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Hard Assets
Old 03-09-2015, 07:53 PM   #1
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Hard Assets

Wikipedia and Investopedia are far apart on their definition of "Hard Assets".
The recent Alan Greenspan comments on the future of the dollar brings into context the suggestion that the safest means of maintaining personal and business safety in the face of inflation, is the investment in "Hard Assets".

If, indeed, this might be a position that you would take, what kind of hard assets would you consider?
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Old 03-09-2015, 08:16 PM   #2
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Real Estate with rental income would seem the logical choice, preferably highly leveraged.
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Old 03-09-2015, 08:32 PM   #3
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I will put down my thought before going and looking...

A 'hard asset' is just that... something that you can touch and feel... securities are not hard... a pension is not hard... gold and real estate are hard...

Now let's see how close I got...


OK... looked and I am not far off!!!

I do not see that the definitions that the OP mentioned are that far off... one had a ref to hard assets in a company the is different than 'soft' such as goodwill...
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Old 03-09-2015, 09:52 PM   #4
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Quote:
Originally Posted by imoldernu View Post
Wikipedia and Investopedia are far apart on their definition of "Hard Assets".
The recent Alan Greenspan comments on the future of the dollar brings into context the suggestion that the safest means of maintaining personal and business safety in the face of inflation, is the investment in "Hard Assets".

If, indeed, this might be a position that you would take, what kind of hard assets would you consider?
Do you happen to have a link to Greenspan's ideas? Is this hard assets idea his, or something you dug up elsewhere?

Ha
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Old 03-09-2015, 10:54 PM   #5
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Quote:
Originally Posted by haha View Post
Do you happen to have a link to Greenspan's ideas? Is this hard assets idea his, or something you dug up elsewhere?

Ha
Doing a simple search , plenty of stuff from retail gold marketers with tag lines to A.G. come up , none worth looking at .

I did find this recent A.G. interview about stock valuation on CNBC imbeded in a zerohedge article . Nothing about hard assets, but the first time I can remember A.G. where an average person can clearly understand !

http://www.zerohedge.com/news/2015-0...ely-overvalued

Direct link to the youtube video

EDIT , I'm going a little off topic, but in the video , AG speaks of 0 productivity growth. We have already automated and off-shored everything the experts can think up , beating the horses as hard as can be done.
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Old 03-09-2015, 11:22 PM   #6
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Stuff that does not go down in value, unlike electronics, and has an intrinsic value.

Examples are farmland, Wine and booze collections, guns & ammo.

Hmmmmm..... seems I have a prepper viewpoint right now, so I'll counter it with a non-prepper example: fine art (Picasso, Monet, etc).
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Old 03-10-2015, 06:55 AM   #7
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Below is a link from CNBC identifying how various Hard Assets performed over the last 10 years:

Classic cars were the best collectible investment in 2014
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Old 03-10-2015, 07:34 AM   #8
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Originally Posted by Lakewood90712 View Post
EDIT , I'm going a little off topic, but in the video , AG speaks of 0 productivity growth. We have already automated and off-shored everything the experts can think up , beating the horses as hard as can be done.
I read the CNBC tag line, and I was thinking - why is AG complaining about productivity? The US has been outrageously productive since 2008. Another reason the employment rates took so long to come down.
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Old 03-10-2015, 08:03 AM   #9
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For my hard assets sliver of my portfolio (about 2%), I invest in BID and CLCT and receive a quarterly dividend. Tax treatment for precious metals and trying to store cars/art and maintain farmland is too much of an effort. Plus the easiest thing to tax is physical assets. As long as I can maintain 15% QDI, I will ride that horse.


BID: Sotheby’s is a global art business company.


CLCT: Collectors Universe, Inc, is an authentication and grading services company.
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Old 03-10-2015, 08:54 AM   #10
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My most valuable hard asset is probably my office condominium that I lease out to the doc who purchased my practice. The lease and the noncompete agreement both expire on the same day in May of 2017. I would rather not go back to work but it is good to know that I have that option.
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Old 03-10-2015, 09:26 AM   #11
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Quote:
Originally Posted by imoldernu View Post
Wikipedia and Investopedia are far apart on their definition of "Hard Assets".
The recent Alan Greenspan comments on the future of the dollar brings into context the suggestion that the safest means of maintaining personal and business safety in the face of inflation, is the investment in "Hard Assets".

If, indeed, this might be a position that you would take, what kind of hard assets would you consider?
There are liquid hard assets as well as illiquid ones. Liquidity issues have changed quite a bit. You can purchase a gold ETF for example, instead of storing gold bullion in your back yard.

Real Estate Investment Trusts (REIT) are probably heard about just as much as gold. You invest in the company which owns and manages commercial real estate holdings. With a REIT, you receive income. With GLD it just sits there and waits for speculation.

Our portfolio holds 5% REIT fund (Vanguard VGSLX). We also consider our home a hard asset. I do not include it in asset allocation, but know some day I may hold a check in hand which amounts to a large addition to our portfolio, and would need to invest accordingly.

There are many other examples of hard assets. For example, timber companies may own forests, and they have a long-term investment in their forests. They also make and sell products.

You could invest in a materials sector fund or ETF which looks something like the following:
Chemicals 75.14%
Metals & Mining 11.36%
Containers & Packaging 6.19%
Paper & Forest Products 3.93%
Construction Materials 3.38%

That takes you one step away from a hard asset, but you are investing in companies which produce hard assets used by others. Chemical companies and construction materials come to mind.

Materials ETF List
Top 10 Materials ETFs
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Old 03-10-2015, 09:33 AM   #12
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real asset versus financial asset - pretty basic concept


an example would be silver/gold/platinum coins or bullion, land, buildings, cars, cattle, food, coal, oil.


Basically if you can eat it, hold it or burn it, it's a real asset.


Personally, I think having a stash of gold or silver coins is a good idea. That way you can buy food with the fit hits the shan. When the market tanked 15 years ago I loaded up on some gold and silver eagles.
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Old 03-10-2015, 09:43 AM   #13
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Ok. I'll admit it. I thought this thread was going to be about a firm gluteus maximus.

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Old 03-10-2015, 10:11 AM   #14
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We are simple folks and tend to think we own something when we don't owe anyone for it. We also have a problem the whole stock idea - we sure aren't going to be allowed to take 2 IT person's brains from Microsoft as our cut if the company goes belly up. All feels very "things have value as people agree that they do, when they don't your fortune in Cabbage Patch Kids and Pet Rocks evaporates".

That said, we stuck time and money into rental property and paid the high interest, high incentive loans off ASAP. When the property values crashed we, unleveraged, were in good shape. When stocks crashed we, uninvested, were in good shape. Only issues are that we have rental property: that means tenants and illiquidity and big fat tax bills if we sell as they are all heading toward fully depreciated. We also have a problem being able to tailor our income up or down as desired.

We've been putting our money into loans secured by property for a number of years now - while we don't own the physical property directly we can own it if we don't get paid. Not the same as owning the hard asset directly, but it seems closer to that than owning a stock or fund. Gets us away from tenants but doesn't allow us to tailor income and is highly taxed.

The gold Philharmonics and old clanker guns; the '56 Chevy wagon PITA money pit, the old chewed up Caucasian carpets and Navajo rugs all have some value, but I don't consider them - not really a profit thing.
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Old 03-10-2015, 10:14 AM   #15
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^ that a 56 nomad?
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Old 03-10-2015, 10:27 AM   #16
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Nah. Her family 210 wagon since the early 60s. Stupid amounts of cash have gone into it over the last ten years and the rebuilt LT1 from the donor cop car Caprice hasn't even been fired. Interior isn't installed either. Sure takes up a bunch of floor space though, when we aren't paying to have it having extended stays at car builders.
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Old 03-10-2015, 12:26 PM   #17
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Hard assets are men's pride.
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Old 03-10-2015, 06:46 PM   #18
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If we're looking for "hard" assets, I'd go with diamonds.



(yeah, I've read about some other possibilities, but I don't know of anything that's nearly as big as a diamond)
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Old 03-10-2015, 06:57 PM   #19
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Predictions are hard, especially about the future.

Quote:
Former Fed Chairman Alan Greenspan predicts in a new book out Monday that the Fed will have to raise interest rates to double-digit levels in coming years to thwart inflation.

Greenspan, 81, says in The Age of Turbulence that the inflation-damping effect of globalization, which has led to lower wage pressures, inflation and interest rates worldwide, will recede.

At some point, the flow of people into the workforce in developing countries such as China, which has seen a movement of workers from farms into factories, will slow, leading to stronger wage pressures and prices, he says. The impact will be global.

And the shift "may be upon us sooner rather than later," he says. Evidence: Prices of Chinese imports coming into the USA started rising earlier this year. That suggests that in the "next few years, " inflation will build unless action is taken.
The book was released in Sept, 2008.
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Old 03-11-2015, 04:06 AM   #20
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Diamonds hummmm! They and furs are the best way to p_ss away your hard earn money that I know of. Bet some others on the forum have a few other items that could be put on this list. Keep in mind that there are "items" you can invest in that overall are NOT GOOD INVESTMENTS BUT remember the famous saying from Mr W C Fields b" Theres as sucker born every minute".


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