Interesting correlation in QDB's Coin Investing book between bear stock markets and hot coin markets

Longacre

I don't know if anyone has bought the new QDB book on coin investments. There is an interesting chart in it. It shows periods of when the stock market was in a bear cycle, and then gives a view of the status of the coin market during that same period. Out of the 10 stock bear market periods analyzed (since 1930), the coin market was red hot in each period, except for 3 periods. QDB even states that a fair summary is to say that while both coin and stock markets have their own cycles, hardly ever do the twain meet.

The current stock market has been pretty dismal over the past few years (in my opinion). I know that this has been discussed a lot of times before, but I wonder how much of today's red hot coin market is driven by those looking for better returns than stocks (and will they go back to stocks once the stock market turns around)?

RYK

The current stock market has been pretty dismal over the past few years (in my opinion).

Huh?

The Vanguard Index 500 was up 29% in 2003, 9% in 2004, and 6% ytd. If you were in managed funds, especially those with a small cap or value strategy, your returns were probably higher as large caps have been laggards in the current equity bull market. The media and the political party not in power keep saying the stock market is dismal--don't believe them. When they realize they the market is actually quite good, it will be time to head for the doors.

Longacre

<< <i>The current stock market has been pretty dismal over the past few years (in my opinion).

Huh?

The Vanguard Index 500 was up 29% in 2003, 9% in 2004, and 6% ytd. If you were in managed funds, especially those with a small cap or value strategy, your returns were probably higher as large caps have been laggards in the current equity bull market. The media and the political party not in power keep saying the stock market is dismal--don't believe them. When they realize they the market is actually quite good, it will be time to head for the doors. >>




RYK-- I need to check my portfolio more often. I have Vanguard's Index 500, and some small cap funds, international funds, and some others as well. Perhaps it's time to make another call to Pinnacle and spend some of the profits?

Torrero

So who do you think are good people to give investingadvice on coins? Are there dealers that specialize in only invetment advice?

Longacre

<< <i>So who do you think are good people to give investingadvice on coins? Are there dealers that specialize in only invetment advice? >>



If you turn on your PM, I can give some suggestions.

matteproof

Hi RYK. You said; "The Vanguard Index 500 was up 29% in 2003, 9% in 2004, and 6% ytd. If you were in managed funds, especially those with a small cap or value strategy, your returns were probably higher as large caps have been laggards in the current equity bull market..."

The performance of the stock market has been poor in relation to where it and millions of Americans money and retirements were around five years ago. At that time, the nasdaq was trading at around 5000. Look where it is now (it closed today at around 2253.26). Hardly what I would call a “bull market;” more like a “bull$hit market.” The DOW has fared somewhat better but nothing to write home about. Five years ago or so the DOW was around 12,000. Look where it is now (it closed today at around 10,871); and the dow is considered to be doing “great.” I don’t consider “minus” returns over five years “great.” I consider it outrageously bad (though not as bad as nasdaq).

When gold was trading around $275 per oz a few years ago, vast numbers of so-called savvy Wall Street “Ivy League” MBAs were saying that gold is a dinosaur, a fools investment, an ancient relic; and “goldbugs” they said, were just old fashioned dupes. They were wrong again! Gold is now approaching $500 per oz and the same “Ivy leaguers” who were dishing gold at $275 now seem to love it at $500. You can bet that these same ones will vote themselves nice end of the year bonuses nevertheless. matteproof

Torrero

How do you "turn on your pm"?

Longacre

<< <i>How do you "turn on your pm"? >>




Go into the profiles section in the upper right corner.

RYK

The performance of the stock market has been poor...

Matteproof,

The stats you quoted in reference to the recent performance of gold and the 5 year performance of the major stock indices are irrefutable. I am very comfortable with my position in both asset classes and do not intend to change, nor do I care to convince anyone else that my position is correct. I simply pointed out to Longacre that the stock market performance over the last three years has not been dismal. This is similarly irrefutable.

Robert

Blade

The performance of the stock market has been poor in relation to where it and millions of Americans money and retirements were around five years ago. At that time, the nasdaq was trading at around 5000. Look where it is now (it closed today at around 2253.26). Hardly what I would call a “bull market;” more like a “bull$hit market.” The DOW has fared somewhat better but nothing to write home about. Five years ago or so the DOW was around 12,000. Look where it is now (it closed today at around 10,871); and the dow is considered to be doing “great.” I don’t consider “minus” returns over five years “great.” I consider it outrageously bad (though not as bad as nasdaq).

matteproof,
This is such old news. I agree with your assessment on gold, but the stock market has recovered from the dot.com meltdown. Compare returns to the bottom of the carnage and they have been respectable.

I think it is the risk of inflation that is now driving the push in hard assets, not a flight from stocks because of lack of confidence in that market.

matteproof

Hey Blade. Thank you for your thoughts. You said; "...This is such old news. I agree with your assessment on gold, but the stock market has recovered from the dot.com meltdown." I understand your point Blade. But consider the following. Nasdaq as an index is still way underwater after five years; at about half of it's former high. That's clearly not a recovery. The Dow as an index has done better but still not back even after five years and with historically unprecedented extremely low interest rates to greatly assist it's rebound. Still, it is not back after five years. Many Americans were fully invested or nearly so at the top levels so they took a full hit from the meltdown

More telling than the indexes is in the many individual issues which fared even worse. Some of these are at fractions of their nearly five year ago prices and many of these were HIGHLY owned stocks by many many Americans. For example; Intel five years ago was at around 70 with today's close around 26.16, Microsoft five years ago was around 60 with today's close around 27.91, Texas Instruments five years ago around 78 with today's close around 32.55, General Motors five years ago around 75 with today's close around 23.27, etc. I could go on and on with similar outrageous examples; but Wall Street will never point this out to the average American. Many other former highly owned issues are not even around anymore! - or they are trading at "twos and threes." Remember highly owned Lucent? Many Americans owned Lucent at around 70 and today five years later it closed at around 2.90. This is a recovery? GOD help us if this is a recovery.

Where the markets will go only GOD knows. Thankfully, mankind has not been given the right or ability to know the future. However, man has been given the gift to look to the past to try and learn from past mistakes. The prudent man looks with honesty and open eyes. In this case, the honesty is plainly in the numbers. In the meantime, the Ivy League Wall Streeters were saying to buy stock when nasdaq was at 5000 (five years later it's around 2300) and just a few years ago they said that gold was a relic when it was at 275 (now it's pushing 500). Thanks Blade. matteproof

matteproof

Hi RYK. Thanks for the response. You said; "The stats you quoted in reference to the recent performance of gold and the 5 year performance of the major stock indices are irrefutable. I am very comfortable with my position in both asset classes and do not intend to change, nor do I care to convince anyone else that my position is correct..." I hear you. It's just that the stock market has not done well at all for millions of Americans who truly got burned. There are plenty of 70 year old guys still working and nightshifting because of it. In the meantime, the Wall Streeters keeping giving themselves bonuses. Thanks RYK. matteproof

RedneckHB

Matteproof,

The Ivy League Wallstreeters have been saying to buy the Nasdaq at 500, 1000, 2000, 4000, 5000, 4000, 3000, 2000, 1000, 2000. In other words they always say BUY.

Whenever you compare something with its high you are inherently saying that it is presently lower. Therefore returns will, of course, appear bad.

Gold started to move in 2001 from 250 to 500, Up 100% Gold was also $800 in

The Nasdaq bottomed in 2002 at 1100. Now it is 2200 or up 100% So you could say the Nasdaq has outperformed gold since it doubled in less time.

It is very easy to manipulate numbers to prove a point. Our politicians are expert in this regard.

matteproof

Hi cohodk. Thank you for your comments. You said; "Whenever you compare something with its high you are inherently saying that it is presently lower..."

This is a valid point. However, you must remember that the role of an investment is that it is supposed to grow over five years, not decline by half or more. Nasdaq (for example) has not only NOT grown over five years, but it has declined and declined dramatically over that period (in a prior post I gave a few examples of some individual heavily owned popular stocks that suffered similar profound losses during that time frame as well).

You said; "The Nasdaq bottomed in 2002 at 1100. Now it is 2200 or up 100%..."

For those who were invested in the year 2000 and stayed in, it would mean the following: nasdaq 5000 to nasdaq 1100 to nasdaq 2200 which equals more than a 50% loss after five years! Many individual stocks fared far worse! That is hardly a "recovery" for the millions of Americans who have been creamed.

Recall that millions and millions of Americans were invested in stocks and mutual funds in the year 2000 and these are the same millions that have not even recovered, let alone gained, after five years. There are far fewer Americans who entered at the 2002 bottom that you referenced then those who were in at the 2005 top. It is a dramatic difference in public participation at those two time periods. Furthermore, the nasdaq has been channeling at around the 2000 level now for years (since about the end of 2003). So, the only true big "jump" that occurred was that brief period from the very oversold 1100 level (2002 bottom to around the end of 2003) and that jump itself was made possible by the grossly oversold conditions that existed immediately after the 9/11 tragedy. Since then, nearly THREE YEARS after that move up, the nasdaq is still floating around the same 2000 area level and nowhere near the nasdaq 5000 recovery point.

Lastly, it is a fact that millions of Americans were in the market at unprecedented levels in year 2000 and THEY are the ones who took the full brunt of the Wall Street hit. Wall Streeters still get their bonuses and grossly overpaid salaries despite the economic carnage inflicted upon millions of Americans. Few people like to talk about that now but many many Americans got creamed and many of them were at their retirement age when it happened. Five years later and they remain creamed, still underwater, still owning Lucent now at $2.90 what was then Lucent at 70. Some of them are probably eating cat food today. Wall Street told them to "buy buy buy" when the nasdaq was at 5000 (and when Lucent was 70). Now, five years later, nasdaq is at around 2300 - about half of what it was. Back then, that same Wall Street crowd shouted "Dow 20,000" is next. Now, five years later, the dow is at around 10,000 plus. Gold, we were told at 275 was going lower and that only dinosaurs and old men invested in it. Today, gold is pushing 500. These are the numbers that just can't be wished away. Thank you again for your thoughts cohodk. matteproof

mrearlygold

Lots of new people have been looking at coins as a diversification.

I'd like to see the book though. I think I have an ad in it.

goldisgood

What's the title of his new book and where can I get it?