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View Poll Results: Where will the price of gold by in 5 years?
Over the next 5 years gold will out perform the SP500 by 10% or more 18 32.14%
Over the next 5 years gold will be with plus or minus 10% of the SP500 16 28.57%
Over the next 5 years gold will under perform the SP500 by 10% or more 22 39.29%
Voters: 56. You may not vote on this poll

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Re: Gold
Old 04-07-2006, 11:15 AM   #21
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Re: Gold

Quote:
Originally Posted by Maximillion
prices are NOT going up, the value of the Paper Currency is going down, there has been far too much printed.
Yes, very true. Most people do not understand it in that context.
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Re: Gold
Old 04-07-2006, 11:22 AM   #22
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Re: Gold

Investing thru the 70's - if you didn't understand it - you were taught - by Mr Market.

heh heh heh heh
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Re: Gold
Old 04-07-2006, 11:24 AM   #23
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Re: Gold

Damn it, I thought we were talking about Acapulco Gold...
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Re: Gold
Old 04-07-2006, 11:39 AM   #24
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Re: Gold

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Originally Posted by REWahoo!
Focu$ed,

That said, I can't help noting that if you change the two phrases I highlighted in bold in your quote above to "tech stocks", you will have rolled back the clock to 1999.* But since you are convinced it's different this time, I wish you only the best in your pursuit of wealth in the commodities and metals markets.

I hope it does not sound like I am "arguing with you" because I respect your view, and your concerns. I enjoy a lively debate as long as it doesn't degenerate into name calling, and we are not doing that.

I am not saying it is different this time. The tech boom was legitimate, too. At least some of it was. There were many stocks that produced goods and services that were in demand, even revolutionary, and they deserved to go up. A Lot. And they did. Unfortunately, there were a lot of stocks that had no worthwhile business plan and were valued based on "eyeballs" - how many people visited their sites. Stocks were brought out too soon as IPOs. Stocks ran way ahead of fair valuations, and I agree that sometimes it is hard to know what "fair" is, but PE multiples in the hundreds for companies with no current or even near-term foreseeable earnings, and no real assets, was a bit silly.

I also agree with you that eventually there will be wild enthusiasm over gold stocks which will be both good and bad. The gold and silver share market is extremely small. The entire market cap of every listed stock has been compared to one major blue-chip company. So, even a small demand can generate very large gains. Many of these stocks have been so beat up over the last couple decades, and so many companies have gone out of business altogether, that it should be expected they would make large gains now to get back anywhere near previous valuations. The metals markets and commodities in general are real tangible assets, whereas many of the dot.com companies offered little of any real value. There are fundamentals, supply and demand factors, that are responsible for my conviction that the bull market is justified. Yes, in time the market will run ahead of itself, as happens in all bull markets, but I don't believe most people would hope that there are never any more bull markets because of that tendency, so I see no reason to hope that this bull market does not evolve.
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Re: Gold
Old 04-07-2006, 11:51 AM   #25
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Re: Gold

I believe in the Austrian School of Economicas. I believe in Mises, Hayek and Murray N. Rothbard. I believe that the dolar is fiat money, and as the money supply goes up(to cover pork and wars), the green paper will become more and more liek toilet paper. That is why I bought Gold when it was bellow $400.
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Re: Gold
Old 04-07-2006, 11:58 AM   #26
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Re: Gold

Quote:
Originally Posted by REWahoo!
Focu$ed,

I both admire and fear for anyone with "unshakable faith" and who has "put...money where my convictions are...".* No doubt you have done well and you should be congratulated for being in the right place at the right time.

That said, I can't help noting that if you change the two phrases I highlighted in bold in your quote above to "tech stocks", you will have rolled back the clock to 1999.* But since you are convinced it's different this time, I wish you only the best in your pursuit of wealth in the commodities and metals markets.

FWIW, Ithink "unshakeable faith" is a great help to a diligent investor. Many times I have not had sufficient conviction in what my research was telling me and I have regretted it. My biggest gains have come from doing the work, knowing I was right, and holding on through thick and thin.

Still working on that sell discipline.
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Re: Gold
Old 04-07-2006, 12:00 PM   #27
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Re: Gold

seems to me the last time there was this much excitement about gold was around 1980 ... just before it peaked ... and few were much interested when it was below 300 nearly 20 years later
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Re: Gold
Old 04-07-2006, 12:21 PM   #28
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Re: Gold

Quote:
Originally Posted by Focu$ed
I enjoy a lively debate as long as it doesn't degenerate into name calling, and we are not doing that.
I'm in total agreement. My issue is that many of us here (not all, for sure) are from the asset allocation school of investing and you appear to be chasing the hottest trend and taking on more risk that I would be comfortable with. I didn't get here (to FIRE) by putting most of my eggs in one basket and I fully admit I've sold too early on several investments. But I saw several co-workers take a huge hit in the dot-com bust and I'm very sensitised to situations that appear to mirror that sad time.

Everyone's risk tolerance is different, mine is obviously much lower than yours. That's not an argument, just a recognition that you and I don't have the same approach to investing. You have some strong convictions, but some of us don't share your faith that there is substanital further growth in gold and commodities. There could be, but seeing where they came from....?

I was sincere in my earlier post when I wished you good luck, and I also happen to think you (and all of us, for that matter) will need it.


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Re: Gold
Old 04-07-2006, 12:24 PM   #29
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Re: Gold

Somebody mentioned a "sage fundamental analysis" of gold. * *Could I get a pointer to that?

My naive understanding of the metal is that the price fluctuation is mostly a function of inflation and the dollar's exchange rate.

If we look at inflation over the last two years, it has been around 3-5%.

If we look at the dollar over the last two years, it is virtually unchanged against the Euro.

If we look at gold over the last two years, it has almost doubled.

What's wrong with this picture?
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Re: Gold
Old 04-07-2006, 12:32 PM   #30
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Re: Gold

Thing is, gold USED to mean something in the greater context of investing. But while that time passed, the psychological implications of what used to be didnt go quietly.

I owned some precious metals (in fairly small amounts), simply because in certain economic conditions and as a reaction to some specific fears, people will buy them and run the price up. And vice versa.

When it doubled in a year, I sold, took my cash, and I'll wait until the rest of the neo internet stock buying types and the bugs walk back out. Then I might buy my 3% stake back in.

A lot of people got rich by selling too soon.
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Re: Gold
Old 04-07-2006, 12:40 PM   #31
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Re: Gold

$600 gold: Want in? Think twice

By Rob Kelley, CNNMoney.com staff writer

As gold futures surged past the $600 an ounce barrier Thursday, it was easy for investors to forget that in 1999 gold was stuck around an anemic $250 an ounce.

...and fasten your seat belt...

Few investment vehicles have seen as much shakeup over the past 25 years as gold. In 1980, it touched $873 an ounce after rampant inflation engulfed the nation, but then plunged to a low of $254.80 in August 1999.

And these huge long-term swings are now being complemented by larger day-to-day shifts.

"We're seeing price swings that we haven't seen in decades. We used to see a $6 range in gold over a week, and now we see it in a single day," said Quinn. "The gold market is really going to be in play over the course of the year."

For investors, that means that they should be prepared for the possibility of major short-term losses.

"Not everybody could handle losing 40 percent in one year," said Wallace. "Most people probably don't need an investment in precious metal funds."

http://money.cnn.com/2006/04/06/pf/g...ting/index.htm
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Re: Gold
Old 04-07-2006, 12:49 PM   #32
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Re: Gold

hmm. the poll results are almost split 1/3 for each....maybe that says something
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Re: Gold
Old 04-07-2006, 02:39 PM   #33
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Re: Gold

Quote:
Originally Posted by d
seems to me the last time there was this much excitement about gold was around 1980 ... just before it peaked ... and few were much interested when it was below 300 nearly 20 years later
Are you old enough to know this first hand? Because the difference is immense. I remember sitting in a coffee house that fronts on an alley a block south of the U. Bookstore in Seattle. Not the place for speculators. But I heard 2 separate conversations about getting into gold. The same week there was an article in the Seattle Times featuring some genius businessman who had sold his small chain of restaurants and plowed it all into gold.

I agree with people who say that gold is irrational and hard to value in a businesslike way. But if you are speculating, know that today's "excitement" isnít much compared to recent history.

Ha
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Re: Gold
Old 04-07-2006, 03:09 PM   #34
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Re: Gold

HaHa

yes, I'm old enough to remember this first hand.* At the previous 600 level (and just prior) I decided not to join the herd, and in the late 90's (thru early 00's) decided not to bet at the bottom. (I distincly recall discussing with a colleauge the persistent sub $300 price, and suspecting it could be a good move.)

not that I'm necessarily consistent, but I'll not likely join the frenzy at this time either.* It is one thing to bet on "productive assets", another to simply bet.

The history of gold certainly suggests that one can make $ ... and also that one can lose it.* Alternatively, consider the 26 year investement with an average annual return of 0%. I'm not playin'.
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Re: Gold
Old 04-07-2006, 03:10 PM   #35
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Re: Gold

You're gonna love the premiums.

Ha
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Re: Gold
Old 04-07-2006, 03:49 PM   #36
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Re: Gold

Quote:
Originally Posted by Maddy the Turbo Beagle
hmm. the poll results are almost split 1/3 for each....maybe that says something
I noticed this to Maddy. Perhaps not to surprising if you think about!

In the last couple of years I have increased my exposure to RE and natural resources but I haven't specifically invested in precious metals. Have thought about it more recently but I suspect that I'll probably continue to sit on the sidelines.

MB
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Re: Gold
Old 04-07-2006, 05:40 PM   #37
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Re: Gold

Quote:
Originally Posted by wab
Somebody mentioned a "sage fundamental analysis" of gold. * *Could I get a pointer to that?

My naive understanding of the metal is that the price fluctuation is mostly a function of inflation and the dollar's exchange rate.

If we look at inflation over the last two years, it has been around 3-5%.

If we look at the dollar over the last two years, it is virtually unchanged against the Euro.

If we look at gold over the last two years, it has almost doubled.

What's wrong with this picture?
Hehehe. That's the inside joke that none of the gold bugs get. Gold has been a lousy hedge against inflation ever since we went off the gold standard. Does anyone really think they are buying an inflation hedge or a dollar hedge at $600 / ounce when the dollar has neither dropped by 200%, nor inflation run 200% over the last 3 years? Is there any reason to believe gold can't fall by half from current levels regardless of what the dollar or inflation does?
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Re: Gold
Old 04-07-2006, 06:42 PM   #38
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Re: Gold

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Originally Posted by 3 Yrs to Go
Hehehe.* That's the inside joke that none of the gold bugs get.* Gold has been a lousy hedge against inflation ever since we went off the gold standard.*
Statistics show that the purchasing power of the dollar is now 5 cents, compared to what a dollar would buy when we went off the gold standard. The price of gold has gone from $20 just prior to 1933, to $590 now. At the current price, then, gold has substantially outpaced inflation. If it had only kept pace with inflation gold would be $400.
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Re: Gold
Old 04-07-2006, 07:04 PM   #39
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Re: Gold

dont forget since the 70's inflation has been in a long term decline ..commodities as a whole declined right up to a few years ago taking off again over the last few years...we never really got a chance to see what gold could do when confronted with inflation as its been tame....and anyone who doubts gold kept up with inflation remember,in the 1800's 1 ounce of gold bout a mans suit and maybe a pair of cheap shoes....guess what the same ounce buys today? a mans suite and maybe a pair of cheap shoes
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Re: Gold
Old 04-07-2006, 07:10 PM   #40
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Re: Gold

Quote:
Originally Posted by mathjak107
dont forget since the 70's inflation has been in a long term decline ..commodities as a whole declined right up to a few years ago taking off again over the last few years...we never really got a chance to see what gold could do when confronted with inflation as its been tame....and anyone who doubts gold kept up with inflation remember,in the 1800's 1 ounce of gold bout a mans suit and maybe a pair of cheap shoes....guess what the same ounce buys today? a mans suite and maybe a pair of cheap shoes
Perhaps. But how happy would you have been if you bought it in 1980, the last time it traded at $600? How good of a hedge has it been over the last 25 years? How good of a hedge will it be over the next 25?
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