The US will find it increasingly difficult to maintain its position of "sole military superpower." When THAT also becomes "shared" as it is evolving right now, the game is over for the dollar. >>
The only problem with that article is that it is incorrect on his hinge point about Warren Buffet. Buffet didn't get into silver untill around late 2002 or early 2003, not the late 90s. Yes, he's got quite a hoard, but from what I've learned he's cost averaged at closer to $6 an ounce than what was implied. I was putting it away prior to that and when I learned about Buffet's move(followed by Bill Gates) I felt much better about my beliefs and financial decisions.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
The US will find it increasingly difficult to maintain its position of "sole military superpower." When THAT also becomes "shared" as it is evolving right now, the game is over for the dollar. >>
The only problem with that article is that it is incorrect on his hinge point about Warren Buffet. Buffet didn't get into silver untill around late 2002 or early 2003, not the late 90s. Yes, he's got quite a hoard, but from what I've learned he's cost averaged at closer to $6 an ounce than what was implied. I was putting it away prior to that and when I learned about Buffet's move(followed by Bill Gates) I felt much better about my beliefs and financial decisions. >>
I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
<< <i>I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998. >>
Very interesting. I think I stand corected, but everything I've ever read about Buffet's move into silver says differently.
I'm wondering if that is all they are willing to state publicly. I'm prettty sure Buffet made a HUGE puchase in physical silver around that late 2002/early 2003 time frame.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998. >>
Very interesting. I think I stand corected, but everything I've ever read about Buffet's move into silver says differently.
I'm wondering if that is all they are willing to state publicly. I'm prettty sure Buffet made a HUGE puchase in physical silver around that late 2002/early 2003 time frame. >>
Bill Gates may well have made some purchases in this time frame.
I saw a figure on Buffets average cost. I believe it was around $6.27 / OZt.
<< <i>Bill Gates may well have made some purchases in this time frame.
I saw a figure on Buffets average cost. I believe it was around $6.27 / OZt. >>
Yes, Gates did sock away a "little bit" in that time frame, but from what I can recall without benefit of newsletters, etc. is that Buffet was also there with a purchase around 4-5 times the amount of Mr. MS.
Who knows for certain? I had read something that put Buffet's cost average right around your number, I thought it was just a tad lower but not enough to make much of a difference.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Buffet's silver investment has only kept pace with the returns of the Nasdaq or 30yr bond over these past 8 years. If not for this silver rally over the past month he would have underperformed both. It is also ironic how his own stock BRK.A has outperformed silver over these last 8 years.
So if silver triples from here, and the Dow falls considerably, will that initial 8 years make any difference? It's about winning the race, not winning the first few hills.
<< <i>So if silver triples from here, and the Dow falls considerably, will that initial 8 years make any difference? It's about winning the race, not winning the first few hills.
roadrunner >>
Very true. But how long is the race. A lifetime? 8 years is more than 10% of a lifetime, or more than 20% of a man's investing lifetime.
Buffett could have made many, more profitable investments. Is the race through the Appalachians or the Alps?
You get spooked by silver at say $10.00 so you go out and buy 400 oz because you don't want to be left out. I suspect that is a typical response and also the reason all the shops are busy exchanging 100 oz bars for bens. So, you have $4000 in silver bars plus a little for the deal, call it $4200 for the deal. So after a bit, silver LEAPS to $15 OH GOD, MY SHIP HAS COME IN!!! So, you made $5 on 400 oz or $2000 over a period of 6 months. And, you have a 1099 (call it 28% for taxes) plus exchange fees getting out, call it $560 for taxes and $200 in exchange fees to get out...so you have $760 deducted from your $2000 profit, so you are looking at about $1200 (about the wholesale price of a 63 $10 indian common date) in profit over 6 months for a $4200 investment . So, you have a few hours into the deal, a 1099, a bunch of fretting and carrying on and $1200 as a reward for floating $4200 in the market place for half a year.
Of course, if silver drops back to $9 and you're still holding it after all the hype is over, then you have a messy situation and you wife wants to know where her new kitchen cabinets are that you promised her for your anniversary and you have to fabricate some money to go with the song and dance routine about why she doesn't have her cabinets. And you didn't get that common indian you had been wishing for in the first place...hummmmmmmm.
You get spooked by silver at say $10.00 so you go out and buy 400 oz because you don't want to be left out. I suspect that is a typical response and also the reason all the shops are busy exchanging 100 oz bars for bens. So, you have $4000 in silver bars plus a little for the deal, call it $4200 for the deal. So after a bit, silver LEAPS to $15 OH GOD, MY SHIP HAS COME IN!!! So, you made $5 on 400 oz or $2000 over a period of 6 months. And, you have a 1099 (call it 28% for taxes) plus exchange fees getting out, call it $560 for taxes and $200 in exchange fees to get out...so you have $760 deducted from your $2000 profit, so you are looking at about $1200 (about the wholesale price of a 63 $10 indian common date) in profit over 6 months for a $4200 investment . So, you have a few hours into the deal, a 1099, a bunch of fretting and carrying on and $1200 as a reward for floating $4200 in the market place for half a year.
Of course, if silver drops back to $9 and you're still holding it after all the hype is over, then you have a messy situation and you wife wants to know where her new kitchen cabinets are that you promised her for your anniversary and you have to fabricate some money to go with the song and dance routine about why she doesn't have her cabinets. And you didn't get that common indian you had been wishing for in the first place...hummmmmmmm.
Enjoy >>
This doesn't strike me as all that common a scenario. More of a Devil's Advocate, what if, fly in the ointment, type of unlikely situation.
BTW, you won't have a 1099 in this situation and you've left out available deductions in this particular case. Also, for a six month period, you aren't looking at the 28% Cap Gains. At that point it is simply income and you can treat it in a totally different manner depending on one's particular individual situation. Only after a full year plus one day does it become a Cap Gain.
Maybe you weren't after that $10 Indian in the first place either.
Today's slight correction is a week late in my mind anyway. It's always a staircase, up 2 down 1, up 1 down 2, but so far we're several floors above where we started. While some might think waiting till silver was $10 before you moved on it is a bit late to the party, I think the train is just picking up a bit of speed and there's still time to get on for the ride. I really don't believe $9 silver is in the cards either, but each to his own.
I am enjoying things, thanks for the sentiment.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Excellent retort, deadhorse. Of course it is appreciated. I guess I remember when folks were chasing after silver so hard when the stocks went south in the '80's and I got sucked up in the aircraft engines along with about a billion other folks. We held $8/$9 for so long and in the end it was a brutal slaughter. Those that went for gold were just beat up more. I do think that this run is genuine and it will be a nice ride. I do think it is a bit late with silver and not too late with gold but that's just my assessment of the conditions from my little rock in the pond. I am quite content with my modest accumulation, it's always good to have a cushion. Coin on!
Well folks, I am selling my gold mutual fund shares today. The gold bug HUI chart looks ominous. Charts aren't everything, but they mean something to me.
Good luck to all. Cheers.
/ The filter won't let me post the link to the chart, the curious can see it at bigcharts.com and enter HUI as the symbol /
<< <i>I'm buying kitchen cabinets. Then when TSHTF, I can wash vegetables for the silver owners. >>
What kind? I bought a german kitchen ( Alno ) back when the dollar was worth something and it was real pretty albeit high priced. Probably more now as then it was the mark vs the dollar. Then I had another kitchen done and the cabinets came from Canada., with the kitchen costing me 100 G's. I couldn't "afford" cabinets made in the US then so Canada was the deal.
Buffett could have made many, more profitable investments. Is the race through the Appalachians or the Alps?
You mean like his play of buying foreign currencies to short the dollar? (big loser too...so far). Seem like he has a penchant for slow and steady.....and yes......8 yrs appears to be a short time period for Mr. Buffet but not for today's hyperactive, 35 year old hedge fund players. His currency play will probably eventually play out as remarkable as will his silver holdings.
Buffet was also out of the Nasdaq for a few years and was chided for that as well. 8 years later he is once again labeled a genius. Yup, it only takes 8 years to go from hero to goat.
That's one of the biggest problems with today's instant gratificiation investment generation. They want 30% returns this year and next, etc. It is their birthright to earn 15% minimum per year. No one can wait 2 years..... let alone 8 or 20. The days of doubling one's money in the index type stock funds every 5-10 years is long gone. Inching out 5-8% per year is gonna look good.....though not when you compare it against 6-12% real inflation.
“let alone 8 or 20. The days of doubling one's money in the index type stock funds every 5-10 years is long gone.”
RR I agree, but folks keep poring their money in the funds.
Yesterday, “March 31 (Bloomberg) -- Fidelity Investments plans to close the $63.8 billion Contrafund after a swell of investors' money catapulted it ahead of Magellan as the company's largest mutual fund. The top holding in each fund as of Dec. 31 was Internet search engine provider Google Inc.”
I wonder how these fund managers would have done putting just one billion each in the Silver market rather than in Google?
What I see is that people are so desperate to find any decent investment they will take whatever risks may come their way.
Deep inside they know that the government, and news media shows like Larry Kudlow are lying about inflation, but they also do not want to do any “investment work”. They just do not want to have to do their own thinking.
It was interesting yesterday to flip through the financials shows at the end of the first quarter, and watch all the talking heads slap themselves on the back. You would have thought the S&P had made huge gains the way they gloated over the 3.9% increase in the first quarter? Gee guys and gals you could have done that in C.D.’S!
With real inflation going to run 6% this year minimum, most folks earning 3.9% only lost 2.1% of their purchasing power the first quarter.
Here is an interesting side note: MY wife visits are local Wall Mart about once each week to pick up a few groceries and things like suntan lotion, cosmetics, bird seed etc. Last week she noticed that most of the items she buys had been marked up $1.00 across the board. When she cornered an asst. manager and ask him why, he said freight and fuel costs !!
Fidelity Contrafund? That was just added to our company's stodgy 401K plan. It beats the typical index growth fund (Lg, Mid, Sm). But I doubt I'll be in any of the typical stock funds much longer as the rug feels like it is slowly coming out. Starting to feel like the time to stick with safer bets. It's not so much about earning money, but keeping what you got (inflation adjusted). Most 401k's don't allow enough exposure to PM's and other commodities/hard asset companies in order to lock into real "things."
Speaking of gold, came within $7 Thursday of a $595 gold close. And at that point I collect on my bet with a fellow forum member.
Still like Type 3 $1 gold pieces in MS64 as too cheap for the rest of the market. And $5 Libs in MS65 are still lagging the $10's and $20's.
That's one of the biggest problems with today's instant gratificiation investment generation. They want 30% returns this year and next, etc. It is their birthright to earn 15% minimum per year. No one can wait 2 years..... let alone 8 or 20. The days of doubling one's money in the index type stock funds every 5-10 years is long gone.
Very possibly true. But if I cant get 12% return per year then why should I bother investing. If inflation is so high I am better off spending my money. Perhaps the masses are not so stupid after all.
There is nothing wrong with wanting 30% per yr. We all want it. Few get it, most do not. I want to be one of the few and there is nothing wrong with trying to get it. I have no doubt that that Buffett's trades will work out as time has a tendency to heal mistakes. The point of my post was simply that Buffett is no investing GOD as many would like to believe.
To see an old geezer like Buffett dodge the dot.com bullet and grow his company into a massive winner by steady hard work, that deserves some praise. Rather than rely on get rich quick schemes that many boomers seem to gravitate towards, he did it with common sense. And as the air pops out of the 1990's to 2005 bubble market, those nouveau rich will lose much of what they gained. Buffett's numbers will look even more impressive. Hoping for 30% gains is not a bad idea. But expecting that as normal, or continuing to try risky bets to corral that 30% one way or another, is gonna get a whole lot of "speculators" in trouble down in Margaritaville (J. Buffett)
Anyone read the story the other day that the debt clock is going to become obsolete "within" the next 2 years the debt passes the 10 Trillion dollar mark? Not enough numbers in that thing.
You know, they are GOING to collect on that money. One way, or another.
<< <i>To see an old geezer like Buffett dodge the dot.com bullet and grow his company into a massive winner by steady hard work, that deserves some praise. Rather than rely on get rich quick schemes that many boomers seem to gravitate towards, he did it with common sense. And as the air pops out of the 1990's to 2005 bubble market, those nouveau rich will lose much of what they gained. Buffett's numbers will look even more impressive. Hoping for 30% gains is not a bad idea. But expecting that as normal, or continuing to try risky bets to corral that 30% one way or another, is gonna get a whole lot of "speculators" in trouble down in Margaritaville (J. Buffett)
Here are some simple facts one must consider if you are reaching retirement age. If you are married to someone near your age, and both man and wife earn approximately $120,000 gross per year, experts say you should count on having 70% of your current income per year in order to retire, and have your current lifestyle remain the same. So you will need an income of $84,000 per year. If you retire at age 65 and both live to age 80 you will need $1,260,000 saved for retirement.
Will that be enough? If real inflation continues at it current real rate of just 4% per year your $1,260,000 will be cut a total of 60% across the board in 15 years, and you would lose $756,000 in buying power.
If you were one of the very rare exceptions to have saved $1,260,000 by age 65 here is what your monthly budget might look like. $84,000 divided by 12 = $7,000 per month.
$7,000 - 4% inflation - 280 - 40% in all taxes - 2,800 - a mortgage with at least 15 years left - 1,500 - Health insurance for two - 450 - car insurance for two cars - 100 - utilities, and gasoline - 400 - Food and sundries for two - 500 -clothes, and other necessities - 200 - car and credit card payments - 150 - monthly medications - 300
Total expenses $6680
Congratulations you have $320 left each month. Not enough to own a second home, or go on more than one expensive vacation per year, also no boats or expensive hobbies.
This also assumes that you have your money in cash, and not in stocks or other investments, were you might owe cap gains taxes etc.
"A majority of workers say they're confident about retirement, but they don't have the dollars to show for it. By Jeanne Sahadi, CNNMoney.com senior writer April 4, 2006: 6:49 AM EDT
NEW YORK (CNNMoney.com) – Cognitive Dissonance 101 might be a fitting title for the findings from the 2006 retirement confidence survey released Tuesday by the Employee Benefit Research Institute.
Here's just one example: A quarter of workers participating in the survey said they were very confident about their prospects for financial security in retirement, and another 44 percent said they were somewhat confident. But among those in the very confident group, 22 percent said they aren't currently saving for retirement and 39 percent said they have less than $50,000 in savings.
Of course, low savings aren't the exclusive domain of the overconfident. Sixty-five percent of all workers said they had less than $50,000 in total savings and investments, not including the value of their home or any defined-benefit pension they may receive.
High expectations...Nevertheless, 59 percent of all workers say they'd like to enjoy a standard of living in retirement that is the same or better than the standard of living they have in their working years.
But half the respondents think they can manage that on 70 percent or less of their pre-retirement income.
That doesn't square with financial experts' recommendation that you should plan to live on at least 70 percent of your pre-retirement income. Nor does it square with the 55 percent of present-day retirees surveyed who said they live on 95 percent or more of their pre-retirement income.
Healthcare and pensions...Then there's the disconnect between what workers expect to receive in terms of pension and healthcare benefits and the fact that companies increasingly are freezing their pension plans and modifying or eliminating healthcare benefits.”
I still believe it's headed to 40:1 in the short term but am very surprised by the continuing strenght in both metals. They are overdue for a correction but the buying seems to just keep materializing. If the economy continues its recovery this buying could turn into selling very quickly, especially for gold.
Hmmmm...... gold is nipping at the $600 level...... actually reached it today, but will see where it closes. Weren't there a lot of bets on whether it would reach this level??
Well Gentlemen, it looks like the public is finally catching on just a tad to the metals market.
My personal predictions for Gold, and sliver as well, in December have now been blown out of the water with Gold reaching $600 today and silver at $12.08.
Gold did not surprise me too much, but I really reached out in December calling silver to hit $12.00 in 2006, and that level is already reached within the first few months.
I now think we will start to see common date silver moderns start to move dramatically during the rest of the year. In fact most of the moderns where silver is a big factor in price should double in value by year-end.
Forget rare coins, if you just want to make a great return just buy modern Silver coins.
Any new predictions now that we have made these highs so early?
unless you absolutely need the money you should never sell your wealth insurance
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<< <i>Well Gentlemen, it looks like the public is finally catching on just a tad to the metals market.
My personal predictions for Gold, and sliver as well, in December have now been blown out of the water with Gold reaching $600 today and silver at $12.08.
Gold did not surprise me too much, but I really reached out in December calling silver to hit $12.00 in 2006, and that level is already reached within the first few months.
I now think we will start to see common date silver moderns start to move dramatically during the rest of the year. In fact most of the moderns where silver is a big factor in price should double in value by year-end.
Forget rare coins, if you just want to make a great return just buy modern Silver coins.
Any new predictions now that we have made these highs so early?
As far as bets go who has that thread of Lloyds? >>
I'm sure you're right but think you might be surprised how much attention base metal moderns get from all this. Especially clad coins will get more attention as people look for places to put metals profits. Money tends to flow more into what's already hot rather than like items. In 1979 silver dollars and type silver got all the attention more because they were already hot moreso than that they were silver.
While the coin market does feed off the metals markets it should not be expected to see the sort of frenzy that happened in '79 even if metals prices get so high. In those days there were huge amounts of silver and gold owned by the public and the dealers made a lot of their money in bro- kering it. Anyone who didn't see at $50 in highly unlikely to sell now and those who did sell have mostly not replaced it.
There is a sense that all these markets are getting a little frenzied and caution is VERY advisable.
<< <i>You need to understand that you are not selling gold for money.
Gold IS the money. Dollars are a media for exchange.
The paper called dollars are good only when you are transacting business. Otherwise they continue to lose value as you hold them in dollar form. >>
i understand - and agree - with that.
Nonetheless, to have sold gold bullion at $800 an ounce would have netted you more wealth (gold/dollars) just 1-2 years later - in fact even to today. In "real" terms, gold is still quite a bit cheaper than it was at its peak of +$800.
Let's put it another way - I need a new car. I can wait another year, or get it this summer. I have 30 ounces of bullion. Would I be better off spending those 30 ounces now, or next year?
<< <i>If you hold gold bullion - at what point do you intend to sell? >>
When I need dollars to use for something else.
You need to understand that you are not selling gold for money.
Gold IS the money. Dollars are a media for exchange.
The paper called dollars are good only when you are transacting business. Otherwise they continue to lose value as you hold them in dollar form. >>
Money is what people think is money. Dollars lose value only when people think they have less value which is caused by excessive prointing or easier accessability to them.
Gold is a mere commodity because it is not widely accepted. It may be money to some people but unless it's spendable at the grocery it is not currency.
Does anyone, perchance, foresee silver moving DOWN in the near term? I unfortunately had no money to invest when it was so low for so long.
I am not looking for quick profits, btw, but to hold long term. The 21st century will be the century of scarcity, so it is against the eventual depletion of above ground silver reserves and the permanent future imbalance between demand and limited production that I am looking at, but I still want to acquire as cheaply as possible.
Twelve dollars an ounce, historically low or no, pinches my small pocketbook, especially if a move lower is in the cards before the long ascent. It seems this run up is gaining momentum from psychological effects rather than scarcity.
<< <i>Let's put it another way - I need a new car. I can wait another year, or get it this summer. I have 30 ounces of bullion. Would I be better off spending those 30 ounces now, or next year?
>>
Ok you have 2 variables here, the purchasing power of the gold and the cost of the car.
The purchasing power of the gold will depend on: Inflation Demand Supply Government manipulation of gold and currency interest rates
The value of the car will vary with: The economy cost to produce interest rates
My take is that inflation is higher than any govenment will admit to and many people in the world are moving to gold because they don't trust thier govenments ability to manage their currency. the US is not the only country printing way too much money.
The demand for will continue to rise due to these factors
The supply from mining will not increase enough to keep up with current demand and usage.
AH........but supply and demand can be manipulated by govenments as it has been since 1989. (wildcard here)
Interest rates can make other investments more or less attractive
Now as far as the car, a manufactured good
supply and demand as well as production costs will change based on the health of the economy. High interest rates will work in the buyers favor (unless you are financing it). Inflation on the other hand may make the car more expensive.
So my recommendation is that you sell the gold, buy the brand new car, enjoy life and when the SHT hits the fan and you are broke you can scream for the govenment to take care of you like all the other people will be doing!!!
I decided to start putting a little money into silver (small lots of pre-1964 US junk coins) based on natural inclination, the historically low price, and the fact that there is less silver in reserve than gold, with more being used than produced.
However, silver has gone up three dollars since I started! Now I am left wondering if I just keep buying a little at a time as I had planned, keeping the long term in mind and ignoring short term gains and losses, or wait for a downward adjustment and make a larger move.
I'd like to have a few thousand ounces physically in my possesion without a paper trail (thanks eBay), by the time the real trouble starts.
Comments
<< <i>Point.
and
Counterpoint
The US will find it increasingly difficult to maintain its position of "sole military superpower." When THAT also becomes "shared" as it is evolving right now, the game is over for the dollar. >>
The only problem with that article is that it is incorrect on his hinge point about Warren Buffet. Buffet didn't get into silver untill around late 2002 or early 2003, not the late 90s. Yes, he's got quite a hoard, but from what I've learned he's cost averaged at closer to $6 an ounce than what was implied. I was putting it away prior to that and when I learned about Buffet's move(followed by Bill Gates) I felt much better about my beliefs and financial decisions.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>Point.
and
Counterpoint
The US will find it increasingly difficult to maintain its position of "sole military superpower." When THAT also becomes "shared" as it is evolving right now, the game is over for the dollar. >>
The only problem with that article is that it is incorrect on his hinge point about Warren Buffet. Buffet didn't get into silver untill around late 2002 or early 2003, not the late 90s. Yes, he's got quite a hoard, but from what I've learned he's cost averaged at closer to $6 an ounce than what was implied. I was putting it away prior to that and when I learned about Buffet's move(followed by Bill Gates) I felt much better about my beliefs and financial decisions. >>
I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
from
http://www.berkshirehathaway.com/news/feb03981.html
The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998.
<< <i>I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
from
http://www.berkshirehathaway.com/news/feb03981.html
The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998. >>
Very interesting. I think I stand corected, but everything I've ever read about Buffet's move into silver says differently.
I'm wondering if that is all they are willing to state publicly. I'm prettty sure Buffet made a HUGE puchase in physical silver around that late 2002/early 2003 time frame.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>I think $6 average cost for Buffett is about right, might be a bit lower but it isn't rock bottom. No one can buy 100 million ounces at the bottom, not even a legend. Buffett leases out his silver making about 2% "interest" while mere mortals pay storage fees and this helps his total return.
from
http://www.berkshirehathaway.com/news/feb03981.html
The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998. >>
Very interesting. I think I stand corected, but everything I've ever read about Buffet's move into silver says differently.
I'm wondering if that is all they are willing to state publicly. I'm prettty sure Buffet made a HUGE puchase in physical silver around that late 2002/early 2003 time frame. >>
Bill Gates may well have made some purchases in this time frame.
I saw a figure on Buffets average cost. I believe it was around $6.27 / OZt.
<< <i>Bill Gates may well have made some purchases in this time frame.
I saw a figure on Buffets average cost. I believe it was around $6.27 / OZt. >>
Yes, Gates did sock away a "little bit" in that time frame, but from what I can recall without benefit of newsletters, etc. is that Buffet was also there with a purchase around 4-5 times the amount of Mr. MS.
Who knows for certain? I had read something that put Buffet's cost average right around your number, I thought it was just a tad lower but not enough to make much of a difference.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Knowledge is the enemy of fear
roadrunner
<< <i>
<< <i>Could someone kindly summarize this thread for me?
Sure, he who has the gold makes the rules...
Nah, he who has the guns , takes the gold and makes the rules
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>So if silver triples from here, and the Dow falls considerably, will that initial 8 years make any difference? It's about winning the race, not winning the first few hills.
roadrunner >>
Very true. But how long is the race. A lifetime? 8 years is more than 10% of a lifetime, or more than 20% of a man's investing lifetime.
Buffett could have made many, more profitable investments. Is the race through the Appalachians or the Alps?
Knowledge is the enemy of fear
You get spooked by silver at say $10.00 so you go out and buy 400 oz because you don't want to be left out. I suspect that is a typical response and also the reason all the shops are busy exchanging 100 oz bars for bens. So, you have $4000 in silver bars plus a little for the deal, call it $4200 for the deal. So after a bit, silver LEAPS to $15 OH GOD, MY SHIP HAS COME IN!!! So, you made $5 on 400 oz or $2000 over a period of 6 months. And, you have a 1099 (call it 28% for taxes) plus exchange fees getting out, call it $560 for taxes and $200 in exchange fees to get out...so you have $760 deducted from your $2000 profit, so you are looking at about $1200 (about the wholesale price of a 63 $10 indian common date) in profit over 6 months for a $4200 investment . So, you have a few hours into the deal, a 1099, a bunch of fretting and carrying on and $1200 as a reward for floating $4200 in the market place for half a year.
Of course, if silver drops back to $9 and you're still holding it after all the hype is over, then you have a messy situation and you wife wants to know where her new kitchen cabinets are that you promised her for your anniversary and you have to fabricate some money to go with the song and dance routine about why she doesn't have her cabinets. And you didn't get that common indian you had been wishing for in the first place...hummmmmmmm.
Enjoy
Another Bullion thread.
hi, i'm tom.
i do not doctor coins like some who post in here.
<< <i>Ok...just for drill.
You get spooked by silver at say $10.00 so you go out and buy 400 oz because you don't want to be left out. I suspect that is a typical response and also the reason all the shops are busy exchanging 100 oz bars for bens. So, you have $4000 in silver bars plus a little for the deal, call it $4200 for the deal. So after a bit, silver LEAPS to $15 OH GOD, MY SHIP HAS COME IN!!! So, you made $5 on 400 oz or $2000 over a period of 6 months. And, you have a 1099 (call it 28% for taxes) plus exchange fees getting out, call it $560 for taxes and $200 in exchange fees to get out...so you have $760 deducted from your $2000 profit, so you are looking at about $1200 (about the wholesale price of a 63 $10 indian common date) in profit over 6 months for a $4200 investment . So, you have a few hours into the deal, a 1099, a bunch of fretting and carrying on and $1200 as a reward for floating $4200 in the market place for half a year.
Of course, if silver drops back to $9 and you're still holding it after all the hype is over, then you have a messy situation and you wife wants to know where her new kitchen cabinets are that you promised her for your anniversary and you have to fabricate some money to go with the song and dance routine about why she doesn't have her cabinets. And you didn't get that common indian you had been wishing for in the first place...hummmmmmmm.
Enjoy >>
This doesn't strike me as all that common a scenario. More of a Devil's Advocate, what if, fly in the ointment, type of unlikely situation.
BTW, you won't have a 1099 in this situation and you've left out available deductions in this particular case. Also, for a six month period, you aren't looking at the 28% Cap Gains. At that point it is simply income and you can treat it in a totally different manner depending on one's particular individual situation. Only after a full year plus one day does it become a Cap Gain.
Maybe you weren't after that $10 Indian in the first place either.
Today's slight correction is a week late in my mind anyway. It's always a staircase, up 2 down 1, up 1 down 2, but so far we're several floors above where we started. While some might think waiting till silver was $10 before you moved on it is a bit late to the party, I think the train is just picking up a bit of speed and there's still time to get on for the ride. I really don't believe $9 silver is in the cards either, but each to his own.
I am enjoying things, thanks for the sentiment.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Saul Goode
Good luck to all. Cheers.
/ The filter won't let me post the link to the chart, the curious can see it at bigcharts.com and enter HUI as the symbol /
Knowledge is the enemy of fear
<< <i>I'm buying kitchen cabinets. Then when TSHTF, I can wash vegetables for the silver owners. >>
What kind? I bought a german kitchen ( Alno ) back when the dollar was worth something and it was real pretty albeit high priced. Probably more now as then it was the mark vs the dollar. Then I had another kitchen done and the cabinets came from Canada., with the kitchen costing me 100 G's. I couldn't "afford" cabinets made in the US then so Canada was the deal.
What now?
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
You mean like his play of buying foreign currencies to short the dollar? (big loser too...so far). Seem like he has a penchant for slow and steady.....and yes......8 yrs appears to be a short time period for Mr. Buffet but not for today's hyperactive, 35 year old hedge fund players. His currency play will probably eventually play out as remarkable as will his silver holdings.
Buffet was also out of the Nasdaq for a few years and was chided for that as well. 8 years later he is once again labeled a genius.
Yup, it only takes 8 years to go from hero to goat.
That's one of the biggest problems with today's instant gratificiation investment generation. They want 30% returns this year and next, etc. It is their birthright to earn 15% minimum per year. No one can wait 2 years..... let alone 8 or 20. The days of doubling one's money in the index type stock funds every 5-10 years is long gone.
Inching out 5-8% per year is gonna look good.....though not when you compare it against 6-12% real inflation.
roadrunner
“let alone 8 or 20. The days of doubling one's money in the index type stock funds every 5-10 years is long gone.”
RR I agree, but folks keep poring their money in the funds.
Yesterday,
“March 31 (Bloomberg) -- Fidelity Investments plans to close the $63.8 billion Contrafund after a swell of investors' money catapulted it ahead of Magellan as the company's largest mutual fund.
The top holding in each fund as of Dec. 31 was Internet search engine provider Google Inc.”
I wonder how these fund managers would have done putting just one billion each in the Silver market rather than in Google?
What I see is that people are so desperate to find any decent investment they will take whatever risks may come their way.
Deep inside they know that the government, and news media shows like Larry Kudlow are lying about inflation, but they also do not want to do any “investment work”. They just do not want to have to do their own thinking.
It was interesting yesterday to flip through the financials shows at the end of the first quarter, and watch all the talking heads slap themselves on the back. You would have thought the S&P had made huge gains the way they gloated over the 3.9% increase in the first quarter? Gee guys and gals you could have done that in C.D.’S!
With real inflation going to run 6% this year minimum, most folks earning 3.9% only lost 2.1% of their purchasing power the first quarter.
Here is an interesting side note: MY wife visits are local Wall Mart about once each week to pick up a few groceries and things like suntan lotion, cosmetics, bird seed etc. Last week she noticed that most of the items she buys had been marked up $1.00 across the board. When she cornered an asst. manager and ask him why, he said freight and fuel costs !!
401K plan. It beats the typical index growth fund (Lg, Mid, Sm).
But I doubt I'll be in any of the typical stock funds much longer as the rug feels like it is slowly coming out. Starting to feel like the time to stick with safer bets. It's not so much about earning money, but keeping what you got (inflation adjusted). Most 401k's don't allow enough exposure to PM's and other commodities/hard asset companies in order to lock into real "things."
Speaking of gold, came within $7 Thursday of a $595 gold close. And at that point I collect on my bet with a fellow forum member.
Still like Type 3 $1 gold pieces in MS64 as too cheap for the rest of the market. And $5 Libs in MS65 are still lagging the $10's and $20's.
roadrunner
Very possibly true. But if I cant get 12% return per year then why should I bother investing. If inflation is so high I am better off spending my money. Perhaps the masses are not so stupid after all.
There is nothing wrong with wanting 30% per yr. We all want it. Few get it, most do not. I want to be one of the few and there is nothing wrong with trying to get it. I have no doubt that that Buffett's trades will work out as time has a tendency to heal mistakes. The point of my post was simply that Buffett is no investing GOD as many would like to believe.
Knowledge is the enemy of fear
roadrunner
You know, they are GOING to collect on that money. One way, or another.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
will lop off all the zero's so that the National debt
will now be only 6.7. Now, is'nt that all better?
Camelot
<< <i>To see an old geezer like Buffett dodge the dot.com bullet and grow his company into a massive winner by steady hard work, that deserves some praise. Rather than rely on get rich quick schemes that many boomers seem to gravitate towards, he did it with common sense. And as the air pops out of the 1990's to 2005 bubble market, those nouveau rich will lose much of what they gained. Buffett's numbers will look even more impressive. Hoping for 30% gains is not a bad idea. But expecting that as normal, or continuing to try risky bets to corral that 30% one way or another, is gonna get a whole lot of "speculators" in trouble down in Margaritaville (J. Buffett)
roadrunner >>
That is why one must be nimble.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Here are some simple facts one must consider if you are reaching retirement age. If you are married to someone near your age, and both man and wife earn approximately $120,000 gross per year, experts say you should count on having 70% of your current income per year in order to retire, and have your current lifestyle remain the same. So you will need an income of $84,000 per year. If you retire at age 65 and both live to age 80 you will need $1,260,000 saved for retirement.
Will that be enough? If real inflation continues at it current real rate of just 4% per year your $1,260,000 will be cut a total of 60% across the board in 15 years, and you would lose $756,000 in buying power.
If you were one of the very rare exceptions to have saved $1,260,000 by age 65 here is what your monthly budget might look like. $84,000 divided by 12 = $7,000 per month.
$7,000
- 4% inflation - 280
- 40% in all taxes - 2,800
- a mortgage with at
least 15 years left - 1,500
- Health insurance for two - 450
- car insurance for two cars - 100
- utilities, and gasoline - 400
- Food and sundries for two - 500
-clothes, and other
necessities - 200
- car and credit card payments - 150
- monthly medications - 300
Total expenses $6680
Congratulations you have $320 left each month. Not enough to own a second home, or go on more than one expensive vacation per year, also no boats or expensive hobbies.
This also assumes that you have your money in cash, and not in stocks or other investments, were you might owe cap gains taxes etc.
"A majority of workers say they're confident about retirement, but they don't have the dollars to show for it.
By Jeanne Sahadi, CNNMoney.com senior writer
April 4, 2006: 6:49 AM EDT
NEW YORK (CNNMoney.com) – Cognitive Dissonance 101 might be a fitting title for the findings from the 2006 retirement confidence survey released Tuesday by the Employee Benefit Research Institute.
Here's just one example: A quarter of workers participating in the survey said they were very confident about their prospects for financial security in retirement, and another 44 percent said they were somewhat confident.
But among those in the very confident group, 22 percent said they aren't currently saving for retirement and 39 percent said they have less than $50,000 in savings.
Of course, low savings aren't the exclusive domain of the overconfident. Sixty-five percent of all workers said they had less than $50,000 in total savings and investments, not including the value of their home or any defined-benefit pension they may receive.
High expectations...Nevertheless, 59 percent of all workers say they'd like to enjoy a standard of living in retirement that is the same or better than the standard of living they have in their working years.
But half the respondents think they can manage that on 70 percent or less of their pre-retirement income.
That doesn't square with financial experts' recommendation that you should plan to live on at least 70 percent of your pre-retirement income. Nor does it square with the 55 percent of present-day retirees surveyed who said they live on 95 percent or more of their pre-retirement income.
Healthcare and pensions...Then there's the disconnect between what workers expect to receive in terms of pension and healthcare benefits and the fact that companies increasingly are freezing their pension plans and modifying or eliminating healthcare benefits.”
I still believe it's headed to 40:1 in the short term but am very surprised by the continuing strenght in both metals. They are overdue for a correction but the buying seems to just keep materializing. If the economy continues its recovery this buying could turn into selling very quickly, especially for gold.
Random Collector
www.marksmedals.com
My personal predictions for Gold, and sliver as well, in December have now been blown out of the water with Gold reaching $600 today and silver at $12.08.
Gold did not surprise me too much, but I really reached out in December calling silver to hit $12.00 in 2006, and that level is already reached within the first few months.
I now think we will start to see common date silver moderns start to move dramatically during the rest of the year. In fact most of the moderns where silver is a big factor in price should double in value by year-end.
Forget rare coins, if you just want to make a great return just buy modern Silver coins.
Any new predictions now that we have made these highs so early?
As far as bets go who has that thread of Lloyds?
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
Everyone says buy - but do people have an exit point?
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jrt103;tizofthe;bronze6827;mkman;Scootersdad;AllCoinsRule;coindeuce;dmarks;piecesofme; and many more
<< <i>Well Gentlemen, it looks like the public is finally catching on just a tad to the metals market.
My personal predictions for Gold, and sliver as well, in December have now been blown out of the water with Gold reaching $600 today and silver at $12.08.
Gold did not surprise me too much, but I really reached out in December calling silver to hit $12.00 in 2006, and that level is already reached within the first few months.
I now think we will start to see common date silver moderns start to move dramatically during the rest of the year. In fact most of the moderns where silver is a big factor in price should double in value by year-end.
Forget rare coins, if you just want to make a great return just buy modern Silver coins.
Any new predictions now that we have made these highs so early?
As far as bets go who has that thread of Lloyds? >>
I'm sure you're right but think you might be surprised how much attention base metal moderns
get from all this. Especially clad coins will get more attention as people look for places to put
metals profits. Money tends to flow more into what's already hot rather than like items. In 1979
silver dollars and type silver got all the attention more because they were already hot moreso
than that they were silver.
While the coin market does feed off the metals markets it should not be expected to see the sort
of frenzy that happened in '79 even if metals prices get so high. In those days there were huge
amounts of silver and gold owned by the public and the dealers made a lot of their money in bro-
kering it. Anyone who didn't see at $50 in highly unlikely to sell now and those who did sell have
mostly not replaced it.
There is a sense that all these markets are getting a little frenzied and caution is VERY advisable.
<< <i>If you hold gold bullion - at what point do you intend to sell? >>
When I need dollars to use for something else.
You need to understand that you are not selling gold for money.
Gold IS the money. Dollars are a media for exchange.
The paper called dollars are good only when you are transacting business. Otherwise they continue to lose value as you hold them in dollar form.
<< <i>You need to understand that you are not selling gold for money.
Gold IS the money. Dollars are a media for exchange.
The paper called dollars are good only when you are transacting business. Otherwise they continue to lose value as you hold them in dollar form. >>
i understand - and agree - with that.
Nonetheless, to have sold gold bullion at $800 an ounce would have netted you more wealth (gold/dollars) just 1-2 years later - in fact even to today. In "real" terms, gold is still quite a bit cheaper than it was at its peak of +$800.
Let's put it another way - I need a new car. I can wait another year, or get it this summer. I have 30 ounces of bullion. Would I be better off spending those 30 ounces now, or next year?
<< <i>
<< <i>If you hold gold bullion - at what point do you intend to sell? >>
When I need dollars to use for something else.
You need to understand that you are not selling gold for money.
Gold IS the money. Dollars are a media for exchange.
The paper called dollars are good only when you are transacting business. Otherwise they continue to lose value as you hold them in dollar form. >>
Money is what people think is money. Dollars lose value only when people
think they have less value which is caused by excessive prointing or easier
accessability to them.
Gold is a mere commodity because it is not widely accepted. It may be money
to some people but unless it's spendable at the grocery it is not currency.
I am not looking for quick profits, btw, but to hold long term. The 21st century will be the century of scarcity, so it is against the eventual depletion of above ground silver reserves and the permanent future imbalance between demand and limited production that I am looking at, but I still want to acquire as cheaply as possible.
Twelve dollars an ounce, historically low or no, pinches my small pocketbook, especially if a move lower is in the cards before the long ascent. It seems this run up is gaining momentum from psychological effects rather than scarcity.
<< <i>Let's put it another way - I need a new car. I can wait another year, or get it this summer. I have 30 ounces of bullion. Would I be better off spending those 30 ounces now, or next year?
>>
Ok you have 2 variables here, the purchasing power of the gold and the cost of the car.
The purchasing power of the gold will depend on:
Inflation
Demand
Supply
Government manipulation of gold and currency
interest rates
The value of the car will vary with:
The economy
cost to produce
interest rates
My take is that inflation is higher than any govenment will admit to and many people in the world are moving to gold because they don't trust thier govenments ability to manage their currency. the US is not the only country printing way too much money.
The demand for will continue to rise due to these factors
The supply from mining will not increase enough to keep up with current demand and usage.
AH........but supply and demand can be manipulated by govenments as it has been since 1989. (wildcard here)
Interest rates can make other investments more or less attractive
Now as far as the car, a manufactured good
supply and demand as well as production costs will change based on the health of the economy. High interest rates will work in the buyers favor (unless you are financing it). Inflation on the other hand may make the car more expensive.
So my recommendation is that you sell the gold, buy the brand new car, enjoy life and when the SHT hits the fan and you are broke you can scream for the govenment to take care of you like all the other people will be doing!!!
I'd like to see it drop and fill a couple of pretty significant gaps.
Then retrace, and build slowly until announcement of ETF. I'd personally expect a drop after the announcement and then more gains.
These sharp charts scare me short term; long term I'm in.
However, silver has gone up three dollars since I started! Now I am left wondering if I just keep buying a little at a time as I had planned, keeping the long term in mind and ignoring short term gains and losses, or wait for a downward adjustment and make a larger move.
I'd like to have a few thousand ounces physically in my possesion without a paper trail (thanks eBay), by the time the real trouble starts.