East germans (USSR occupied) used barter system. True antifragility. Trade was often conducted in vodka bottles and eggs. Currency was worthless and depreciated by the day/week.

I would listen to WestCoast. That being said my net-worth is still low, as all my income is towards paying off debts (student loans).

Best idea I've heard yet DVY. Buy and stock up on bottles of liquor if you think shit will hit the fan. Liquor stores will be the first places robbed and looted and it will be worth far more than gold.

(11-25-2013 02:16 PM)j r Wrote:  I'll write more about my opinions on gold and the dollar when I am in front of a real keyboard, but my main problem with gold as an investment is that it's purely a bet on price. It doesn't compound and it pays no dividends.

Believe me, I know exactly where you are coming from. I thought just like you, before I read dozens of books and hundreds of articles on the topic -- and then studied the historical price charts from many financial eras.

______________________________

BTW: my advice to the OP, a prudent portfolio if you expect a serious financial crisis consists of placing your cash into four asset categories, at 25% each:

1. Gold and silver -- and the stock of gold-and-silver intermediate-size mining companies (not juniors, unless they are seriously producing and not just exploring). The major producers are alright, but not the best.

2. Cash (if serious deflation occurs or for buying assets at bargain basement prices when blood flows in the street).

3. A handful of cream-of-the-crop Blue Chip dividend-producing equities. Companies with the likelihood of surviving, and even thriving, in any financial maelstrom. A company such as Johnson and Johnson springs to mind. When I say a handful, I really mean a handful. Only that many exist. Any more than that and you need to buy Swiss or German cream-of-the-crop Blue Chip dividend-producing equities.

4. Productive farmland, preferably in a foreign country.

The next crisis will almost assuredly be caused by the poor fiscal mismanagement of the world's nation-states. So, capital flight will most likely be from the bond markets, which is why I have not included them.

This reminds me of someone I knew who was an asset manager for some eccentric millionaire. The millionaire just messed around all day, he inherited his fortune. The asset manager just happened to meet the guy some day. A good friend of mine became involved with them, who has excellent connections in industry.

Over 50+ good deals directly from his contacts found their way into their meeting rooms, not every idea is going to succeed, but out of 50 private deals from a connected source, you have to be able to find something in there.

To this day i'm not sure of any projects they've taken on, except funding their nearest pizza store.

The asset manager was so focused on not having any risk that he completely missed out of the opportunity to make a profit.

The only rule to investing is this:
Do not invest more than you are willing to lose.

Why would anybody invest in developed government bonds now with interest rates being close to non-existant? Any bonds issued now can pretty much only go down in value interest rates are so low.

Is now coming the time to invest in Turkey?. Lira is getting cheaper.

For the past couple of years the smart money has been buying worthless Cuban government debt.

http://www.cnbc.com/id/49437343

The idea being that when they renormalise relations with the rest of the world - they will settle their debts. Resulting in big profits.

It is my favourite investing idea. I first heard about it in The Spectator magazine about 2 years ago.

Apparently the US bought up Iraqi government debt before the Iraq war. And then made a big profit when the new government settled the debt. Seems an ingenious way of profiting from war.

(12-27-2013 12:43 PM)cardguy Wrote:  Apparently the US bought up Iraqi government debt before the Iraq war. And then made a big profit when the new government settled the debt. Seems an ingenious way of profiting from war.

That sounds interesting. Do you have a web link?

People have been applying the logic to the Iraqi Dinar without any luck. I am curious whether debt is different.

Check out the link I gave before.

http://www.cnbc.com/id/49437343

Below is an excerpt from above:

Quote: Leadership change is frequently good for deadbeat sovereign bonds.

Iraqi debt, for example, traded at 10 cents for years during the period of U.S. sanctions against the country. After the U.S. invasion, a debt settlement was negotiated, and with past-due interest, bond holders received 32 cents on the dollar.

Liberian debt traded at 3 cents on the dollar in the 1990s. When former World Bank economist Ellen Sirleaf became president, the country bought back the debt at 21 cents—the high price due to substantial past-due interest.

When the U.S. embargo against Vietnam was lifted in 1993, Vietnamese debt appreciated 500% in five years. In Yugoslavia, after Milosevic was deposed and the embargo lifted, the country's debt skyrocketed almost immediately in September of 2000.

When holders of bonds make claims against countries for unpaid debt, they aren't just asking for the payment of the principal, they also make a claim for past-due interest or PDI. The longer the bond is unpaid, the more the PDI grows, through the power of compounding.

The above seems like an interesting angle in terms of how the US might try and fund (and profit from) its wars. I am surprised that I have never heard liberals mention it.

90% cash, 10% highly speculative........ So what would/could/should we do with the 10%?

For those who are interested in Taleb, barbell strategies, volatility plays, etc. check out interviews and writing by fund manger Jerry Haworth.

In my experience(still young but started since I was 14) thus far luck is a great factor in the stock market. Due diligence is good but I've doubled my money in the last 2 years from investing into people . Of course it small money compared to im sure people on here with 20k +. But I read that that average return a year is 11% but i've done 100% twice . Of course the game changes when you have more money and treat it as "your" money. I've learned from my father in his company; he invest company money and doesn't factor in this "self" factor and isn't as careful as this other manager and in the end his decisions ALWAYS work out better in the long run. You can say i'm doing the same and in a sense being reckless but results are results. I'm reading tons of books on stocks/ international stocks / short selling. Its helpful but so far none of its useful till I have a career or make a solid pay check where im satisfied with "11%".