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Old 08-01-2013, 05:57 PM   #701
Fedaykin
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Originally Posted by Arkie View Post
I'm not disputing that. Gold was at a fixed price for most of that time. The Dow and gold have performed about the same since the early 70's when we dropped the fixed price. Gold performed better from 1970-2011. Gold has performed better since 1999 even with the Fed throwing every trick at Wall Street.
Sorry, you're entirely wrong. The DOW has cleaned gold's clock (long term) since 1970. No competition. At times gold outperforms for a while, but over the long haul, the DOW has always done way better.

See my earlier posts in this thread.

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I agree. The Dow has outperformed gold over the past 5 years, but that's only been true over the last 7 months when gold tanked. Gold is cheap again. Also, keep in mind the Fed is running out of tricks. They've set fed rates to 0% four years running, bailed out Wall St, implemented QE1, QE2, and an open-ended QE3.
You seriously need to learn some math and apply it to this situation. The DOW (and other stock markets) have been raping gold on an ROI for a lot longer than 7 months. And it's not that gold is a bad thing to diversify with (I have physical gold myself -- it's about 3-5% of my holdings as well as gold ETFs -- another 5-8%), but as an investment (per the OP), it's been far, far inferior to stocks for pretty much ever.

As an all-in investment it's completely idiotic. (which could be said about pretty much any investment, not ragging on gold there).

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So we both agree on this too. It may not be such a lame prediction though. The buyers are betting we're wrong.
The buyers are betting, and that's fine.

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I agree, but somebody has to be willing to buy high for you to sell at that price (or sell to you at a low price after holding the bag on the way down.) It's only good for half the people at the top and half the people at the bottom. Even fewer people manage to position themselves in both the right half at the top and the bottom.
Even with a meltdown on the scale of 2007/8, we're talking a 50% loss in value, in which case I'm still way ahead of gold. And, I invest only in companies with solid fundamentals, so in the event of a crash

a.) I won't be stuck with worthless TP overnight and
b.) worst case scenario I just have to hold on until things eventually come back. You only lose money (on a stock with a solid company) in a downturn if you sell during the downturn.

Look at Apple. In 2009 they dipped down to $80 from $200. If you had Apple stock in $200/share stock in 2009 and panicked, you would have lost more than half your investment. Had you looked at Apple, and seen that even in 2009 they were operating from a solid foundation, you would have been fine, and now doubled your money instead (or more than tripled if you sold in 2012 instead).

And in actuality, I've already liquidated about 1/3 of my holdings (mostly my higher risk holdings and holdings that are interest rate sensitive), just to hedge against the typical summer slump in the markets and because of the possible QE changes and rising interest rates. Assuming things look good, I'll buy back in fully in OCT. If things start to falter, I'll pull back even more and exit anything resembling high risk.

The people that take the biggest hit are the people that start tossing money at high risk investments near the end of a bull market. Be educated, apply some investment 101 knowledge, and you'll do fine.

It's pretty much investing 101. Don't chase returns (especially in times of uncertainty!), guard against slumps. Losing 50% of an investment means you need to double what you have left to get back to square 1.

Last edited by Fedaykin; 08-01-2013 at 06:03 PM..
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Old 08-01-2013, 06:27 PM   #702
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The DOW has cleaned gold's clock (long term) since 1970.
Gold started at $37 and was $1,920 in 2011. Like I said, even at $1,300 it's outperformed the Dow over the last 15 years.
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Old 08-01-2013, 06:50 PM   #703
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Gold started at $37 and was $1,920 in 2011. Like I said, even at $1,300 it's outperformed the Dow over the last 15 years.
Dude my left nut has outperformed the Dow over the last 15.

He's talking about an investment lifetime here, which is much longer.
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Old 08-01-2013, 06:57 PM   #704
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Old 08-01-2013, 07:08 PM   #705
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Dude my left nut has outperformed the Dow over the last 15.

He's talking about an investment lifetime here, which is much longer.
He said the Dow cleaned gold's clock since 1970. That's not true. In fact, gold performed better 1970-2011.

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Old 08-01-2013, 07:19 PM   #706
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Gold started at $37 and was $1,920 in 2011.
LMAO

$37 was a fixed, legislated price (i.e. the gold standard), not a market price. It only existed at a time when it was illegal for individuals or companies to possess gold in significant quantities.

Sure, if you happened to illegally own a large amount of gold during that transition, you made some serious money (or went to prison). It wasn't legal to own large amounts of physical gold until 1974, after the U.S. exited the gold standard.

In other words, calling $35 the starting market price of gold is silly, bordering on the absurd. The only people that had any serious investment opportunity starting at that price were unlawfully in posession of that gold.

In 1974, after it was legal to actually posses in large (investment) quantities, the price of gold started at $155/oz.

In other words, an ~8x gain is the best you could legally get out of gold (~12x if you sold at peak in 2011). The Dow has gained ~25x in that same time frame.

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Like I said, even at $1,300 it's outperformed the Dow over the last 15 years.
It's cute that you specifically pick the peak of a DOW bubble as your starting point. A few months in either direction and it completely changes the outcome (see: bubble!). I can play that game too! how about we pick 1980-present for a comparison?

We've already been over this multiple times...

Last edited by Fedaykin; 08-01-2013 at 08:03 PM..
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Old 08-01-2013, 07:27 PM   #707
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Hell, even at the depths of the great recession (2009) the DOW was still clocking in @ nearly 12x (7000/600) overall ROI, while gold was clocking in at only 6x (1000/155)
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Old 08-01-2013, 07:30 PM   #708
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And that's only considering GROWTH, not dividends!
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Old 08-01-2013, 07:36 PM   #709
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I will cop to being lazy saying 1970 instead of 1974...
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Old 08-01-2013, 07:52 PM   #710
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another fun comparison:

1900:
Dow: $68
Gold: $20.67

2013:
Dow: 15,600
Gold (peak!): 1920

Overall ROI:

Gold (peak!!!): 1920/20.67 = 93x
Gold (present): 1300/20.67: 63x
Dow: 15600/68 = 229x

The Dow >>>> Gold in the long term. Absolutely no competition. Nada. Zip. Zilch.

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Old 08-01-2013, 08:11 PM   #711
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Originally Posted by Fedaykin View Post
another fun comparison:

1900:
Dow: $68
Gold: $20.67

2013:
Dow: 15,600
Gold (peak!): 1920

Overall ROI:

Gold (peak!!!): 1920/20.67 = 93x
Gold (present): 1300/20.67: 63x
Dow: 15600/68 = 229x

The Dow >>>> Gold in the long term. Absolutely no competition. Nada. Zip. Zilch.
I've already agreed with that several posts ago. Gold was fixed for 2/3rds that time. They are comparable since the 70's, and comparing them to the present will put the Dow in it's best light. It's at an all time high and gold is selling cheap.
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Old 08-01-2013, 08:15 PM   #712
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I've already agreed with that several posts ago. Gold was fixed for 2/3rds that time. They are comparable since the 70's, and comparing them to the present will put the Dow in it's best light. It's at an all time high and gold is selling cheap.
They are only comparable if you POSSESSED GOLD ILLEGALLY UNDER THE GOLD STANDARD.

If you IGNORE CRIMINALS, the dow has spanked gold hands down.
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Old 08-01-2013, 08:16 PM   #713
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Post 706 Arkie. Read it.
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Old 08-01-2013, 11:18 PM   #714
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Originally Posted by Fedaykin View Post
LMAO

$37 was a fixed, legislated price (i.e. the gold standard), not a market price. It only existed at a time when it was illegal for individuals or companies to possess gold in significant quantities.

Sure, if you happened to illegally own a large amount of gold during that transition, you made some serious money (or went to prison). It wasn't legal to own large amounts of physical gold until 1974, after the U.S. exited the gold standard.

In other words, calling $35 the starting market price of gold is silly, bordering on the absurd. The only people that had any serious investment opportunity starting at that price were unlawfully in posession of that gold.

In 1974, after it was legal to actually posses in large (investment) quantities, the price of gold started at $155/oz.

In other words, an ~8x gain is the best you could legally get out of gold (~12x if you sold at peak in 2011). The Dow has gained ~25x in that same time frame.



It's cute that you specifically pick the peak of a DOW bubble as your starting point. A few months in either direction and it completely changes the outcome (see: bubble!). I can play that game too! how about we pick 1980-present for a comparison?

We've already been over this multiple times...
In other words...

Let's pretend someone is paying $250/oz for marijuana, which is currently illegal and I in no way shape or form condone... At some point in the future when marijuana is legalized, if it were a publicly traded commodity, starting from what that person paid in 2013 ($250/oz) to wherever the commodity was valued 40 years from the point at which it was legalized and became publicly traded is not exactly a very good method of measurement, especially against a standard of measurement (the Dow) which had been around for far longer.
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Old 08-02-2013, 07:16 AM   #715
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In other words...

Let's pretend someone is paying $250/oz for marijuana, which is currently illegal and I in no way shape or form condone... At some point in the future when marijuana is legalized, if it were a publicly traded commodity, starting from what that person paid in 2013 ($250/oz) to wherever the commodity was valued 40 years from the point at which it was legalized and became publicly traded is not exactly a very good method of measurement, especially against a standard of measurement (the Dow) which had been around for far longer.
The 5x price increase between 1970 and 1974 was essentially a price correction for gold having been artificially pegged to the dollar at a ridiculously low price, because yes, even during the gold standard inflation occurred. There's nothing about saying pieces of paper are backed by gold that prevents extra pieces of paper from being printed. If you believe otherwise, I have a bridge to sell ya...
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Old 08-15-2013, 02:56 PM   #716
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Are we in the calm before the storm? Some think so. MHG

Gold & Silver To Skyrocket As Stocks Begin Historic Collapse

On the heels of recent strength in gold and silver, today a 58-year market veteran warned King World News that global stock markets are now poised for a breathtaking collapse. Ron Rosen, who has been at this business for almost six decades, also told KWN that gold and silver will skyrocket as the markets begin this historic collapse.

http://kingworldnews.com/kingworldne..._Collapse.html
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Old 08-27-2013, 10:49 AM   #717
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If...if..if....

Any investment is a sucker bet if you don't play the peaks and valleys correctly.

BTW....I'm calling Bernakes bluff that he will be ending QE soon. I don't think they can or will.

Interesting times ahead! Bubble bubble bubble...pop...bubble bubble bubble pop!
Well the markets seem to be agreeing with me. Perhaps if you listened you are up about 20% since this post.
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Old 08-27-2013, 11:01 AM   #718
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Well the markets seem to be agreeing with me. Perhaps if you listened you are up about 20% since this post.
Gold is responding to equities, as it always does....especially after the spectacular drop in gold's value. Nothing new or unexpected and not a 'wealth preservation' play, more like a Vegas play.

This is a good time to look at moving away from bonds and getting ready for a buying opportunity in stocks.

Gold will drop again when equities have fully 'corrected' and get back to a bull market.

In the meantime, stocks pay out the same dollar amount in dividends while we wait.
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Old 08-27-2013, 11:08 AM   #719
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Gold is responding to equities, as it always does....especially after the spectacular drop in gold's value. Nothing new or unexpected and not a 'wealth preservation' play, more like a Vegas play.

This is a good time to look at moving away from bonds and getting ready for a buying opportunity in stocks.

Gold will drop again when equities have fully 'corrected' and get back to a bull market.

In the meantime, stocks pay out the same dollar amount in dividends while we wait.
I have my share of dividend stocks, rentals, other business interests. My point was there was a 20% opportunity that just happened. You either took advantage of it or in your case sounds like you didn't. $18.75 silver is feeling real good right now!

The $1,000 gold club ak1971 will have to keep on waiting...and waiting...and waiting.....It's not happening...
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Old 08-27-2013, 11:09 AM   #720
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Pay attention to the dow gold ratio.
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Old 08-27-2013, 11:14 AM   #721
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I have my share of dividend stocks, rentals, other business interests. My point was there was a 20% opportunity that just happened. You either took advantage of it or in your case sounds like you didn't. $18.75 silver is feeling real good right now!

The $1,000 gold club ak1971 will have to keep on waiting...and waiting...and waiting.....It's not happening...
You're right, I didn't, but then I didn't have the benefit of your hindsight. If I did, I'd have known which stocks to sell to pay for the gold.

So how long will that gold be worth what you paid for it and on which date will you sell?
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Old 08-27-2013, 12:45 PM   #722
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You're right, I didn't, but then I didn't have the benefit of your hindsight. If I did, I'd have known which stocks to sell to pay for the gold.

So how long will that gold be worth what you paid for it and on which date will you sell?
It's impossible to time to tops and bottoms. I'm sure you have a few stocks in your portfolio you bought a little high. The key is to be able to double down on "buying opportunities". It all equals out in the wash. Never opposed to locking in profits though. Just have to go with your gut.

Precious metals took a dive on the Fed fake they were going to taper QE. I thought it was BS in july and I still maintain that it's crap.

Even if they do the debt ceiling will be hit yet again in Oct. Unemployment numbers aren't were they have been targeting them to be. Factor in another war with Syria commodity prices could get real interesting.

"You go to know when to hold em...know when to fold em...know when to walk away know when to run"....

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Old 08-27-2013, 02:59 PM   #723
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Question: When is a "correction" not a correction?

Answer: When it's a crash.

MHG
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Old 08-28-2013, 04:04 PM   #724
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You're right, I didn't, but then I didn't have the benefit of your hindsight. If I did, I'd have known which stocks to sell to pay for the gold.

So how long will that gold be worth what you paid for it and on which date will you sell?
You should sell any stocks to pay for gold at today's prices and especially at the prices a month ago when gold was at selling cost. My challenge still stands. Pick any stock you think will outperform gold over 6 months starting today.

http://www.orangemane.com/BB/showpos...&postcount=698

This challenge is just a game, not investment advice for people taking my side. Timing the market is the hardest part. I don't pick the dates when to sell, just the prices. I won't sell in 6 months if gold outperforms stocks. I will only sell some gold when it's over $2200, or when the dow/gold ratio is below 5. That could be a matter of months or years. Too many variables are in play that can be manipulated.
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Old 08-28-2013, 04:06 PM   #725
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When I first read this I thought it said "Golf is now a bad investment."
We don't care about your bad eyesight
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