Post: #176

Why anyone would rather buy gold instead of stocks puzzles me.

Post: #177

Some guys say it does not hurt to have 3-5% gold in your portfolio. Anything more is speculating.Let the goldbugs have their gold. They can make money on it. Bt they seem to not understand that they can also lose as well. In an emergency where everyone tries to USE gold, I suspect the value would drop. GOLD IS NOT LEGAL CURRENCY so whatever.

Post: #178

(06-27-2013 07:44 PM)Teutatis Wrote:  Why anyone would rather buy gold instead of stocks puzzles me.

Well, on one level, Gold is like anything else.

If gold goes up, and stocks go down, would it still puzzle you?

Also, Gold is good because you can hold wealth outside of the banking system in a small portable place.

Post: #179

(06-27-2013 07:44 PM)Teutatis Wrote:  Why anyone would rather buy gold instead of stocks puzzles me.

Gold has a very close negative correlation to the purchasing power of the USD (and other fiat currencies). In other words, if the dollar was to tank in value, an investment in gold would almost perfectly offset it. If you think that inflation is going to go up, you would want to buy gold as it will keep its value (the amount of gold supply is practically fixed - changes minimally).

Stocks represent company ownership, and aren't likely to be good stores of value in real terms with high inflation. Stocks would offset inflation partially but it would depend heavily on the company...and investing in companies that produce gold wouldn't have the same effect as investing in gold itself.

For a similar reason, survivalists stock up guns - they would have bartering power in a situation where a $100 bill would only be good as kindling or toilet paper.

Diamonds, on the other hand, are monopolized by DeBeers, which uses its market power to keep most diamonds off the market, and are not a good store of value.

Keep in mind risk of counterfeited gold and storage costs (safe or deposit box, risk of robbery, etc) if buying physical gold, and tax treatment of non-physical investments (such as SPDR gold funds). Of course if you're a nutso living in a fallout bunker, you're going to bank on the physical stuff rather than risk your paper investments in gold to burn up during the apocalypse

Your mileage may vary

Post: #180

(06-27-2013 08:22 PM)polar Wrote:  

(06-27-2013 07:44 PM)Teutatis Wrote:  Why anyone would rather buy gold instead of stocks puzzles me.

Gold has a very close negative correlation to the purchasing power of the USD (and other fiat currencies). In other words, if the dollar was to tank in value, an investment in gold would almost perfectly offset it. If you think that inflation is going to go up, you would want to buy gold as it will keep its value (the amount of gold supply is practically fixed - changes minimally).

Stocks represent company ownership, and aren't likely to be good stores of value in real terms with high inflation. Stocks would offset inflation partially but it would depend heavily on the company...and investing in companies that produce gold wouldn't have the same effect as investing in gold itself.

For a similar reason, survivalists stock up guns - they would have bartering power in a situation where a $100 bill would only be good as kindling or toilet paper.

Diamonds, on the other hand, are monopolized by DeBeers, which uses its market power to keep most diamonds off the market, and are not a good store of value.

Your mileage may vary

You probably know more about this side of things then me. I'm mostly a technical day and swing trader ... but here are my thoughts.

In theory what you say is all valid if you look at historical asset performance. In the past gold stabilised portfolio volatility by counterbalancing risks and preserved purchasing power.

I think alot of this has diminished over the last year or so.

As a simple hedge to inflation, there simply isn’t rapid price growth to warrant a need to offset the rising prices of goods.

Volatility in Gold has exploded which changes the nature of it as a "safe" Investment also.

My opinion is that as a safe haven, inflation hedge and alternative store of wealth; gold has seen its fundamental position change.

Not to mention the current liquidity event which over time will likely take the price of Gold much lower.

Maybe this changes in the future...and maybe it doesn't which is why I'd rather be putting money into Equities where it seems very likely price will rise considerably over the next decade.

Post: #181

(06-27-2013 07:55 PM)jimukr104 Wrote:  GOLD IS NOT LEGAL CURRENCY so whatever.

I actually laughed on this one.

Post: #182

(06-27-2013 07:44 PM)Teutatis Wrote:  Why anyone would rather buy gold instead of stocks puzzles me.

I have both precious metals and stocks/equities.

Besides some of the common reasons. i.e. SHTF, dollar devaluation etc.

If I get in a wreck and get sued by the hospital, will they be able to find out about the gold? No.

If I screw up my taxes can the IRS put a lien against it. No.

If I do anything stupid that gets me sued. Can they garnish my gold coins? Nope.

If I get into a child support situation, can the state put liens against my gold? No.

If I need cash, can I sell gold fast and it pretty well at least holds its value and hedges against inflation vs holding cash? Yup.

That's enough reasons for me.

Post: #183

(01-27-2014 01:43 PM)FrenchCanadian Wrote:  

(06-27-2013 07:55 PM)jimukr104 Wrote:  GOLD IS NOT LEGAL CURRENCY so whatever.

I actually laughed on this one.

Me too.

Because my St Gaudens don't say $20 on them and I didn't pick up some 90% silver half dollars at the bank a few weeks ago (for face value).

Post: #184

(01-27-2014 04:34 PM)scubadude Wrote:  

(01-27-2014 01:43 PM)FrenchCanadian Wrote:  

(06-27-2013 07:55 PM)jimukr104 Wrote:  GOLD IS NOT LEGAL CURRENCY so whatever.

I actually laughed on this one.

Me too.

Because my St Gaudens don't say $20 on them and I didn't pick up some 90% silver half dollars at the bank a few weeks ago (for face value).

Which bank is exchanging silver half-dollars at face value?

Anyone have any thoughts on gold vs. gold mining stocks and stock funds? Thinking of putting some cash into the latter.

Post: #185

(01-28-2014 06:27 AM)Sp5 Wrote:  

(01-27-2014 04:34 PM)scubadude Wrote:  

(01-27-2014 01:43 PM)FrenchCanadian Wrote:  

(06-27-2013 07:55 PM)jimukr104 Wrote:  GOLD IS NOT LEGAL CURRENCY so whatever.

I actually laughed on this one.

Me too.

Because my St Gaudens don't say $20 on them and I didn't pick up some 90% silver half dollars at the bank a few weeks ago (for face value).

Which bank is exchanging silver half-dollars at face value?

Anyone have any thoughts on gold vs. gold mining stocks and stock funds? Thinking of putting some cash into the latter.

All of them. If they have the pre 64's they are just used at face value. On some of the treasure hunter forums, people buy 1000's of dollars of rolled coins a week and look for 90% coins. Then just dump them at a bank. It's called coin roll hunting.

I've tried it some. It's pretty tedious but not bad to do if you're watching TV. Probably found face value of 30-40 bucks in a couple weeks. This was with probably 15k worth of halves, dimes and quarters searched. All you need to do is peel the roll and look at the edges, the silver really pops out. Takes about 20 seconds a roll.

Post: #186

(01-28-2014 06:27 AM)Sp5 Wrote:  Anyone have any thoughts on gold vs. gold mining stocks and stock funds? Thinking of putting some cash into the latter.

First Commandment: Always take delivery.

http://the-moneychanger.com/answers/ten_...and_silver

If you want short term exposure to Gold for speculation the stocks and ETF's are good.

Post: #187

(01-28-2014 06:27 AM)Sp5 Wrote:  

(01-27-2014 04:34 PM)scubadude Wrote:  

(01-27-2014 01:43 PM)FrenchCanadian Wrote:  

(06-27-2013 07:55 PM)jimukr104 Wrote:  GOLD IS NOT LEGAL CURRENCY so whatever.

I actually laughed on this one.

Me too.

Because my St Gaudens don't say $20 on them and I didn't pick up some 90% silver half dollars at the bank a few weeks ago (for face value).

Which bank is exchanging silver half-dollars at face value?

Anyone have any thoughts on gold vs. gold mining stocks and stock funds? Thinking of putting some cash into the latter.

I do not see how gold and silver cannot rally this year, considering the poor fiscal condition of most western nations. I tried to find the article that I read in an email yesterday, but could I not locate it.

[quote]Over the past two months junior miners have been on a tear. The market barometer, Junior Gold Miners ETF (GDXJ), is up 17% over the past 60 days. And now the comeback may be gaining even more steam. An influx of industrial spending could be the boost that these beaten down shares have been looking for. That’s bullish for metals and mining companies, such as many of the businesses held in the S&P/TSX Venture Composite Index."

I am not so sure that mining shares have bottomed. Then again, trying to pick a bottom is a fool's errand. I am more conservative, so I tend to select intermediate mining companies and certainly not juniors that are only explorers (versus actual producers).

Post: #188

Some of you need to read history.

Not too long ago it was illegal to own gold in America, the government passed the gold confiscation act and people handed in their gold. Some people are saying they may re-instate this again.
History often repeats itself.

http://en.wikipedia.org/wiki/Executive_Order_6102

No one can predict what the economy will be like this year, the early indication is that it will be crap. The Canadian dollar has free falled like crazy and the media "experts" are predicting it will sink further, so in my case I stock up on Gold/Silver as a way to off set this.

Precious metals are being suppressed, so you should ask yourself why?

Post: #189

Our currency isn't backed by Gold anymore, so confiscation would be of no use to the Government when they can simply "ease" at will as they have been for the last 5 years.

Post: #190

(02-02-2014 11:15 AM)rudebwoy Wrote:  Some of you need to read history.

Not too long ago it was illegal to own gold in America, the government passed the gold confiscation act and people handed in their gold. Some people are saying they may re-instate this again.
History often repeats itself.

http://en.wikipedia.org/wiki/Executive_Order_6102

No one can predict what the economy will be like this year, the early indication is that it will be crap. The Canadian dollar has free falled like crazy and the media "experts" are predicting it will sink further, so in my case I stock up on Gold/Silver as a way to off set this.

Precious metals are being suppressed, so you should ask yourself why?

Rudebwoy:

I think you make a very good point about a fairly recent historical event.... laws against gold hoarding...

I do NOT claim to be any history expert; however, I am sure that bitcoin and various crypto currencies are going to play into various government actions, reactions and/or hostilities regarding the valuation of currencies and other asset classes, such as commodities.

Several fiat currencies are being printed like mad... which is likely going to continue to lower confidence in fiat currencies.

Various govt officials see bitcoin and other cryptocurriencies as threats - however, various govts have problems attempting to regulate these various cryptocurrencies or to shut them down b/c they are like peer to peer networking and tor and they are very difficult to control b/c there are networking effects... and potential revolutionary and destability implications.

Accordingly, some people consider bitcoin and other cryptocurrencies as the "new gold"... though crypto currencies remain very far lower than the market cap of gold.

Currently, gold has a market cap of about 6 trillion dollars, and currently, all of the crypto-currencies only have a market cap of about 13 billion, which can be seen at: http://coinmarketcap.com/

I anticipate that we are going to see developments in these areas during 2014.. whether doom and gloom, who knows? but I expect that cryptocurrencies will need to be factored into the calculation and prediction about what is going to happen.

Post: #191

@JayJuanGee - I agree with your sentiment.

I am not a believer that my money will be safe in a bank forever and ever. Ask the people in Argentina how they feel about banks.

Post: #192

What are the latest thoughts on stacking gold and silver?

Post: #193

POASTER: In all of this commentary, I refer to physical PMs, not the paper market. I don't see the point of being in the paper market for any reason other than pure speculation. If you can't hold it, you don't own it, and owning paper PMs makes no sense for people who want PMs to ride out some sort of economic apocalypse. Paper gold is no different from paper anything.

If you mean thoughts by professional commentators, opinion is all over the place. I've heard some people say that silver is going to hundreds of dollars by the end of the year as the US economy implodes/stock market bubble bursts. I've heard some people say that the price for PMs is going to weaken as money floods into the USD as a safe haven as economies in developing countries go off the rails. I've heard some people say that PMs will go up, then drop dramatically (silver at $12/oz), before going stratospheric. Pretty much every possible opinion can be found somewhere. At some level, I suspect that everyone is talking his book, and this is especially true of people involved in selling PMs. If PMs go up, according to them, it's a great time to buy because you'll make a fortune. If PMs go down, according to them, it's a great time to buy because you'll get bargains. Pretty much whatever happens, it's a great time to get other people to buy if you're a PM seller. So, I take those guys' opinions with a grain of salt.

The fundamental problem with gold stackers, I believe, is that none of their claims are falsifiable. If you point out that PMs were basically flat for 25 years and that they didn't keep pace with inflation, they'll then talk about market highs in 2011. Yet at that very time, everyone was screaming "buy, buy, buy". Anyone who bought in 2011 is in a world of hurt right now. Yet stackers come back and say it's okay because gold is going to [insert very large number] so everything is going to be fine at some undefined moment in the future. They absolutely refuse to define a scenario in which they are wrong. Avoid people in any situation (not just regarding PMs) who make unfalsifiable claims. At some level, they have absolutely no understanding of the time value of money. What if PMs flat line for the next 25 years before another spike again? What if you'll be dead in 25 years? Even if you won't, what opportunity costs would you incur in the meantime? I'm not a fan of Keynes, but his remark about markets remaining irrational longer than you can remain solvent is pertinent.

At least with stocks, you can make some sort of stab at fundamental value, right down to liquidation value if you want to be super conservative. Gold bugs, despite all of their claims about intrinsic value, can't actually say what that is for gold. The closest proxies you could arrive at would be cost of production and industrial/jewellery demand. Those still don't tell us the full picture, but even if they did, here is the really important part: the average gold bug has no idea what the cost of production or demand for gold is. All he knows, deep in his heart, is that gold is going to the moon once fiat currency collapses worldwide and he's going to be laughing at all of those naysayers. It's a religion to him, and just like in religion, there are plenty of big guys making a killing off preaching/selling to the little guy. Preachers have an incentive to preach the damnation/salvation dichotomy and their solution to it, because that's how they make their living. The average stacker on Youtube is not a high roller, and yet they have tens or hundreds of thousands of dollars in PMs. Most of them are making a very, very big one way bet on PMs, and I suspect that a lot of them are going to end up hurting a great deal. Some, of course, will do well. The operative word is "some".

As for my own personal behaviour and predictions of the future, I do believe that fiat currencies -- the USD, especially -- are ultimately unsustainable, but asking when they will implode is like asking how long a piece of string is. How the hell would I know? These things have a way of limping along for longer than anyone can predict. I do have some physical gold and silver, which I coincidentally happened to buy (almost to the day, I think) at the market low in November last year. That was pure luck on my part. There are a small number of numismatics I want to purchase this year, so I'll wait to see if prices go a bit lower first, though I might have to suck it up if they don't. Those are only small purchases, however. In terms of stacking generic PMs, I'll think about purchasing some silver if/when the price goes down below $17, and especially $16. I am fully aware that that would entirely be a speculative play, however. If silver goes down to $12, then I would likely buy a fair amount. I'm more interested in silver because of its greater price volatility, since I am under no pressure to buy or sell at any time, and so can take advantage of volatility.

My situation is a bit different to most, however for a couple of reasons. Firstly, I live in Taiwan, and buying PMs locally is expensive due to the premiums. So, I have two other options. The first is to import them, in which case I need to take into account shipping costs. That generally means that I would need to make fewer, but larger, purchases. I couldn't buy small amounts on a regular basis because of the high shipping costs. My other option would be to get my father to buy silver for me in Australia on my behalf. That is probably what I will do because of the lower costs, and also the ability to have greater access to a range of buyers and sellers. It's still a little more complicated than for many people, however.

The other issue for me is that I don't get paid regularly with my businesses. The upshot of it is that the times that I have income and when the prices of PMs are favourable may not coincide that well. So, I will then have to consider whether I sit on large amounts of cash or not for considerable amounts of time, especially since there are potential other places to deploy that cash, including in my businesses.

All of that is to say that whilst I don't think the USD (or other fiat currencies) will last forever, I'm not putting all of my eggs in the basket of it collapsing any time soon. I don't consider myself a stacker, and any PMs I buy will be speculative (which I am fine with, since I have other things also going on, including long term stock investments) and opportunistic.

If, on the other hand, you are asking whether you should be looking at stacking PMs, I know nothing about your situation, so I'll just offer some general advice for a young(ish) single guy, which is what I suspect the average demographic is here.

The first thing is that someone might want to be speculative and opportunistic, like I am, but I would not put all of my eggs in one basket in that case. Never bet what you can't afford to lose, and at your age, one of the biggest losses would be the huge opportunity cost of decades of compounding afforded in the stock market.

More important than putting money into this or that investment, I would say that the better option would be to invest in yourself. Develop skills/qualifications that will set you up for good earning potential in the future. Otherwise, try to develop a business. In the long term, either of those two paths would outperform gold doubling, tripling, quadrupling, etc. Beyond that, unless I had a very strong attachment to the place I was in, I'd be looking at setting myself up abroad outside of the West, even if just as a second/part-time option. That would require some start up costs. Again, putting $10,000 and six months into living abroad is probably going to offer a better long term return than putting $10,000 into a monster box of silver American Eagles.

Post: #194

Is anyone using Bullion Star or any other companies to buy/store gold overseas?

Post: #195

Just my opinion, I wouldn't trust anyone with my gold.

When times get tough, people will run with your gold.

It happened in the past.

Post: #196

rudebwoy, you're still into gold? Dude, it's not going to $5000/oz or will it be accepted if Armageddon happens.

Post: #197

APMEX "bargains" show up on slickdeals every once in a while, usually for gold or silver. I personally own some coins which I mainly bought because they looked cool to show off, but it's nice to know you have some physical currency in your hands.

Post: #198

The first page was the biggest LOL I've read in a while.

(04-20-2011 11:39 PM)rudebwoy Wrote:  Silver hit $45 today...buy buy folks

Post: #199

Well Gold is the lowest it's been since before the economic crash in 2008, it's been just over $1000/oz at around 1050. I wonder if it will really go back below $1000, but I think it's a low point right now and a good time to buy.

Post: #200

Last time I bought some was 2007, should have sold a few years ago, could buy more soon at the same price!