Anybody see Dave Ramsey's live broadcast last night? (gold related)
guitarwes
Posts: 9,237 ✭✭✭
He said not to buy gold, that it was at a hundred and seventy-something year high, and that it's a lousy trading material in the case the economy went completely under. I understand all his points and pretty much agree with him. One good point he made, in the case of a disaster like hurricane Katrina, would you want a sack of gold or a jug of water if it really came down to surviving?
@ Elite CNC Routing & Woodworks on Facebook. Check out my work.
Too many positive BST transactions with too many members to list.
Too many positive BST transactions with too many members to list.
0
Comments
I know Ramsey stresses the fact of being debt free and having a emergency fund. I don't see why he would be against the person who is debt free with disposable income to buy a small percentage of gold to put away for an emergency fund? Gold is not for everyone but do think its wise to own some in todays world if you can afford it regardless of spot price. The comment on the disaster scenerio he always makes, seems to be a redundant point in regards of being able to afford gold.
Dave Ramsey, Don Hays, and Larry Kudlowe are incorrigible perm-bulls with respect to stocks and nothing will ever change that. Did any of these guys suggest getting out of stocks in 2007-2008? In 1999-2000? Did they protect their investors or customers who relied on their advice or just let them ride the market all the way down to 6600? So I'm going to take gold advice from guys like this who are always anti-gold, pro-stocks? Gold has outperformed the Dow/S&P by multiples over the past 10 years. It's not even a horse race. And of course those guys missed the run-up in gold and probably commodites as well. Even though the Dow did kick in a new numerical high in October 2007 at 14,100, when adjusted for the USDollar/inflation decline from 2001, that actually didn't even exceed the highs from 7 years earlier at just over 12,000. It was all just smoke and mirrors.
You can go back to the first 5 to 15 pages of the main gold & economic thread back in 2004 to 2005 to see the commentary of Hays and Ramsey. A few pro-stock forumites back then swore by those guys. I wonder if today those same guys are swearing at them. Back in 2004 Hays and Ramsey couldn't have been more wrong about where gold was headed and yet we are supposed to listen to their advice on the next major wave still to come? Wrong in 2004, wrong in 2009. Talk about a great contrarian indicator! Anyone who completely dispels a major asset class from consideration regardless of the time frame or market condition is not someone you should be listening to. Such a person should not even call themselves a financial advisor.
roadrunner
<< <i>I'll take the sack of gold, and would have no problem buying water, gas, food, ammo, and whatever else I needed. >>
Why would anyone give you THEIR water for something you can't eat or drink if there's none else to be had?
<< <i>Dave Ramsey, Don Hays, and Larry Kudlowe are incorrigible perm-bulls with respect to stocks and nothing will ever change that. Did any of these guys suggest getting out of stocks in 2007-2008? In 1999-2000? Did they protect their investors or customers who relied on their advice or just let them ride the market all the way down to 6600? >>
No, just like a bunch of other financial advisors, the long term is what they talk and is what has proven itself. Mutual funds are his biggie AFTER you get debt free to start building wealth.
<< <i>You can go back to the first 5 to 15 pages of the main gold & economic thread back in 2004 to 2005 to see the commentary of Hays and Ramsey. A few pro-stock forumites back then swore by those guys. I wonder if today those same guys are swearing at them. Back in 2004 Hays and Ramsey couldn't have been more wrong about where gold was headed and yet we are supposed to listen to their advice on the next major wave still to come? Wrong in 2004, wrong in 2009. Talk about a great contrarian indicator! Anyone who completely dispels a major asset class from consideration regardless of the time frame or market condition is not someone you should be listening to. Such a person should not even call themselves a financial advisor. >>
Dave Ramsey has probably helped and encouraged more people to break free from the bondages of debt and destruction than you would care to count. Not a great Financial Advisor you say? Well what is he? Have you ever read his books?
Too many positive BST transactions with too many members to list.
If you're now morphing into the Mad Max or Water World scenarios when the supplies are very limited following nuclear fallout then holding on to all your water and food is a good thing. If you're planning for all out nuclear war then sell your stocks and bonds, all your non-essential possessions, and get to building that bomb shelter and safe haven out in the woods. If that is not the scenario that you expect in the years to come, then gold will more than suffice to be able to trade for quanities of water, food, supplies as one needs....as it has done for thousands of years. You can't eat or drink your paper money, your stocks, your car, your home or lot, your oil or gas either.....so why do you single out gold which happens to be one of the world's universal currencies?
No, just like a bunch of other financial advisors, the long term is what they talk and is what has proven itself. Mutual funds are his biggie AFTER you get debt free to start building wealth.
What's long term? 20-30 years? 50 years? Many of us on the forum may not be alive in 10-20 years. Do we still invest for 30 years? Who can afford to invest in stocks for the "long term" when you're retiring in the middle of a 20-25 down cycle in stocks (ie like from 1929-1949 or 1966-1982 and now from 2000-20xx). Is there even anything called investing anymore when traders, banks, institutions, and hedge funds play the market like a giant casino.....with your money. Your top advisors have "proven" themselves over a very specific period of US history whose like will probably never be seen again (ie 1982-2000 or possibly 1982-2007). During this period credit and debt ruled the day as did increasing money supplies at rates well beyond consumption and growth. I think we can safely say that this 25 year old tune is now broken after the banks have lead the way in bankrupting and destroying our financial system. You can be sure that what drove the Ramsey and Hays' stock boom won't be the driving force for the next 20 year boom. Let's finish out this bust first before we start talking about long term investments and track records. We just may find that stocks will revert back to 1980's pricing once bogus inflation results have been taken out. I would not be surprised if gold turned out to be a better investment than stocks when looking at the 30+ yr period of 1980-2012. That would no doubt shatter the very foundation of professional stock advisors who counted on 1982-2007 going on forever. Then again, that just may happen if we get high rates of inflation. But at 30,000 Dow you'll be paying $12 for a gallon of milk.
Dave Ramsey has probably helped and encouraged more people to break free from the bondages of debt and destruction than you would care to count. Not a great Financial Advisor you say? Well what is he? Have you ever read his books?
I'm sure Ramsey has helped many people who were considerably lacking in financial knowledge such as keeping a simple budget, investing for the future, and saving money, etc. This stuff is not taught in our schools and should be. Considering that our society has pushed the envelope in spending money we don't have (ie credit) it's a miracle that a Ramsey can find anyone to listen to his sound financial principles. But there's no way he could be a "great" financial advisor if he dismissed gold in 2004 and went all in for stocks. Why would I bother to read the book by a man who was proven dead wrong on his predictions in 2004? How many more 50% haircuts do we allow a Dave Ramsey to tout before we look for another advisor? Ramsey was so worried about growing one's wealth over the past 10 years that he forgot about the #1 goal: to first ensure that you hang on to what you have. That's right Dave, home prices, stocks, and bonds can actually fall in value....and to levels not seen in a decade or more. Even though the 1966-1982 stock market never really crashed, it lost more than half of its purchasing power to inflation. How did Ramsey protect his clients from a dollar that lost 40% of its value from 2001 to early 2008? US Stocks certainly didn't do it as they are denominated in the USDollar.
99% of Americans don't understand gold and perceive it as an archaic relic with no usefullness to 21st century society. That view was probably hard to dispel from 1980-2002 because it was basically true, commodities were essentially dead. But it takes many years to recreate a commodities bull. But I think the nail was driven home about physical gold in 2008-2009. The proof is in the pudding regardless of how many people Dave has "saved." PM's have kicked the crap out of the stock market since 2000. Gold has more than tripled and stocks off some 40% (about a 5-1 ratio). Not much more you can say than that. It is what it is. I wonder what Dave Ramsey would have said to his clients in 1966 about staying invested in the market for the long term while inflation took a 70% bite out of a flat market over the next 16 years? Hey, you gotta be in it to win it.....just like the state lotteries!
He said not to buy gold, that it was at a hundred and seventy-something year high .
I wonder if Ramsey was quick to make that same point when stocks hit 12,000 in 2000 and then 14,000 in 2007 (ie 175 year highs). I'm sure he was pushing stocks to his clients last time the Dow was at 13,000-14,000. During Katrina, were people able to sell their stocks and bonds for food and water? Not likely Dave. Gold is a hedge for loss of confidence in the govt and for when they get too far off the track. It's not meant as a cure-all for armageddon where stocks, bonds, and currency won't be of any use either. In that situation I'd take gold over those 3 items though food/water, shelter, and ammo would be the highest priorities.
roadrunner
<< <i>I've seen him say that a few times now. I do not watch the show very often but it seems like the callers are mostly low income families with alot of debt. I would not suggest gold either at any amount.
I know Ramsey stresses the fact of being debt free and having a emergency fund. I don't see why he would be against the person who is debt free with disposable income to buy a small percentage of gold to put away for an emergency fund? Gold is not for everyone but do think its wise to own some in todays world if you can afford it regardless of spot price. The comment on the disaster scenerio he always makes, seems to be a redundant point in regards of being able to afford gold. >>
That's an excellent point--I forgot about Ramsey's primary TV audience. I will agree then. For folks with negative or very little net worth, gold is a silly idea. A person that is buying gold on credit card money is beyond stupid.
That said, for folks with significant net worth, a little gold is a small and cheap insurance policy against unlikely, but still plausible economic scenarios. Mutual funds? Put the average annual fee for a mutual fund into gold for a couple of years and that is the gold insurance policy (average fees are 1.1% annually for typical managed stock funds that are not index funds). I'll say it again, folks with significant money are fools if they go without insurance. Gold is a form of insurance.
<< <i>He said not to buy gold, that it was at a hundred and seventy-something year high, and that it's a lousy trading material in the case the economy went completely under. I understand all his points and pretty much agree with him. One good point he made, in the case of a disaster like hurricane Katrina, would you want a sack of gold or a jug of water if it really came down to surviving? >>
Big deal. Your jug of water lasts a day, then you are screwed. The guy with the gold can buy all the water he wants. What if you have to move? Water is extremely heavy, you can only carry a small amount but you can take all your gold.
<< <i>99% of Americans don't understand gold and perceive it as an archaic relic with no usefullness to 21st century society. That view was probably hard to dispel from 1980-2002. But I think the nail was driven home in 2008-2009. The proof is in the pudding regardless of how many people he has "saved." >>
It's that fact that will ultimately propel gold to unimaginable heights. As the world economy continues to deteriorate, more and more of the domestic and international public will come to understand gold differently and possible seek to acquire it. Imagine how quickly the demand and price for gold will increase when this ratio shifts from 1% to 5%, then 10%, then 15%...
People fail to understand that in a "mass chaos" scenario, there will be people with plenty of basic resources that will barter for other things. But do you think they guy with a huge tank of gasoline will trade for stocks or FRNs? How much food and water does that guy need and will he be willing to trade for? If I were that guy, I'd trade it for gold which can then be stored and then traded for whatever I might need in the future.
But I believe Dave is remarkably wrong when he blindly advises buying stocks and tells people the market will go up.
I do have to wonder... how many years can the market stink it up, before he admits he was wrong. I asked this once to Dollardude, and if I recall correctly he said "10 years." Most people cannot afford to donate 10 years to faulty investment logic.
That other guy Ray Lucia is, I think, worse because he projects market returns and then tells people how much they can go ahead and spend today.
"One good point he made, in the case of a disaster like hurricane Katrina, would you want a sack of gold or a jug of water if it really came down to surviving?"
Great point. And I'd respond that on 9/12/01, his stocks were $0.
You should read it because then you would better know his perspective. His main mission is to teach sound financial principals, and he does that very well. How can you argue with avoiding consumer debt, saving an emergency fund, and paying off your mortgage? I've never heard him suggest going "all in" to anything. He suggests systematically investing in mutual funds over time. He advises against buying gold because 1) the market is fraught with scamsters mass marketing it to people who have no business buying it and 2) it HAS underperformed equities long term. I won't play the game of choosing a time horizon, but it's less than 50 years and more than the last few that commodities have run. I will say that he skews aggressive in his equity investing, and I personally don't think there's anything wrong with owning pm's as part of a portfolio. But you shouldn't throw out the baby with the bathwater, because he has helped many people get their lives under control.
Why couldn't D.R. provide answers for people on how to purchase gold w/o being scammed? Why not suggest on-line brokers like Ampex or Tulving? He could provide the the range of premiums that you should pay for items or link to a site that could do that. You mean there's not one single honest metals dealer in the nation that he could recommend or would do business with? Equities have underperformed commodities (and gold) for periods of up to 10-15 years (it took 25 yrs after the 1929 crash to recover those stock highs, and that's not taking into account inflation). I think that's a long enough horizon to consider some exposure for one's clients.
Let's not also forget that our credit economy has been built with a strong foundation of investing in 401K's and IRA's over the past 20 years. These didn't hardly exist in any quantity prior to that. Toss in hedge funds, otc derivatives, and other catch of the day items and it's pretty clear that what we've created over the past 25 years was pretty unique. It really can't be trended prior to 1982. This is the fish bowl that D.R. thrived in. What this will look like 5-10 yrs from now is anyone's guess. D.R. also doesn't factor in that we've only been in a fiat world for 38 years. That's not a lot of history...and it's certainly not 50, nor 100, nor 175 years of it. I wouldn't even call it long term yet as we haven't even had a full 2nd "fiat-free" cycle similar to 1966-1982. We had one single and complete commodity cycle so far on fiat. This time around we have numerous and potentially catastrophic "add-ons" that were of no significance in that earlier era (all major banks insolvent, all major car companies insolvent, a housing sector in shambles, a fully depleted consumer, a large % of mfg and service centers now overseas, an older infrastructure, etc.). Maybe it's just me but it doesn't seem like the time to be betting the farm on equities.
Even with Dave Ramsey preaching the "low debt" philosophy, it's apparent that most of America and Wall Street didn't listen. Still, those that did heed the warning are paying more heavily for the sins of those who didn't (ie savers being hurt more than borrowers). It was apparent to me in 1997 that all the baby boomers couldn't retire on their 401K's (ie continued high stock & bond prices). But I never would have dreamed the party would go on through 2007.
JPM chart analysis - by Brian Bloom