Gold: A Sucker's Paradise
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"The Great Gold Crash of 2013 is one of this year's biggest investment themes the gold experts never saw coming. And most of them, after being completely blindsided, are still in complete denial."
I'm sure that article will get a lot of response from our in-house PM gurus. The truth hurts.
Sucker's Paradise
I'm sure that article will get a lot of response from our in-house PM gurus. The truth hurts.
Sucker's Paradise
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
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Down 31% since 2011 highs? Ummm.... ok.
Precious metals are in a severe technical downtrend? Ummm... ok.
I don't consider this to have been a Great Gold Crash. The price goes up... and it goes down. I can truthfully say that I have lost much more in the stock market swings and dumps than I have lost in gold, FWIW.
Place your bets as you see fit.
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Liberty: Parent of Science & Industry
Charles III Album
Charles III Portrait Set
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-Regards CAPTAIN OBVIOUS
Loves me some shiny!
Knowledge is the enemy of fear
<< <i>Looking ahead, our examination of precious metals points to a very high profit opportunity for investors and traders who are 1) on the right side of the market, and 2) who are correctly positioned in the right investments.
-Regards CAPTAIN OBVIOUS >>
Yeah, like leveraged reverse index PM ETFs!
<< <i>over 60% of the reserve assets of the US government, Germany, France, and many other countries are held in gold. Link. If it's good enough for the world's central bankers, it's probably good enough for the rest of us, fluctuations in dollar price notwithstanding. >>
Great logic, to compare one's personal accounts to the central banks of the world's leading countries. Probably we should raise our own armies, levy taxes on our subjects, regulate infrastructure and commerce. Actually maybe that stuff is best left to governments and only a select few cu forum posters.
Liberty: Parent of Science & Industry
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Great logic, to compare one's personal accounts to the central banks of the world's leading countries. >>
Central bankers are widely regarded as (evil?) geniuses. But I guess when it comes to actually holding tons and tons of gold, they're actually suckers.
Groucho Marx
<< <i>Gold is terrible investment, yet over 60% of the reserve assets of the US government, Germany, France, and many other countries are held in gold. Link. If it's good enough for the world's central bankers, it's probably good enough for the rest of us, fluctuations in dollar price notwithstanding. >>
The US Govt owns about 25% of all the land in the USA. I think thats just a tad more important than a few truckloads of shiny yellow metal.
Knowledge is the enemy of fear
<< <i>PM investors haven't lost anything because they haven't sold. >>
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<< <i>PM investors haven't lost anything because they haven't sold. >>
Really?
Only if you haven't sold anything from purchases made within the last 3 years.
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<< <i>
<< <i>PM investors haven't lost anything because they haven't sold. >>
Really?
Only if you haven't sold anything from purchases made within the last 3 years. >>
You know I was being facetious when I wrote that. I think I written 100x my thoughts on that ideology. PM investors have not only lost but have lost bugtime as fear has kept them from alternative investments such as equities, real estate bonds and even bank savings accounts.
Knowledge is the enemy of fear
<< <i>
<< <i>
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<< <i>PM investors haven't lost anything because they haven't sold. >>
Really?
Only if you haven't sold anything from purchases made within the last 3 years. >>
You know I was being facetious when I wrote that. I think I written 100x my thoughts on that ideology. PM investors have not only lost but have lost bugtime as fear has kept them from alternative investments such as equities, real estate bonds and even bank savings accounts. >>
Your thinking is correct for everyday investors but some of us just bought PM's to hold for 10 plus years.
Successful card BST transactions with cbcnow, brogurt, gstarling, Bravesfan 007, and rajah 424.
<< <i>PM investors haven't lost anything because they haven't sold. >>
no more than homeowners who haven't sold. A loss in one's equity in any asset is meaningless (except when used for collateral) until that equity is converted to dollars. At that time equity value becomes important. Until then, it's just a number on a spreadsheet that reflects the "if I cashed in today."
PM investors HAVE lost the edge gained through trading in gold - buy the lows and selling the highs - by sitting on the stack. Not being one able to time highs and lows until after they have passed, I like sitting on the physical stack and trading the paper stack.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
But for someone to say that they're glad they were heavily invested in gold the past 2 years and wouldn't change a thing if they could go back and do it again, are some combination of 1. bad at math, 2. have an emotional attachment to the gold that overrides return on investment, or 3. are in a state of delusion/denial (these last are in the camp that insists that the gold bull market is still intact and that "the market" for gold is wrong and they are right.
Knowing what we know now, we all should have sold every bit of our gold at the peak, and if we love it so much (as we do) then we could have bought it back much cheaper now, and either have the same amount of gold as before and a large cash profit, or an even larger amount of gold.
Even if "we're in it for the long term", we should be honest with ourselves about relative performance and the concept of opportunity cost.
Liberty: Parent of Science & Industry
DUST managed to make an all time low in Sept/Oct 2012, erasing ALL the gains from Oct 2011-July2012. How does a gold bear ETF lose everything as gold drops hundreds of dollars? Quite simple....horrible decay.
By all means though buy DUST with the HUI/Gold and HUI/SPY at 5 to 10 year lows. Makes sense to me.
For his information the theme for the past 2-1/2 years has been the rise of the USD/YEN. Gold was collateral damage. The real theme was in currency shifts over the past 1-2 years.
It didn't hurt that the FED has supported the stock market since mid-2011 and has refused to let fall....supporting it at every juncture needed. A guaranteed $85 BILL/month into equities can do some damage.
It was a stroke of genius for the big banks and hedge funds to create all this easy ETF's. Now rather than having to manipulate an entire market, these guys can do it with a much more focused ETF. It's sort of like
dropping the first bomb right down the smoke stack rather than having to deal with the outer structure first. Pure genius. And GLD was used as such a weapon whether the inventory was actually all there or not.
Cohodk mentioned this a couple years ago that the sizable inventory could be strategically used on a sell-off.
The fact that the author is playing in the ETF's sort of suggests he's a sucker as well. What I'd really like to see is this guy's track record on gold (GLD) from 2004-2011. Now that would be instructive.
Even if "we're in it for the long term", we should be honest with ourselves about relative performance and the concept of opportunity cost.
Yes, let's be honest. That requires that we acknowledge that we don't in fact know in advance where the peaks and valleys are going to be. Making assumptions about opportunity cost and relative performance implies that you have control over or pre-knowledge about future events and are only required to choose between two alternative valuations, based on past and present performance or trends. Unfortunately, not many people have that pre-knowledge, and saying that you could have sold it then in order to buy it back cheaper now isn't a good argument for opportunity cost.
There's much more to it than that, as we also know. In a simpler world, past and present performance or past and present trends would normally have predicted rising gold prices in response to $85 Billion/month in new money creation. The fact that this isn't occurring means that other variables are also at work. Until we identify the other variables and analyze these new twists in the market, we won't have good predictability.
If we're truly in it for the long term, we look at the fundamentals that we know from history and from experience which factors will influence the markets - instead of reacting to the media hype that's designed to stampede the herd into stocks as they continue to make new all-time highs without any drivers other than expanding PE ratios derived mainly from Fed injections .
Every fiat scheme in history has collapsed due to overspending and corruption. The signposts are well documented. Economic laws don't change, and neither does the math. The politicians are engaged in a fraud designed to present a failing economy as if it were vibrant and growing. Why else would they be deficit spending AND printing money faster than the the economy can generate it? Why else would there be such growth in SNAP and such decreases in labor participation, with unemployment at 7.3%?
"Something's not right", and everybody knows it. Got gold?
I knew it would happen.
What if the Yen continues to drop vs the dollar?
Jmski, you are right. But this could continue for much longer than we will live.
Knowledge is the enemy of fear
<< <i>For his information the theme for the past 2-1/2 years has been the rise of the USD/YEN. Gold was collateral damage
What if the Yen continues to drop vs the dollar? ...... >>
And what if it doesn't?
Even if the Yen continues to rise against the dollar there's no guarantee the same trend in gold that occurred from Aug 2011 - Nov 2013 continues. It's been a 2-4 years commodity bear cycle.
It is quite long in the tooth.
Which is why I'll continue to look for a sign of either a collapse or a turnaround. In the meantime, precious metals are for savings, Vegas and Wall Street are for gambling. When I want some recreational gambling, it will be in Vegas. When I want some convenient gambling, it will be Wall Street.
It's taken about 69 years for the US to rescue the world, establish a new world order, learn to abuse it and then have the other countries collectively realize that it ain't what it was cracked-up to be. We're now in the "OMG. let's DO SOMETHING about it now" phase. The cat's out of the bag and even if the US started to set a good example at this moment, I think that it would take a decade or two before the current damage could be undone. In the meantime, we're at risk especially because the damage is still occurring.
I knew it would happen.
<< <i>
<< <i>over 60% of the reserve assets of the US government, Germany, France, and many other countries are held in gold. Link. If it's good enough for the world's central bankers, it's probably good enough for the rest of us, fluctuations in dollar price notwithstanding. >>
Great logic, to compare one's personal accounts to the central banks of the world's leading countries. Probably we should raise our own armies, levy taxes on our subjects, regulate infrastructure and commerce. Actually maybe that stuff is best left to governments and only a select few cu forum posters.
I've always thought and treated my doings as one of a select few... that's whats got me were I am..... comfortable!
<< <i>For his information the theme for the past 2-1/2 years has been the rise of the USD/YEN. Gold was collateral damage
What if the Yen continues to drop vs the dollar?
Jmski, you are right. But this could continue for much longer than we will live. >>
And FWIW I don't know anyone that thinks the USD/JPY doesn't continue to breakout sharply for months. There you have it 100% agreement in the market....a sure thing.
Here is an article looking at 25 yr Nikkei and USD/JPY charts....not just 6 to 18 months. Read all the way to the bottom.
Knowledge is the enemy of fear
If my gold goes way up, the rest of my money has probably lost lots. If gold tanks, my investments will probably have done well.
It's a hedge for me, nothing more.
Conventional Approach (i.e., described by 500Bay, above) - hedge all of your assets against each other, such that when one of them takes a dive, one of the others gains enough to offset the gain. This approach does reduce the beta of the portfolio. You do have to be successful in making the right choices.
Baley's Portfolio Rebalancing Approach - another conventional method of attempting to optimize gains by selling some portion of assets that have risen in price while buying assets that have dropped in price at regular intervals, keeping some of the relative percentages of each asset class somewhat constant over time. This approach makes some assumptions that once an asset has gained substantially, there is less room for further gains, and also that asset classes tend to fluctuate back & forth over time, making it possible to play these cyclical fluctuations.
jmski's I Know What I'm Doing Approach - I take a long view of precious metals price fluctuations and cost-average both in and out. I tax-manage my sales to limit my tax gains and keep the good stuff back for later consideration. I consider that the risk of price fluctuations is dispersed over time and that the true value of metal is realized in the average value, not the momentary price. This view also heavily takes into account that the fiat currency is not what I want, and may well not be what anyone wants before it's all over.
Corollary - Stock ownership - well, that's all nice and good, but the system isn't at all fair to individual investors now and if you play that game, you might as well play the slots because the odds are probably better. Sure, you might take some heat when the Fed is pumping up the market and everyone is all hot'n heavy about stocks (while you are in metals), but that isn't going to last and many will be burned. It's just a mathematical certainty that the govmint is making a big mess of our finances, no doubt about it - and I refuse to play the patsy. In the meantime, I really don't mind people making some fiat gains. It's their risk, not mine.
My approach requires that once you begin, you don't sweat it. It also helps to be somewhat correct in your analysis when you begin, when you buy, and when you sell. But consistency is even more important.
I knew it would happen.
driven by speculation. Then the hot money got out and probably into stocks.
Now it is AMZN, NFLX, etc that is driven by speculation. Add the recently public
TWTR to that list.
Enjoy the party but keep an eye on the exits.
Gold in a clear downtrend now. At some point it will be good for accumulation,
but probably not here.
Respecting gold, silver, & platinum there's two ways of owning precious metals - short term and long term. I'm not a short timer. There is a difference.
I knew it would happen.
<< <i>"The Great Gold Crash of 2013 is one of this year's biggest investment themes the gold experts never saw coming. And most of them, after being completely blindsided, are still in complete denial."
I'm sure that article will get a lot of response from our in-house PM gurus. The truth hurts.
Sucker's Paradise >>
Taking this guy's "suckers" advice over the weekend (sell NUGT - buy DUST) and you'd now be nicely underwater on your DUST position (ie short gold and miners).
How come these guys tend to show up at monthly precious metals' cycle bottoms?
Gold in a clear downtrend now. At some point it will be good for accumulation, but probably not here.
You really think gold's in a downtrend after it dropped from $1923 to $1180 in 21 months? What gave it away? I'm with Jon Nadler and waiting for $650 to give way to signal a new secular bear market.