similar situation until a war broke out. My only question would be what: is the contingency plan. I wouldn't want to get stuck with a lot of leverage in a relatively illiquid asset that is falling in value with decreased cash flow to finance the interest payments/taxes/etc because tenets cant afford the rent anymore? And are you in a state that protects squatters rights if that happens?

For me, I own my house outright, that is sufficient real estate at this time. If I am able to build enough of a stable asset base outside of my home then I would consider it if I pay in cash. I wouldn't do those crowdfunded real estate schemes because they will be exposed for what they truly are when sufficient liquidity dries up. FWIW.

Sorry, I don't discuss my asset allocations anymore as I have learned a lesson that a while back.
Rents (and vacancies) move at snails pace. Even in the worst real estate market in the last 100 years (great recession), many places saw their rental income plateau, some saw a 3% increase, some saw a 1-2% decrease. Rents don't move like volatile assets. Class B and C apartment buildings actually saw decreased vacancy. This makes a lot of sense, when the economy isn't doing so good, people have to worry about basic necessities in Maslow's heirarchy of needs, shelter being at the top of the list. People have no problem giving up lattes, SUVs, and doggy day care, but you bet they will do anything and pay a higher %age of their income on rent to keep a roof over their head. This is exactly want happened to many of my colleagues all over the U.S. in '08-'11, rents plateaued or ticked up, and vancancies went down. This is why I've been praying for a real estate bear market in the areas I've interested in; sadly its been like a 1-5% decreased property values at most.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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