Always folks who need to chime in and say "gold is dumb" w/out providing explanations
Gold is a tough sell over there. An impossible sell.
I've tried to wake them up a couple of times by pointing out that Berkshire Hathaway also doesn't pay interest or dividends, so that "isn't an investment" either according to their very limited understand of investing.
Of course all I get back is spluttering about the value of the portfolio Berkshire Hathaway holds, even though in fact the shareholders of Berkshire Hathaway have no claim on that portfolio. The only way they can make money is by selling their shares to someone else who also has no claim on the underlying assets.
How exactly is that different from owning gold? Other than that with gold, you actually DO have the underlying asset.
The BH folks have some good reasons for their scepticsm. Ultimately we hope gold remains a good store of value and uncorrelated to equities. If it doesn’t, it’s economically a very stupid thing to invest in.
Ad Orientem wrote: ↑Sun Oct 14, 2018 12:12 pm
IMO the only really serious threat to gold as a store of value would be if someone figures out how to make it in a way that is economical.
Correct, but that would imply cheap transmutation, which would probably have numerous other effects that are hard to predict or hedge against.
I get synthetic diamonds but since Au is an element, wouldn’t creating it be akin to synthesizing Carbon? I agree with Tech. When they do that, they might be able to satisfy our material desires anyway.
I do wonder if SpaceX will find a massive amount of gold on an asteroid, but I’m willing to take that risk. Most of my money is safely stashed in Sears Holdings stock.
Kbg wrote: ↑Sun Oct 14, 2018 10:54 am
The BH folks have some good reasons for their scepticsm. Ultimately we hope gold remains a good store of value and uncorrelated to equities. If it doesn’t, it’s economically a very stupid thing to invest in.
And if the US stock market ceases to be an outlier in the world of investing, having 50% or more of your assets in that market may turn out to be a very stupid thing to invest in.
Yet they don't seem to realize that could happen.
Which is more likely:
1. That an asset that has had great value for thousands of years loses most or all of its value, or
2. That an asset with less than 100 years of track record loses most or all of its value?
Kbg wrote: ↑Sun Oct 14, 2018 10:54 am
The BH folks have some good reasons for their scepticsm. Ultimately we hope gold remains a good store of value and uncorrelated to equities. If it doesn’t, it’s economically a very stupid thing to invest in.
And if the US stock market ceases to be an outlier in the world of investing, having 50% or more of your assets in that market may turn out to be a very stupid thing to invest in.
Yet they don't seem to realize that could happen.
Which is more likely:
1. That an asset that has had great value for thousands of years loses most or all of its value, or
2. That an asset with less than 100 years of track record loses most or all of its value?
I know which of those seems more likely to me...
I think none of us know...in the store of value realm you have to consider crypto-currencies as a potential threat to gold. Clearly with all the hacking thefts, this isn't happening anytime soon. Stocks as an asset class have around 400 years of history and they completely trash any other asset for returns. This board seems to forget gold was worth whatever the US government said it was worth on Apr 5 1933 after which point it was a completely useless yellow metal so far as its purchasing power was concerned.
Don wrote: ↑Sun Oct 14, 2018 8:04 pm
Is this a good time to sell gold after it finally spiked last week?
I do not know when is good time to buy or sell anything. If portfolio components hit the rebalance bands, then yes, good time has arrived. Rather than that, sitting ducks.
Kbg wrote: ↑Sun Oct 14, 2018 8:59 pm
I think none of us know...in the store of value realm you have to consider crypto-currencies as a potential threat to gold. Clearly with all the hacking thefts, this isn't happening anytime soon. Stocks as an asset class have around 400 years of history and they completely trash any other asset for returns.
Which stock markets have been around for 400 years? Where are the returns documented?
Kbg wrote: ↑Sun Oct 14, 2018 10:54 am
This board seems to forget gold was worth whatever the US government said it was worth on Apr 5 1933 after which point it was a completely useless yellow metal so far as its purchasing power was concerned.
Mark Hulbert thinks the Hulbert newsletter gold sentiment index is too bullish too quickly... a contrarian sign indicating the risk of further declines ahead.
ochotona wrote: ↑Wed Oct 17, 2018 7:22 am
Mark Hulbert thinks the Hulbert newsletter gold sentiment index is too bullish too quickly... a contrarian sign indicating the risk of further declines ahead.
I swear, all these prognosticators are either perpetually bullish, perpetually bearish, or always hedging, playing Goldilocks, where the conditions are never just exactly right. But when they are, of course that's what they've been telling you for years. Cynical? Yes.
Ad Orientem wrote: ↑Tue Oct 23, 2018 2:11 pm
Gold is up. Bonds are up. Cash is doing what cash is supposed to. The only thing getting hammered is stocks.
You may want to double check...
Oh my God. This morning, I alternated CNBC with MeTV and two things were getting hammered: stocks and some poor old gym employee on Perry Mason. Back from a late lunch and errands and...the market has really sobered up!
Eh same as ever..PP gave up all the gains in Gld and LTT’s as soon as stocks caught a bid. At the end of trading, Gld was up .60 and LTT’s up .32 while S&P ended down -.54
buddtholomew wrote: ↑Tue Oct 23, 2018 3:03 pm
Eh same as ever..PP gave up all the gains in Gld and LTT’s as soon as stocks caught a bid. At the end of trading, Gld was up .60 and LTT’s up .32 while S&P ended down -.54
Yeah, but forgetting the day-to-day stuff, do you believe gold and long bonds will take care of you when there's a sustained downward trend in stocks. That is the important question.
buddtholomew wrote: ↑Tue Oct 23, 2018 3:03 pm
Eh same as ever..PP gave up all the gains in Gld and LTT’s as soon as stocks caught a bid. At the end of trading, Gld was up .60 and LTT’s up .32 while S&P ended down -.54
Yeah, but forgetting the day-to-day stuff, do you believe gold and long bonds will take care of you when there's a sustained downward trend in stocks. That is the important question.
I don’t know...we are in correction territory already and both gold and LTT’s are down YTD. So to answer your question, I don’t think they will protect in a downturn unless stocks are pummeled. At that point one should be a stock buyer anyway.
