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Gold Paper
Old 01-16-2021, 12:21 PM   #1
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Gold Paper

All,

Iím back with another paper. This one is on gold investing. It discusses the factors investors ought to consider when investing in gold. I hope some of you find it helpful.

Rick

https://www.dropbox.com/s/otqz4j8wg2...Paper.pdf?dl=0
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Old 01-16-2021, 12:47 PM   #2
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Very nice.
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Old 01-17-2021, 01:30 AM   #3
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Originally Posted by AtlasShrugged View Post
All,

Iím back with another paper. This one is on gold investing. It discusses the factors investors ought to consider when investing in gold. I hope some of you find it helpful.

Rick

https://www.dropbox.com/s/otqz4j8wg2...Paper.pdf?dl=0
Very nice to see a rational look at gold as contrasted to late night infomercials explaining why their over-hyped gold products are the bees knees.

Your conclusion that "the decision to invest in gold isn't easy" can be read two ways:

1) A decision to invest in gold necessitates over-looking the many negatives you outlined while only focusing on the weak positives.

2) The positives and negatives are relatively balanced so the decision is difficult.

I took it to mean #1 but I'm only 95% sure that's what you meant.
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Old 01-17-2021, 04:07 AM   #4
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Originally Posted by RetiredAtThirty-eight View Post
Very nice to see a rational look at gold as contrasted to late night infomercials explaining why their over-hyped gold products are the bees knees.

Your conclusion that "the decision to invest in gold isn't easy" can be read two ways:

1) A decision to invest in gold necessitates over-looking the many negatives you outlined while only focusing on the weak positives.

2) The positives and negatives are relatively balanced so the decision is difficult.

I took it to mean #1 but I'm only 95% sure that's what you meant.
Great question. I meant #1 with an additional problem. There are times when gold may be appropriate, but you must overlook the negatives and you must be good at knowing when to get in and out. Both of those aren't easy.
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Old 01-18-2021, 07:58 AM   #5
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Check out Coro. They are trying to make gold spendable using Fintec. Ive been struggling with gold for all the reasons in the paper but now taking a look at it knowing that it could be the ultimate crypto currency with the correct technology model.
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Old 01-19-2021, 01:46 AM   #6
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Thanks for another fine paper.

As one who holds a bit of PMs - "just because" I'm one who believes virtually every word of your paper and still owns some PMs "just because." During the unpleasantness of 2008, etc. my portfolio stayed more or less even due to PMs. I think of PMs a bit like buying insurance, perhaps.

In any case, my only quibbles are in the last two paragraphs on P. 13. The word "hiccup" implies a brief interruption of the "march forward of humanity" (sorry, my words!) If you lived in middle Europe from about 1910 to about 1950, the word hiccup to describe why gold might be "useful" would probably bring scowls. Bushel baskets of paper currency and political upheaval come to mind but I won't bore with details.

My biggest quibble is perhaps because I've been sensitized to it Suggesting that gold's "other" fear component is for a "post apocalyptic" world suggests two world scenarios: 1) Everything is fine (like, well, now) or TSHTF - like an asteroid. I submit that there are many "in-betweens" when having a handful of gold might (returning to 1930 for a moment) buy your way out hell, even though most folks were still more-or-less on Earth. Given a little time, I'm guessing most of us could come up with some other "in betweens."

Oh, one more thing I don't recall seeing in the paper the fact that gold has a 5000 year (really more) history as "money." That means everyone knows and accepts that gold is "money." They may try to outlaw it, confiscate it, deny it, but everyone knows that gold is money. I can't think of anything else with that track record.

Great paper, as usual!!
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Old 01-19-2021, 05:47 AM   #7
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Originally Posted by Koolau View Post
Thanks for another fine paper.

As one who holds a bit of PMs - "just because" I'm one who believes virtually every word of your paper and still owns some PMs "just because." During the unpleasantness of 2008, etc. my portfolio stayed more or less even due to PMs. I think of PMs a bit like buying insurance, perhaps.

In any case, my only quibbles are in the last two paragraphs on P. 13. The word "hiccup" implies a brief interruption of the "march forward of humanity" (sorry, my words!) If you lived in middle Europe from about 1910 to about 1950, the word hiccup to describe why gold might be "useful" would probably bring scowls. Bushel baskets of paper currency and political upheaval come to mind but I won't bore with details.

My biggest quibble is perhaps because I've been sensitized to it Suggesting that gold's "other" fear component is for a "post apocalyptic" world suggests two world scenarios: 1) Everything is fine (like, well, now) or TSHTF - like an asteroid. I submit that there are many "in-betweens" when having a handful of gold might (returning to 1930 for a moment) buy your way out hell, even though most folks were still more-or-less on Earth. Given a little time, I'm guessing most of us could come up with some other "in betweens."

Oh, one more thing I don't recall seeing in the paper the fact that gold has a 5000 year (really more) history as "money." That means everyone knows and accepts that gold is "money." They may try to outlaw it, confiscate it, deny it, but everyone knows that gold is money. I can't think of anything else with that track record.

Great paper, as usual!!
Koolau,

Thanks for your comments. As an author of these papers, I appreciate the feedback.

What makes investing so interesting, and writing these papers so challenging, is how differently people look at the same set of facts. In this case, you believe that gold has value if TSHTF. I shared this paper with my brother-in-law and he dismissed TSHTF scenario as reason to buy gold. I suspect you both arrived at reasonable conclusions for yourselves.

Perhaps I should have defined "hiccup." In my mind, 40 bad years in Europe is a hiccup over a 5,000 year span of time. To others, 1 month is a hiccup. Regardless of which end of the spectrum you're on, it's hard to time gold purchase because you don't know if the hiccup is going to last 1 month or 40 years.

Thanks again.
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Old 01-22-2021, 09:45 PM   #8
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Koolau,

Thanks for your comments. As an author of these papers, I appreciate the feedback.

What makes investing so interesting, and writing these papers so challenging, is how differently people look at the same set of facts. In this case, you believe that gold has value if TSHTF. I shared this paper with my brother-in-law and he dismissed TSHTF scenario as reason to buy gold. I suspect you both arrived at reasonable conclusions for yourselves.

Perhaps I should have defined "hiccup." In my mind, 40 bad years in Europe is a hiccup over a 5,000 year span of time. To others, 1 month is a hiccup. Regardless of which end of the spectrum you're on, it's hard to time gold purchase because you don't know if the hiccup is going to last 1 month or 40 years.

Thanks again.
I would much rather have real things: food, supplies, seeds, fuel, ammo, and so on for a TSHTF scenario. Unfortunately, there is a limit to how much of that one can reasonably have. I have a food supply, I have a seed supply. I have land. So what comes next? This is the reason I also own PM's. This would especially be true for gold/platinum/palladium (as compared to silver) in that a significant amount of wealth can be represented by a small amount (size and weight) of metal.

Honestly, I hope the $ I have in PM's never turns out to be more than a poor investment. Because if it does become a "fantastic" investment, it means (most likely) a bunch of really bad things have happened. One more thing (at least from my perspective): Part of my strategy here is based on having won and having enough. I have "enough wealth" that having a bit put on the side won't change my lifestyle, and if I am wasting that part on a hedge - oh well. In the meantime, most of my wealth is invested such that a peaceful and prosperous world should lead to good returns.
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Old 01-23-2021, 07:30 PM   #9
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Is gold an investment or savings?

I think if you look at it as an investment, you will be disappointed.
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Old 01-24-2021, 04:59 PM   #10
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Thank you. I've never held gold, but hadn't really thought through the issues, good and bad. Your paper does a nice job, bringing up a lot of things I hadn't thought about. It's alway fun to learn.
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Old 01-31-2021, 12:57 PM   #11
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Just a FYI. Over the last couple days I've noticed the premium for physical silver over spot increasing (nothing scientific here, I look at sites like: https://findbullionprices.com/closest-to-spot/. I do this every/every couple/every few/every whatever days looking for potential bargains (relative to spot).

Anyway, today I see that many sites: SD Buillion, BGASC, APMEX, ... have banners today saying they aren't accepting silver coin/bullion/etc orders until the market opens tonight due to increased demand.

Now I see a report that the CEO of SD Bullion said they saw 10X the normal weekend demand just on Friday for Silver, and also that normally they would be able to get additional supply but this weekend they've been unable to.

It appears the GME fiasco is perhaps teaching folks that "taking delivery" is better than a paper promise to pay.

I have some silver rounds ordered a couple of weeks ago, that for some idiotic reason I decided to pay via check (vs wire). The check has been cashed, but still in the waiting period for official clearing. Fortunately this is from a direct manufacturer, so I am fairly confident on delivery regardless of what happens in the coming weeks.
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Old 02-01-2021, 10:57 AM   #12
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Silver

I hold silver via PSLV and am attributing it's current price spike primarily to the Reddit crowd (just my gut, no insider knowledge). So, I am probably going to put in some sell orders and take the capitol gains hit to get some of those chips off the table, at least for a while.

Note: I added silver to my precious metals holdings when its price was significantly under-performing gold. That no longer seems to be the case.

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Originally Posted by copyright1997reloaded View Post
Just a FYI. Over the last couple days I've noticed the premium for physical silver over spot increasing (nothing scientific here, I look at sites like: https://findbullionprices.com/closest-to-spot/. I do this every/every couple/every few/every whatever days looking for potential bargains (relative to spot).

Anyway, today I see that many sites: SD Buillion, BGASC, APMEX, ... have banners today saying they aren't accepting silver coin/bullion/etc orders until the market opens tonight due to increased demand.

Now I see a report that the CEO of SD Bullion said they saw 10X the normal weekend demand just on Friday for Silver, and also that normally they would be able to get additional supply but this weekend they've been unable to.

It appears the GME fiasco is perhaps teaching folks that "taking delivery" is better than a paper promise to pay.

I have some silver rounds ordered a couple of weeks ago, that for some idiotic reason I decided to pay via check (vs wire). The check has been cashed, but still in the waiting period for official clearing. Fortunately this is from a direct manufacturer, so I am fairly confident on delivery regardless of what happens in the coming weeks.
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Old 02-02-2021, 12:04 PM   #13
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I hold silver via PSLV and am attributing it's current price spike primarily to the Reddit crowd (just my gut, no insider knowledge). So, I am probably going to put in some sell orders and take the capitol gains hit to get some of those chips off the table, at least for a while.

Note: I added silver to my precious metals holdings when its price was significantly under-performing gold. That no longer seems to be the case.
Looks like this was a great call (at least short term). My basis on PSLV is $5.77 so even with todays drop I am still OK on this one (price is $9.70 as I type this). As of now, this is still a short term holding for me (bought it in the March 20 selloff), so that makes it a bit harder to trade due to tax considerations. (I know, I shouldn't let the tail wag the dog.)
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