Gyroscopic Investing

https://goldprice.org/gold-price-japan.html


Gold looks to be doing its job in Japan.

Up over 30% in a year.

whatchamacallit wrote: ↑Fri Apr 22, 2022 2:23 pm https://goldprice.org/gold-price-japan.html


Gold looks to be doing its job in Japan.

Up over 30% in a year.

It’s always interesting to take the dollar out of the equation when looking at gold!

Gold dropped below US$1900.
I bought this morning, and now I see it’s dropped another $10 Glad I didn’t buy very much at all! Ochotona* had the right idea: drip in a little at a time.

*Damn I had to look up his name

Congratulations! You purchased a tremendously undervalued asset.

https://twitter.com/uselinkinv/status/1 ... tvNYQ&s=19

murphy_p_t wrote: ↑Wed Apr 27, 2022 10:55 am Congratulations! You purchased a tremendously undervalued asset.

https://twitter.com/uselinkinv/status/1 ... tvNYQ&s=19

We’ll see, Mr M.

Looks like I’ll have a chance to do some more serious buying, perhaps at 1800.

p.s. I’m sure there’s a perfectly good reason for it, perhaps just the speed at which things can change, but CNBC’s headlines about gold are always the direct opposite of what their numbers show and it’s effing annoying.

Cash seems to be the only place to sort of hide right now. I know TLT has come back a little bit off recent lows, but damn, I can totally related to Budd's whining about gold. Throwing the baby out with the bath water so often it seems.

Desert wrote: ↑Thu May 12, 2022 2:43 pm But in all seriousness, it looks like Gold is mostly tracking inversely to a strong dollar. The "market" has decided that inflation is headed down to ~3%. Not that Gold is strongly correlated with inflation anyway.

In my investment view, gold has performed great twice in my lifetime:
1. When gold was unpegged from the dollar
2. When gold ETF's were introduced

It'll be interesting to see what drives the next run.

Seems to be moving slowly but surely up. Not sure at what CAGR though. A troy ounce of a metal with little industrial value cost about $1900. It's been swinging a little lately but I view it as a very slow super tanker.

I’ve seen positive posts about gold on Bogleheads lately. You know things are bad when that happens.

dualstow wrote: ↑Thu May 12, 2022 9:28 pm I’ve seen positive posts about gold on Bogleheads lately. You know things are bad when that happens.

Lol. Truth.

Still, nominally flat is good right now.

(Of course, not what I’d hoped it would do)

Desert wrote: ↑Thu May 12, 2022 2:43 pm But in all seriousness, it looks like Gold is mostly tracking inversely to a strong dollar. The "market" has decided that inflation is headed down to ~3%. Not that Gold is strongly correlated with inflation anyway.

In my investment view, gold has performed great twice in my lifetime:
1. When gold was unpegged from the dollar
2. When gold ETF's were introduced

It'll be interesting to see what drives the next run.

Desert, can you expand on point #2? What was it about the introduction of gold ETFs that you feel drove the price of gold up? Is it just that it became so much easier to own? I believe Medium Tex attributed the run-up in the 2000s to expected inflation that never really materialized. And I believe mathjak would say that gold did well in the 2000s because stocks were negative for the decade, in other words, because the favored asset of most investors did poorly for such a long time.

The performance of gold recently has certainly been disappointing but I keep thinking that most investors are banking on the Fed being able to control inflation with their policy of raising rates... and that investors as a whole have become so forward looking that they refuse to bid down the price of certain assets (specifically bonds at the moment) because they believe they are fairly priced for the longer term. What I mean is that they haven't given up on bonds and are not yet seriously looking for an alternative place to put their bond money.

Reminder…per HB, when the dollar does well gold will not. Gold is the risk off asset when the dollar is tanking.

Cash is king right now.

Kbg wrote: ↑Fri May 13, 2022 8:21 am Reminder…per HB, when the dollar does well gold will not. Gold is the risk off asset when the dollar is tanking.

Cash is king right now.

Good reminder!

Desert wrote: ↑Fri May 13, 2022 4:36 pm It's of course not possible to attribute gold's rise in the 2000's with 100 percent certainty to the availability of ETFs for the first time. But there are reasons to believe that the ease of investing in gold electronically with no thought to transport, storage, etc. had something to do with the dramatic rise after the introduction of GLD in 2004.
...
I don't say all this to disparage holding gold, I just think it's not obviously correct that gold is going to soar when the other three PP assets do poorly. We all experienced the four assets rising in unison, and now we're seeing them fall in unison. In other words, gold is generally uncorrelated with stocks and bonds, but it's not negatively correlated, and can't be counted on to save our portfolios when the other assets are in decline. Sometimes it will, and sometimes it will not. Still, an uncorrelated asset can improve risk-adjusted returns, so can be worth holding despite it's apparent randomness.

Interesting. This dynamic makes me wonder if Gold will lose its historical un-correlation from the stock market, now that it is not as niche a product for retail investors.

For one thing, I know there is zero chance my wife would have entertained the suggestion to hold 10%-20% of our portfolio in physical gold coins at a local bank safety deposit box.

IMO gold has definitely become a trading piece because of ETFs. A lot of hot money flows in and out of it. I used to crab that the hot money would screw up gold.

And maybe it has.

I don't know about ETFs causing trouble.

I still think it is more that the population doesn't even think about owning gold.

What was it like to buy gold in the 70s? Were there gold dealers everywhere or was it just a niche thing?

What are people buying now to hedge inflation? I guess what I have seen is cars and houses maybe? It doesn't appear to me that many people are thinking about gold.

whatchamacallit wrote: ↑Mon May 16, 2022 9:57 pm
I don't know about ETFs causing trouble.

I still think it is more that the population doesn't even think about owning gold.

What was it like to buy gold in the 70s? Were there gold dealers everywhere or was it just a niche thing?

What are people buying now to hedge inflation? I guess what I have seen is cars and houses maybe? It doesn't appear to me that many people are thinking about gold.

How is buying a car hedging inflation? I could see buying one sooner than later if one IS going to be buying a car. Otherwise have we reached a point wherein buying a car could be viewed as an investment?

whatchamacallit wrote: ↑Mon May 16, 2022 9:57 pm What are people buying now to hedge inflation? I guess what I have seen is cars and houses maybe? It doesn't appear to me that many people are thinking about gold.

Me personally: tractors, implements, log splitters -- productive tools. I've been pulling forward purchases when I can for items that will provide utility now and in the future.

HB said gold would move during inflation. If we take his word at face value, we can conclude we've only had mild inflation these past 2 years despite what the CPI and other figures indicate.

perfect_simulation wrote: ↑Wed May 18, 2022 9:30 am HB said gold would move during inflation. If we take his word at face value, we can conclude we've only had mild inflation these past 2 years despite what the CPI and other figures indicate.

Yup.
From Fail-Safe:

Harry Browne wrote: Once U.S. inflation becomes more than a minor irritant (that is, once inflation reaches 6% or so), gold usually starts moving upward—and when the inflation rate gets into double digits, gold's rise accelerates.

To me gold is more insurance against financial calamity and less an inflation hedge.

I like the last post about small amounts of inflation being an "annoyance". We live in a highly manipulated market where everything remains controlled and stable, the Fed appears to have the steering wheel. We may have bigger troubles ahead when world governments have to take on and pay back debt at higher interest rates and we start to see defaults.

Some predict there would be a "dollar crisis" and look out below for the value of both cash and bonds should that happen. Along those lines the purchasing power of the dollar may drop substantially or erode over time (like it has) and the gold price may appear the same (or even go down) but you remain protected by owing it and not being in dollars . This is the illusion of stability from the Fed, it's a dirty game.

Mike59 wrote: ↑Wed May 18, 2022 8:34 pm To me gold is more insurance against financial calamity and less an inflation hedge.

I like the last post about small amounts of inflation being an "annoyance". We live in a highly manipulated market where everything remains controlled and stable, the Fed appears to have the steering wheel. We may have bigger troubles ahead when world governments have to take on and pay back debt at higher interest rates and we start to see defaults.

Some predict there would be a "dollar crisis" and look out below for the value of both cash and bonds should that happen. Along those lines the purchasing power of the dollar may drop substantially or erode over time (like it has) and the gold price may appear the same (or even go down) but you remain protected by owing it and not being in dollars . This is the illusion of stability from the Fed, it's a dirty game.

Me too.

I concur with Desert. Heck of a job, Dually!

I’ll see you both later at my tar and feathering

I believe gold has a CAGR of around 7.5% over the last 5 years. So it seems to be working reasonably well.