Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Yellow Metal Stinks!
Old 08-13-2007, 11:54 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Yellow Metal Stinks!

I rode some gold stock holdings out of the 2002 bottom to some good gains. I have no trust at all in gold, any more than I have in lots of other investments that have anemic cash flows. Still I figured that there would be a chapter 2 and chapter 3, based on the theory that serial bubbles cannot be blown in the old burst balloon, hence a fresh new one will be needed. Gold seemed to be a good candidate for a new bubble.

But this morning's action has me doubting this thesis. European and US central banks inject considerable liquidity, inflation is creeping up in China, we all know what inflation is doing here- yet the price of gold falls as do the stocks.

Not a very strong testimonial.

I would like to get my current gains into 2008, but if things don't at least stabilize I am going to sell way down, taxes or no taxes.

Of course, as soon as my last sale is made gold will jump $100.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-13-2007, 12:17 PM   #2
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by haha View Post
I have no trust at all in gold, any more than I have in lots of other investments that have anemic cash flows. Still I figured that there would be a chapter 2 and chapter 3, based on the theory that serial bubbles cannot be blown in the old burst balloon, hence a fresh new one will be needed. Gold seemed to be a good candidate for new bubble.
Nothing screws up a good investment like the other investors remaining blissfully ignorant that the world is going to hell.

I keep vowing to never underestimate the stupidy, incompetence, and laziness of the other American consumers-- but I just can't seem to set my sights low enough.

I gave up on gold when it stopped being a disaster investment and reverted to a dollar hedge.
__________________

__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Gold as diversifier
Old 08-13-2007, 09:27 PM   #3
Dryer sheet aficionado
 
Join Date: Jul 2007
Posts: 38
Gold as diversifier

Inflation is running much higher than the official numbers report. What will gold do tomorrow, or next year? Nobody knows. But, it is uncorrelated to other more traditional investments and probably has its place, albeit a small one, as a hedge in a diversified portfolio. I have about 1% of my portfolio in AIM Precious Metals and Fidelity Select Gold, I will go to 2-3% if gold drops to below $650/oz.. The former has returned to me about 4% in the six months I have owned it, the latter about 31% in the year I have owned it. I wouldn't buy individual mining companies and don't care for bullion with its hassles and expenses nor coins for other reasons.
__________________
hayekcapitalist is offline   Reply With Quote
Old 08-16-2007, 11:07 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by hayekcapitalist View Post
But, it is uncorrelated to other more traditional investments and probably has its place, albeit a small one, as a hedge in a diversified portfolio.

Well, it is definitely reputed to be uncorrelated to other investments, but over the past year or so this has not been true. And during the pronounced weakness of the past few weeks, if anything gold has been weaker than the S&P.

I think this correlation stuff is overrated-unless the bets are truly uncorrelated- like tax liens in different cities, bets on different football games, etc. These market "correlations" are really just statistical aberrations that come and go. Especially they are likely to go whenever there is stress.

Gold bugs say that gold is real money, not that bad credit dependent stuff we carry around in our wallets. If so, the last few weeks should be the exact time that gold would shine- instead it falls on its face.

IMO, a truly S&P uncorrelated asset might be a Maalox distributorship in lower Manhattan. If you can’t find one of those, cash should work.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 08-16-2007, 11:35 PM   #5
Dryer sheet aficionado
 
Join Date: Aug 2007
Posts: 31
haha, not completely clear as to your expectations of gold are I'd say you're getting frustrated a little too soon in the game. Start reading some Jim Sinclair and make sure to read his history and then, maybe, you'll be a little more motivated. Jim is a wise man and knows what he's talking about, keep your eyes peeled.

It should be expected that gold would drop at the beginning of this type of cycle and if you read the archives at Jim's site you'll get an idea as to why. You're already a little contrarian for investing in gold so don't pull the plug now or you might live long enough to wonder why you sold when the pickings were just getting good.
__________________
teachme is offline   Reply With Quote
Old 08-16-2007, 11:39 PM   #6
Dryer sheet aficionado
 
Join Date: Aug 2007
Posts: 31
Quote:
Originally Posted by hayekcapitalist View Post
Inflation is running much higher than the official numbers report.
Shadowing Reality - Economist Keeps Tabs On Government’s“Creative” Statistical Reports
__________________

__________________
teachme is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
They Call Me Mellow (Yellow) tangomonster Life after FIRE 6 08-01-2007 08:17 PM
The yellow brick road... mangodance Young Dreamers 3 09-22-2006 09:15 PM
metal detectors and treasure hunting maddythebeagle Other topics 30 08-14-2006 03:31 PM
Yellow Jackets hellbender Other topics 49 07-21-2006 06:00 PM
Better wine than Yellow tail - Jaob's Creek dex Other topics 8 01-14-2005 08:06 AM

 

 
All times are GMT -6. The time now is 11:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.