The GOLD scream room

[ochotona]

I don't think we've really hit the bottom of sentiment. Honestly... a goodly fraction of Baby Boomers who hold gold are going to have to die, and then their Millennial heirs are going to sell it off when they inherit. Gold may go lower.

Someday we will hit a geological peak gold scenario, and then the US budget and debt problem will eventually flare up.

That's why I only hold 10%. Because it will be hard to hold onto through crap like we are going through now for year after year, but it could really take off, we just don't know when. Could be in 10 years. Then you won't be able to get physical when you need to. My 10% will rise to 25% of my portfolio, then I'll have a PP.

[barrett]

I don't think we've really hit the bottom of sentiment. Honestly... a goodly fraction of Baby Boomers who hold gold are going to have to die, and then their Millennial heirs are going to sell it off when they inherit. Gold may go lower.

Ocho, Do you have any good links on what percentage of his or her wealth the average Boomer has in gold? I would think it would be quite low (and that some of it might be stashed in long-forgotten hiding places!).

I found this little bit of terrible investing advice while searching for the answer to the above:

http://www.wyattresearch.com/article/wh ... -buy-gold/

For those of you uninterested in reading the link, it's a short article from late 2011 saying that one should hold off on buying stocks until an ounce of gold is worth roughly the same as the level of the Dow Industrial Index ("So for instance, if the Dow drops to 5000 and gold rises to $5,000 an ounce, I would sell my gold and buy the Dow.").

Ouch!!!

[ochotona]

I am sure the "average" Boomer has way less than 1% in gold, but what I mean is that many gold investors are grey haired. This is an asset class that most Millenials bypass. It's too old fashioned.

[dualstow]

(barrett wrote)
For those of you uninterested in reading the link, it's a short article from late 2011 saying that one should hold off on buying stocks until an ounce of gold is worth roughly the same as the level of the Dow Industrial Index ("So for instance, if the Dow drops to 5000 and gold rises to $5,000 an ounce, I would sell my gold and buy the Dow.").

Ouch!!!

ha!

[Cortopassi]

I found this little bit of terrible investing advice while searching for the answer to the above:

http://www.wyattresearch.com/article/wh ... -buy-gold/

People get married to an idea or position and have a hard time letting go, with pretty much anything. Here is a guy (who I used to read) who has been haranguing against Amazon for years... you can go go back to 2015 posts about him talking about shorting Amazon, and him doing it, and being underwater, but not worried. AMZN was $350. It is what, over $1800 now? And he still talks about their fraud and ponzi accounting (I assume waiting for the day they do crash, and then claim he was right).

http://investmentresearchdynamics.com/t ... rt-amazon/

From Apr 28, 2015: "Although shorting AMZN requires the ability and willingness to actively manage your risk exposure, it will ultimately be a grand-slam home run trade. "

But I am sure somehow it is justified in his mind that if it did go down a couple % for a short while after he posted his article, he was right.

[ochotona]

Look out below! $1231 now. Please touch $950 sometime in the next couple of years.

[buddtholomew]

Garbage, trash, whatever you want to call it.
Thank god for the anti-PP assets (SCV).
That’s right, Budd is an idiot don’t listen to his whining while gold steals all your hard earned money.

[Cortopassi]

Kind of sad, the angst this still causes.

My PP for the year has ranged from -1.85% to 2.66%, currently at -0.79%

Why on earth I still even look is beyond me. 2018 will likely be a lost year, whatever.

[buddtholomew]

Kind of sad, the angst this still causes.

My PP for the year has ranged from -1.85% to 2.66%, currently at -0.79%

Why on earth I still even look is beyond me. 2018 will likely be a lost year, whatever.

I have nothing left to say either.
Can’t help but feel like a lemming although I only have 7.5% total portfolio in Gold.
Could be worse thinking about other posters here.

[eufo]

Definitely looking forward to some more pain in gold. I don't have a particular target for spot that I'm wanting, but downward for now will help me accumulate.

MOAR GOLD!

A good friend of mine said I should get a parrot and be a pirate because of my gold (and now silver) coin interest.

ARRRRRR!!!! I BE TAKIN' ALL YER GOLD!

Admittedly, it's becoming a little bit of an obsession.

[Cortopassi]

Definitely looking forward to some more pain in gold. I don't have a particular target for spot that I'm wanting, but downward for now will help me accumulate.

MOAR GOLD!

A good friend of mine said I should get a parrot and be a pirate because of my gold (and now silver) coin interest.

ARRRRRR!!!! I BE TAKIN' ALL YER GOLD!

Admittedly, it's becoming a little bit of an obsession.

I'm sure I don't have to tell you, I still hear way too many people talking about it being on sale, backing up the truck, stacking more, etc. I still think gold deserves a darn good percentage, but don't get obsessed! It is a harsh mistress.

[portfolyness]

I'm seeding a portfolio for the first time right now with non-retirement-account money (i.e. money to either spend a couple years not working or eventually buy a home with in a few years), and from my perspective gold feels like the lagging asset to be focused on lumping into first - so I've just been watching the GLDM price and buying via robinhood for the moment and buying more as things dip (e.g. bought more today @ GLDM~12.29, though have also been screaming since I bought some PHYS/goldmoney back when gold was being marketed heavily (and wasn't financially organized) in 2011).

Any reason one should be doing otherwise? I'm still keeping most money in cash/treasuries and trying to finally coerce myself into seeding my stocks allocation (VTSAX/VSIAX/some VTMGX).

Having a hard time seeing gold crash to 950 again, but do remember the days when it was valued at 800 during the '08 election / recession.


EDIT: I should've read the other posts in this thread first - there's no good call on timing. Eh,finding myself buying small amounts anyway and watching where things go.

[eufo]

I'm sure I don't have to tell you, I still hear way too many people talking about it being on sale, backing up the truck, stacking more, etc.

Really? That hasn't been my experience. I hear FAR more calling gold a relic with no dividend or just not talking about gold at all. It is a hated asset right now, which makes me like it all the more.

I still think gold deserves a darn good percentage, but don't get obsessed! It is a harsh mistress.

Indeed, but still worth that dance.

[ochotona]

The hatedness needs to push it under $1000

[buddtholomew]

Look out below! $1231 now. Please touch $950 sometime in the next couple of years.

Ocho, we are notorious for moving the goal posts...
When it hits 950 USD why can’t it go lower?
I suspect when it’s time to come you will wait for lower prices.
Weren’t you just recently waiting for 1280 or 1260?

[ochotona]

Look out below! $1231 now. Please touch $950 sometime in the next couple of years.

Ocho, we are notorious for moving the goal posts...
When it hits 950 USD why can’t it go lower?
I suspect when it’s time to come you will wait for lower prices.
Weren’t you just recently waiting for 1280 or 1260?

I had a little cash, I did indeed buy some GLDM in my HSA account when gold was $1257... but I'm going to hang back and wait to see if the debacle gets worse

[buddtholomew]

Is everyone sitting down?
I’ve come full circle, acceptance.
Sticking to rebalancing bands and focusing on loss harvesting.
It’s easier that way for all of us!

[Cortopassi]

Loss harvesting. Nice. One day I would like to harvest gains. Doesn't feel like in my lifetime right now.

[Cortopassi]

A great article discussing the different time periods from 1972 to now and the ying-yang between gold and stocks.

https://pensionpartners.com/gold-bugs-v ... ket-bulls/

[Tyler]

A great article discussing the different time periods from 1972 to now and the ying-yang between gold and stocks.

https://pensionpartners.com/gold-bugs-v ... ket-bulls/

Nice! Thanks for sharing.

[Cortopassi]

This guy is a good writer. I suggest anyone having time go through their blog archive. Another great one on diversification and fear of missing out:

https://pensionpartners.com/diversifica ... ssing-out/

Snippets:

Any way you look at it (from a conservative to aggressive allocation), diversified portfolios have failed to keep pace with the juggernaut known as the S&P.

So why doesn’t everyone diversify?

Because diversifying means there will always be an asset class beating you. Today, that asset class is U.S. equities and the fear of missing out (FOMO) on further gains is palpable.

Over the past seven years, each of the following asset classes have all massively trailed U.S. equities: International bonds, U.S. investment grade bonds, U.S. Treasuries, Asia-Pacific stocks, European stocks, and Emerging Market stocks.

Of course, no one can be sure of what will happen over the next seven years and few can handle higher volatility/drawdowns than their risk tolerance suggests.

Which is why we diversify in the first place: to protect ourselves from the unknowable future and the visceral responses we all have to volatility/drawdowns. That protection is nothing to apologize for, even if it means massively underperforming the S&P 500 over a seven-year period. To the contrary, it is to be commended.

[Kbg]

I'm glad someone flagged the above as deceptive.

Let's try a reputable site (and note starting points make a BIG difference):

https://www.portfoliovisualizer.com/bac ... allocation

100% Gold vs. 100% US Total Stock Mkt (CAGR) through 5/31/18

1/1/72 Start: 7.47/10.37
1/1/82: 3.13/11.24
1/1/92: 4.84/9.55
1/1/02: 9.52/7.98
1/1/12: -3.23/14.92

Same as above, but cherry picking favorable dates for each asset class

1/1/72 - 12/31/80 (Gold Bull): 33.59/8.59
1/1/75 - 12/31/00 (Stock Bull): 1.45/15.73
1/1/81 - 12/31/99 (Gold Bear): -3.65/15.91
1/1/00 - 12/31/11 (Gold Bull): 14.77/1.18
1/1/00 - 12/31/02 (Stock Bear): 5.63/-14.31
1/1/08 - 12/31/08 (Stock Bear): 4.92/-37.04
1/1/11 - 12/31/15 (Gold Bear): -9.16/14.98
1/1/09 - 5/31/18 (Stock Bull): 3.82/14.95

So now that we have some unbiased and deliberately biased data points, what are our conclusions?

Perhaps some data will help...50/50 split between the two assets added to the end of the first table.

1/1/72: 7.47/10.37/10.24
1/1/82: 3.13/11.24/7.89
1/1/92: 4.84/9.55/7.93
1/1/02: 9.52/7.98/9.56
1/1/12: -3.23/14.92/6.34

If one runs the site's Monte Carlo simulation using the default values (the main thing is an annual 4.5% withdrawal rate) and the 10 percentile (bad luck) results you will note the following:

There is a 100% chance of running out of portfolio with a 100% stock or gold portfolio.

Best performance is 50/50 stock gold
Safest is the PP or 1/3rd each to Stk/Gld/LTTs

And for a slight twist...a simple dual momentum approach works quite well and beats a 50/50 port

Looks familiar...https://pensionpartners.com/gold-bugs-v ... -140339045

[Cortopassi]

And, he didn't like low rates when the Dems were in power. Hypocrites.

[modeljc]

I am a fan of PP. OK! So here is something that no one can do. Perdict the price of gold for 17 years out! Let me start with the price of Production: It is about $1100 to produce an ounce of gold. Why pay more!

Jumping to a conclusion gold will not be over $1900 for 17 years if you believe in the 17 years cycle.

Start with 1966 to 1983 it was gold. The top was about $800. Above the cost of production of about $250 or so!
Then 1983 to 2000 it was stocks. The cost of production was about $400.
2000 to 2017 saw a $1900 top in gold.

So gold bugs may need to wait if there is a 17 year cycle.

There is a lot research on the 17 year cycle. I just use it to think about what might work going forward.

So I bet we seen the top for years!

[sophie]

Is everyone sitting down?
I’ve come full circle, acceptance.
Sticking to rebalancing bands and focusing on loss harvesting.
It’s easier that way for all of us!

Who are you and what have you done with Buddtholomew!

Congrats to you! Your peace of mind will thank you. Put the gold investment out of sight/out of mind, and when you need it, it'll be there for you.

BTW I don't buy that 17 year cycle bit. Gold prices react to whatever's going on in the world, and what's happening now is not the same as what's happened in the past, nor the future. The world changes and its state will never be repeated. Even if the same event happens, say, at two time points 20 years apart, the state of the world at those time points is different so the reaction will be different. I just don't think anyone has enough information to make these sorts of predictions.