<< <i>I couldn't blame him after what the government is putting Joan Langbord through for a measly ten ounces. >>
If the government had allowed the Langbords to sell those coins in 50-50 auction as it did with the legal 1933 double eagle, there would have been an immediate revenue source for "the people" and on going tax stream when the coins were sold in the future. Now they conserved "for the people" as the mint web site says. What a crock! Most of the people don't care, and in reality those coins belong to no one, certainly not "the people."
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
<< <i>This guy gets more respect than he deserves in my opinion. He talks about productivity making wealth be he throws his political support to a party that believes in punishing productivity and says to those who produce "you did not build that". He probably owes much of he success to those working for him who are way smarter. My take on articles like this is that someone shorted gold and are trying to take advantage of its recent weakness by rolling out the old showboat to drive it down more. >>
And which party would that be? The one that fights against single payer health care and increased minimum wage for hard working americans that are the base of our economy and productivity? Do tell?
Best, SH >>
Ah... ok then. Let's look at all the government success stories.
The Great Society (war on poverty). Check. The War on Drugs.... Roger that. Social Security.... Happy days are here again. US Postal Service.... one big happy family. Veterans Service.... Well taken care of for sure.
With the track record of our government with major programs, I expect the same amount of success for the ACA (even more so if we go to a single payer system). But hey, maybe it really will work out.
Uhh... Capital gains rates and all the other special rates that "money guys" pay are loopholes. What makes their jobs deserve a federal tax rate that is the same as someone earning $9,000 to $37,000 per year? Yes it's legal (because they can afford the lobbyists and political contributions to pass favorable tax laws) but that doesn't make it fair. Yes when this country has to cut back on research and repairing/expanding infrastructure, it would make my life better if everyone paid their fair share. Most of the states that have increased their minimum wages have actually seen a boost to their economies.
<< <i> ... it would make my life better if everyone paid their fair share. >>
Please define "FAIR SHARE" and be specific.
Almost 50% of the population pay no FEDERAL INCOME TAXES.
By the way, investment income is taxed at a lower rate because the income it was derived from was already taxed at the federal rate. I love how responsible people who actually save their money and don't squander it are always required to pay for the irresponsible (I am NOT including those who ACTUALLY require real assistance.)
<< <i> ... it would make my life better if everyone paid their fair share. >>
Please define "FAIR SHARE" and be specific.
Almost 50% of the population pay no FEDERAL INCOME TAXES.
By the way, investment income is taxed at a lower rate because the income it was derived from was already taxed at the federal rate. I love how responsible people who actually save their money and don't squander it are always required to pay for the irresponsible (I am NOT including those who ACTUALLY require real assistance.) >>
A little off but I try to minimize my tax bill to the feds, I do not go crazy on deductions. I am more concerned on the local level where they hit me harder. If the government collected twice as much income tax next year as last year I do not see any improvements being made.
I look at gold as a place to park money for a while, fairly easy to sell. If the cash is in the bank it is fair game for my wife to park the money in what she thinks is a good place.
Mark NGC registry V-Nickel proof #6!!!! working on proof shield nickels # 8 with a bullet!!!!
<< <i> Like him or not, Buffet's comment about gold's virtual complete lack of productivity can't be argued by anyone with even a modicum of intelligence. It's value only lies in being the oldest FIAT currency. That is it. It has virtually ZERO "productive" value, unlike stocks or land. >>
Of course gold is fiat currency and of course buffet is right that it's insane to dig gold out of the ground and bury it back in the ground. He's also right that the road to riches has always been through commercial, industrial, or investment avenues.
But none of these facts change the reality that humans individually and col- lectively are prone to excesses which result in various forms of collapse. Ev- erything is cyclical and it has never been smart to be on the wrong end of a cycle. Buffet's old enough it might not be much of a concern for him but peo- ple who might need to survive the next cycle should own some gold. The Boy Scout motto is "be prepared" and when a portfolio drops to nothing everybody needs to be prepared. This doesn't mean fill your basement with food that'll need to be thrown away in ten years or to get survivalist training but it does mean common sense precautions to take care of yourself and yours for a per- iod of time in case of any type of catastrophy. For investors gold still plays a key role in just this.
Fair share could be established by setting a reasonable cap on capital gains ( say 75 or 100K) so that the 98% of Americans that have already paid federal taxes on their income are encouraged to make investments and encourage savings. After 75 or 100 K of capital gains you go to the regular brackets. It's funny that a money guy like Buffet states that the system is skewed to favor the super wealthy and should be fixed , yet many people that would benefit from his tax reform proposals attack him. Why are capital gains on our coin investments so much higher than stocks? We already paid federal taxes on the cash we used to purchase the coins? Google why 50% pay no federal taxes and you'll see why - basically you can't get blood from a turnip. By the way I have a small business, employ 25 people , and work my ass off. Other than a few high school kids that start at minimum wage, I start my unskilled employees at $9/hr and after 90 days pay 100% of their health insurance. Google any article that has looked at the facts about the economy in states that pay more than the federal minimum wage, you'll see that those states are doing well. Yes the conservatives argue against raising the minimum wage and progressives for raising it, but so far it looks like the facts are supporting the progressive's theories.
RE: Sounds pretty exclusive to me. And I guess you are correct that anyone can own a share. But currently one share of Berkshire Hathaway Class A common stock is $212,000. Not exactly a stock for the common man. There is a Class B stock that is priced at about $140 but that is a tracking stock without full voting rights (1/10,000 of a share). I guess many people own shares of the A stock but at $212,000 per share there is little to no shares held in mutual funds, pensions or 401 (k) accounts. Just thought I would throw a few facts into the discussion.
coinhack, get your facts straight. Little to no shares in mutual funds, pensions or 401(k)s. Are you serious? BRK is in every large cap index fund/etf going.
> There are hundreds of institutional shareholders representing "thousands" of regular people, like Cal Pers (Calif Public Employees Retirement System), FMR (Fidelity), Capital World (American Fds et al), Davis, Bank of NY, State Farm, Tweedy Browne, Invesco, Wells Fargo, State Street, US Bancorp... > anyone buy class B shares, they're entitled to a portion of the same corporate assets as class A shares.
Google any article that has looked at the facts about the economy in states that pay more than the federal minimum wage, you'll see that those states are doing well. Yes the conservatives argue against raising the minimum wage and progressives for raising it, but so far it looks like the facts are supporting the progressive's theories. >>
Well there are lots of factors that make an economy, not just minimum wage but look at California with one of the highest mw at $9. I think they are somewhere around 7.4% unemployment compared to Texas with about 5%. Texas mw is $7.25. To me it just makes intuitive sense that companies with high low skilled labor needs will just eliminate jobs or hire illegals if they can and more and more teenagers who need a starter job to learn work skills will be stuck at home playing video games because the available jobs are very scarce.
Gold and silver are valuable but wisdom is priceless.
Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< <i>Buffett is a funny guy. Buy stocks which pay dividends? His own company, Berkshire Hathaway, hasn't paid a dividend since 1967! >>
Every company Berkshire has either bought outright or one they own stock in pays Berkshire "dividends". Buffet then uses that money to buy other assets. He could pay it out as a dividend to Berkshire shareholders but he believes he can do better with the money than his shareholders can themselves (a decision many companies make). He's right too....
<< <i>Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income. >>
With land you can grow crops or build buildings to eventually rent out. All of that equals dividends.
<< <i>With land you can grow crops or build buildings to eventually rent out. All of that equals dividends. jom >>
Have you ever farmed? Rented out a property? It takes a lot of human energy. Gold is a store of value that requires NO energy.
In principal Buffet's argument has merit, but gosh, people lose money buying stocks every day from so called "productive" companies. Stocks are speculative, moreso than gold, most do not pay dividends, and unlike gold, companies can go bust wiping out ALL value of their so-called "productive" capacity.
Lehman Brothers, Enron, Worldcom etc etc, were all productive companies too. Where is the shareholder's money now? Evaporated like dew before the hot summer sun that is where. Gold? It survives all human business foibles, cons, scams and schemes.
I am enjoying this thread. This is the kind of stuff we discuss on the Precious Metals forum every day It's good to see people getting worked up over here as well.
<< <i>RE: Sounds pretty exclusive to me. And I guess you are correct that anyone can own a share. But currently one share of Berkshire Hathaway Class A common stock is $212,000. Not exactly a stock for the common man. There is a Class B stock that is priced at about $140 but that is a tracking stock without full voting rights (1/10,000 of a share). I guess many people own shares of the A stock but at $212,000 per share there is little to no shares held in mutual funds, pensions or 401 (k) accounts. Just thought I would throw a few facts into the discussion.
coinhack, get your facts straight. Little to no shares in mutual funds, pensions or 401(k)s. Are you serious? BRK is in every large cap index fund/etf going.
> There are hundreds of institutional shareholders representing "thousands" of regular people, like Cal Pers (Calif Public Employees Retirement System), FMR (Fidelity), Capital World (American Fds et al), Davis, Bank of NY, State Farm, Tweedy Browne, Invesco, Wells Fargo, State Street, US Bancorp... > anyone buy class B shares, they're entitled to a portion of the same corporate assets as class A shares. >>
You are changing what I said to make your argument. I didn't say B-H was not held in pensions, 401 (k)s etc. I said Class A or the original common stock voting shares were not used. The trading volume for the Class A shares is around 300 shares a day. That is not going to work for a mutual fund.
Class B shares or the so-called tracking shares are held in pensions, funds, etc. They trade around 3 million shares or more a day.
Class B shares have virtually no voting rights and receive no dividends. They are a way to bet on the value of the Class A shares at an affordable price. $140 compared to $212,000. In the case of a dissolution of the company I don't believe the Class B shares would have the same rights to the corporate assets as the Class A shares. That's why they are Class B shares.
In any case, all I was commenting on was Bill Jones comment that Buffet had made money for "an exclusive group of people". I was just replying that a $212,000 a share stock was kinda exclusive.
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty.
This is a clear thought. However, I think our instinct toward gold is atavistic - based on its scarcity in a different time and not its current utility.
Developing theory is what we are meant to do as academic researchers and it sets us apart from practitioners and consultants. Gregor
He wishes he bought in 1999, and the same could be said (about productivity and procreation) for many, many other financial instruments he has purchased.
Hindsight is 20/20. All the negative publicity lately tell me that maybe it has made a bottom. Just like the time to sell was when everyone was calling for $2,000-$3,000 Gold.
MLAeBayNumismatics: "The greatest hobby in the world!"
<< <i> Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty. >>
Tell that to the governments of the world and their central banks. It's "fundamentals" are centuries and centuries of use and acceptance as a store of wealth.
I agree that productive companies represent the best investment ultimately. Hey, do you know anyone that owns German stock pre-WWII? I wonder if Gold was useful then? Gold was/is a store of value that could not be destroyed by government, war or human calamity.
(Wait, pointing in a different universe expecting the result to be the same as pointing in the real universe is unjustified. Cannot get reliable directions in alternate universes. I'll find it myself.)
<< <i>Buffett is a funny guy. Buy stocks which pay dividends? His own company, Berkshire Hathaway, hasn't paid a dividend since 1967!
Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income. >>
We're not talking about barren worthless land in the middle of nowhere. We're talking about land that can be put to productive use, either through farming, mining resources, commercial or residential income, etc. Bottom line is, land is required for all of those things. As for Berkshire not paying dividends, its a tax/capital appreciation strategy. No company should be paying dividends if they have better uses for that money. In the case of Berkshire, they believe they are looking out for their investors by utilizing those funds in other capital appreciation strategies. Considering their results, how can anyone argue with their strategy. >>
There are lots of companies [Apple being the biggest] who are cash rich and getting richer who/that haven't the slightest idea what to do with all of that cash. Warren's business model is a little more conducive to spending those dividends internally because buying 100 million shares CSX works for him. Apple OTOH apparently can't find anything to to spend $20 billion on that would be a good business fit.
<< <i>Mr. Buffet is still bitter that he sold his HUGE silver position at ~$4.50/oz. Just kidding about the bitter part. Not the price.
Gold has been good to me. >>
Nic, do you have a reference on that? As far as I knew he was buying his 120 MILL oz of silver in the mid to late 1990's when it was $4-$6/oz. Armstrong gives a lot of detail on when Buffet was buying. He sold off around early 2006 (so I've read) just as the SLV ETF was getting off the pad. His silver ounces may have been the key to supplying the SLV fund with an initial 50-100 MILL oz of silver that would have been readily available and not disrupted the market coming from a single private source. Silver was $8-$14 during the first half of 2006. Buffett had the right idea as he knew silver was going to be a long term winner once 2004 arrived. It was foolish of him to sell out by 2006 was the majority of the upside yet to come. I suspect he was "convinced" or "prompted" to sell by a much higher entity.
Just take a look at part of a speech Buffett gave at Harvard in 1998 when he said of gold:
"(It) gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
I always get a good laugh when I read the above because at that same time Buffett was sitting on 1/2 - 1 MILL oz of silver. And it gets dug out of the ground and guarded just like gold does....esp. when you own 1 MILL oz of it. Apparently, the Martians would be scratching their heads on Buffet's attempt to corner and drive up silver prices. I think he would have succeeded but for some reason was forced out of that position just before silver really took off from 2006-2008. I think he was made an offer he couldn't refuse by the big banks or US Govt.
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty.
This is incorrect on so many levels. Gold has numerous important uses which therefore make up its fundamental demand....of which jewelry is the largest single item. If it had no fundamentals it would be useless and worthless. Central banks keeping 30,000 tonnes of the metal in inventory is certainly a fundamental demand/use. China building up its gold reserves by several times over over the past decade is a fundamental. Gold certainly has more fundamentals than rare US coins do. And no one here would state that rare coins (or rare art) has no use and could be valued from anything from $1 to $10 MILL per item (ie the 1794 SP 66 FH dollar). I posted this same information a while back when the same illogical argument that gold is "useless" was brought up. It would appear that some people prefer to ignore facts because it's more fun to ride the bashing train. I should bookmark this thread for the next time the same illogical arguments are regurgitated. The Asian/European view of gold is what drives the world's gold markets....not Joe Six Pack's view which is heavily skewed by the US owning the world's reserve currency and being on an inflationary binge since WW2 (at the expense of the rest of the world).
<< <i> Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty. >>
Tell that to the governments of the world and their central banks. It's "fundamentals" are centuries and centuries of use and acceptance as a store of wealth.
I agree that productive companies represent the best investment ultimately. Hey, do you know anyone that owns German stock pre-WWII? I wonder if Gold was useful then? Gold was/is a store of value that could not be destroyed by government, war or human calamity.
Tyler >>
The fact that governments store it aren't "fundamentals". It's more a reflection on their strong belief that people are so stupid that they can be controlled by pretty rocks. There's no guarantee that people will care about gold in the future. I can easily see a time (maybe not in our lifetimes) that it comes to hold only a nominal decorative value. It provides essentially NO functional purpose. It's not a debate about whether it's a good "investment" or not. Gold has NO fundamentals, once again. It has virtually ZERO utility. Those are FACTS. Just HOW much do we really need to value a pretty rock? >>
I'll take 5000 years of human history over your "vision" any day.
Besides, the Chinese love gold. It makes no difference if you or I do not.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
<< <i>Supply and demand. Same as anything else. >>
Then it's clearly not an investment or a store of value but a mere speculative commodity, like corn or coffee beans. >>
The argument is not that gold is an investment. Only that it is a store of value and it does have value as a part of a diversified portfolio. Stocks don't rise and fall within the same speculative framework you mention? Stocks represent earnings, but the multiples of the stock price vs earnings is always in flux. That is a human concoction the same as placing a price on an ounce of gold.
What gives a stock price a 50X multiple over a 20X multiple? Who decides? Humans and human nature, the same as gold.
<< <i> But even with all of these fluctuations or ranges that are inherent, there is a fundamental basis under which an investment will logically trade at and make sense to most people. There is NO such existing fundamental basis for gold's price in 1900, 1970, 1980, 2000 or today or EVER in the history of time. It trades more like a tulip or a beanie babie. >>
Yet it trades, and has traded for centuries despite your protests. In fact, gold was the cornerstone of the world economic system for hundreds of years. It traded before beanie babies, before all the companies that comprise the world stock exchanges, before the advent of the United States itself. Gold predates all you know and will live on long after you are gone.
Btw, what gives a dollar its value, the unit that you use as your "fundamental Basis" as if it were some objectively real thing?
Gold isnt an "investment" so your arguments as if it were have no basis. Gold has value and is a store of wealth and that is a fact.
<< <i>...But even with all of these fluctuations or ranges that are inherent, there is a fundamental basis under which an investment will logically trade at and make sense to most people. There is NO such existing fundamental basis for gold's price in 1900, 1970, 1980, 2000 or today or EVER in the history of time. It trades more like a tulip or a beanie babie. >>
This can be said of EVERY asset on the plant, especially the stock market. Human whims took the stock market to crazy highs in 1929 and 2000, not fundamentals. The blowouts that followed were classic. The Tech bubble is a good example. So was housing in 2006-2008. Commodities in 2010-2011. Forget earnings and PE's, those are usually heavily influenced by human sentiment. Even money itself is subject to huge swings at a moment's notice making them "impossible" to properly value by the definition offered above. Look at the slides in the Yen, Aussie, Cando, and other currencies in the past several years. Bottom line is that every "asset" class on the plant has no intrinsic fundamental basis to do what they do based on your definition of not being able to price it...tulips and beanie babies included. I submit that the opposite is true. That is that every asset class on the planet (even lowly dirt, air, salt, sea water, rocks, etc.) all have fundamentals to determine their price. The fact that there can be huge swings is irrelevant...and is often due to man-made speculation....even with good old currencies and money. How many companies from the 1929 Dow are still around today? I guess they had no fundamental value to continue to exist as they became worthless. Gold has been around and valued by man for thousands of years.
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty.
Yep, just like the dollar has no fundamentals other than my ability to pay taxes. Of course they're about $18 trillion behind schedule on that deal, not counting the other side deals that constitute unfunded liabilities of gov.com. Gold may be just a pretty rock, but more countries recognize it as valuable every day as they attempt to work around the petrodollar payment system. US Treasuries and dollar bills are no more than just fancy paper with a fancy printing job and any value conferred on the dollar gets more diluted every day through gov.com spending and money creation.
And good ole Warren Buffet, the huge proponent of "capitalism", or I should say crony capitalism as he volunteers more taxes for you & me while he stands in the way of a pipeline construction job that would lower gas prices for you & me so that his Burlington Northern holdings can benefit by hauling crude in more expensive and more hazardous tankcars instead of just pumping it. In the meantime, Canada is incentivized to build their own pipeline to the West Coast so that the crude can be shipped to China instead. Yep, Buffet is a real gem when it comes to policy.
Q: Are You Printing Money? Bernanke: Not Literally
I have a couple thoughts on this. At least one of the respondents in this thread noted that Warren missed the point about gold's usefulness in society. Actually, he didn't. He noted astutely that all the gold usage in the world (for jewelry, gold-plating, gold teeth, etc.) could be an insignificant amount to the total gold available.
One would assume, that gold coins and bullion that make up the rest are essentially an extravagance and not as useful. However, this leads to my other thought where Warren fails to mention about gold's usage as currency versus fiat currency. Many (most?) nations want to have a stockpile of that "useless yellow metal" (my own quotes) to back their currency in case of paper/bond collapse. I'm really curious to know how Warren would respond to that.
I do own some gold. I enjoy owning the small amount I have. I'm not thrilled that it's gone down significantly in value since I've bought it...but such is life with hedging. I do consider gold to be a hedge and I'll hold onto it for an indeterminate amount of time. But, like Warren, I do think about this element called Gold. What is it? It's just a pretty metal that is not very common and is pulled from the ground. It's main usefulness is that it's pretty.
I got nothing but respect for Buffett. He buys up a stock then lets the world know about it. When the sheep come running to be a copy cat, he sells to them. Great guy! Sort of like the Pied Piper of Wall Street.
Since we're discussing the merits (or not) of gold as (1) a store of value, (2) an investment commodity and (3) a medium of exchange, here's another interesting point to ponder.
Article I, Section 10 of the U. S. Constitution prohibited “anything but gold and silver coin (as) a tender in payment of debts." Indeed, gold specie was "coin of the realm" as recently as 1933; the corresponding date for silver coinage is 1964.
This Constitutional directive was undoubtedly influenced by the bad experiences with the use of paper "Continental Currency" to fund the Revolutionary War. When I was a kid, we were taught the phrase "not worth a Continental" in school. Like all fiat currencies, it was wide open to manipulation and abuse by the issuing authority. Thus, the Founding Fathers mandated Article I, Section 10, when they penned the U. S. Constitution.
I'm not advising anyone to hold or invest in gold or silver, but have merely attempted to explain why I like them, as a part of a diversified investment portfolio and hedge against turbulent times. I actually prefer silver over gold at the present time. Whether one favors these precious metals or not, I feel that the U. S. Constitution has legitimized their ownership by it's citizens.
<< <i>I got nothing but respect for Buffett. He buys up a stock then lets the world know about it. When the sheep come running to be a copy cat, he sells to them. Great guy! Sort of like the Pied Piper of Wall Street. >>
Indeed. But this didn't work until after he had already made a great deal of money.
I suspect that he's just as falible as all men and the time will come that people will say he made a lot of bad investments in the last twenty years. I suspect they will say that because he never considered the structural and infrastructural deficiencies which have been allowed to accumulate in the economy. He's picking the right com- panies perhaps but only in the sense they can most profit from an unsustainable ec- onomic system. He's picking the least rotten fish in the barrel. Then they are pack- aged up for sale to believers.
I suspect they will say that he should have made more diversification into things like assets denominated in other currencies and metals.
Long term investment works best where trends and patterns are discernable but in modern times it has become very difficult to make predictions with government al- ways tinkering with the playing field and bankers gambling with depositor money. It's no longer possible to make predictions with manipulation and bankruptcy for profit. Consumers no longer demand quality so companies like Mcdonalls do very well and make him rich but there's always a reckoning and investment in poor qual- ity has a lot of risk. Companies can't always adapt their business model to new con- ditions and improving quality can be one of the most difficult adaptations. The auto industry did it but at the loss of a few good companies.
I believe Buffet has sound ideas and his investment strategy has certainly worked out over the years. As to stocks and gold, I always believed that a diversified portfolio would do best in terms of investment. As a test (I am a data guy) and not cherry picking a specific time frame except my working life, I went back and looked at the data.
Forty years ago the S&P stood at 63.54, yesterday it was 2,010.14. Gold was 154 and 1,215 when I last looked this morning.
The S&P has gone up a bit over 31 times in that period, while gold has gone up just under 8 times. I am certain there are time frames that look better for either of them, but just taking a random look as I had no idea what level either of them were 40 years ago. And of course you have to factor in inflation (leading to another heated discussion of what that actual number should be). If you accept 3 1/2 to 4 times that makes the difference even larger when you pull it out.
A comment to those who get all agitated that 50 percent of the people don't pay federal tax. Once you adjust for retirees (are they deadbeat?), children, the disabled, the unemployed looking for work, etc. you get a MUCH different picture. Numbers can be used to agitate when they lack context.
As to Buffet's comments regarding his secretary, understand that she makes a NICE salary, thus putting her in a higher tax bracket than he is. One last thing, he is giving ALL his money away to charity. How many of you would be worth billions and give it all away, not to mention living in the same house since the 60s. You may not like some of his ideas, but Warren Buffet is one of the good guys.
Retired United States Mint guy, now working on an Everyman Type Set.
<< <i>You may not like some of his ideas, but Warren Buffet is one of the good guys. >>
You'll get no disagreement from me. I'm merely suggesting that his more recent successes are largely a matter of luck and people following his lead. This detracts nothing at all from the man.
<< <i>i wonder what silver is going to settle at now? >>
I doubt silver will ever settle at any price until there's an off planet supply. It has always been very volatile.
I would have to totally agree with Buffet's assessment. He would not be a billionaire if he had been trying to guess the highs and lows of the P/M market.
<< <i>I would have to totally agree with Buffet's assessment. He would not be a billionaire if he had been trying to guess the highs and lows of the P/M market. >>
He is a billionaire partly because he is a crony capitalist.
<< <i>I would have to totally agree with Buffet's assessment. He would not be a billionaire if he had been trying to guess the highs and lows of the P/M market. >>
He is a billionaire partly because he is a crony capitalist. >>
To him, finding a penny/cent on the ground is the start of his next billion.
Long and interesting thread, with the usual skippable political BS embedded within it. While gold is nice to look at in coin form, it's at lot nicer to look at returns of my index funds the past 20 years, which have far outpaced gold. Sure you can pick your time frames and find the best returns for either, but getting dividends to reinvest and putting a %age of income has been OK to me. I'll listen to Buffett before any doomsday gold bugs for sure.
I'm not suggesting that gold is in a bubble. No one knows. No one EVER knows. THAT is the problem. There are no fundamentals.
Most assets you mention that actually are of value have a fundamental basis on why they are valued, and a rationale for relatively range under which they trade. Gold doesn't have that and never will unless a discovery is made that actually makes useful somehow.
The dollar is a medium of exchange. No one is arguing gold's role in history when it actually functioned as the dollar does today, as the main medium of exchange.
That gold has "value" is completely debatable and I would even argue that it really doesn't. What is the value is storing a rock that just sits there and which it's primary and intended purpose is to just sit there???
Your opinion seems to be that because gold isn't an industrial metal, it has no fundamental basis for valuation. On the other hand, you readily admit that the dollar has no fundamentals but you seem to be saying that because it is used as a medium of exchange, it has value (in contrast to gold).
This ignores the accumulation of gold by many world governments who are currently in the process of dumping the dollar as a medium of exchange. It also overweights the relatively brief history of the dollar as a medium of exchange vs. the long history of gold as a store of value AND as a medium of exchange.
Your opinion ignores the obvious nature of the dollar as a fiat currency that is continuously being devalued vs. the nature of gold as a relatively constant monetary asset that can't be devalued by government overspending and mismanagement, only by decree.
Nobody's arguing the ability of the US economy to generate a productivity and output beyond anything the world had ever seen before, but they might be arguing that the Fed's Zero Interest Rate Policy is destroying that very capital and the only ones who benefit are the insiders such as Buffett.
At the risk of being too non sequiter, gold is possibly a way to preserve wealth and to step aside from a system that seems rife with corruption and headed over the cliff.
That has some fundamental value, whether you see it or not.
Q: Are You Printing Money? Bernanke: Not Literally
I think I'm related to this guy. He's related to a few Presidents that I'm related to. One of my grandfathers had the same name in Warren but......whatever. He could easily dole out a billion dollars to 10,000 of his relatives and not miss a dime of it.
The more qualities observed in a coin, the more desirable that coin becomes!
Insurance policies are always a losing hand but yet most of us including Warren I bet have purchased it. Gold is a global insurance policy IMO and at certain times in history it been the best investment in the house. So it's everyone's choice, if you believe we just need to party on then go for it, if your concerned about the global economy you might want to take out at least a small policy. My .02
Comments
``https://ebay.us/m/KxolR5
<< <i>I couldn't blame him after what the government is putting Joan Langbord through for a measly ten ounces. >>
If the government had allowed the Langbords to sell those coins in 50-50 auction as it did with the legal 1933 double eagle, there would have been an immediate revenue source for "the people" and on going tax stream when the coins were sold in the future. Now they conserved "for the people" as the mint web site says. What a crock! Most of the people don't care, and in reality those coins belong to no one, certainly not "the people."
<< <i>
<< <i>This guy gets more respect than he deserves in my opinion. He talks about productivity making wealth be he throws his political support to a party that believes in punishing productivity and says to those who produce "you did not build that". He probably owes much of he success to those working for him who are way smarter. My take on articles like this is that someone shorted gold and are trying to take advantage of its recent weakness by rolling out the old showboat to drive it down more. >>
And which party would that be? The one that fights against single payer health care and increased minimum wage for hard working americans that are the base of our economy and productivity? Do tell?
Best, SH >>
Ah... ok then. Let's look at all the government success stories.
The Great Society (war on poverty). Check.
The War on Drugs.... Roger that.
Social Security.... Happy days are here again.
US Postal Service.... one big happy family.
Veterans Service.... Well taken care of for sure.
With the track record of our government with major programs, I expect the same amount of success for the ACA (even more so if we go to a single payer system). But hey, maybe it really will work out.
Most of the states that have increased their minimum wages have actually seen a boost to their economies.
I just Googled your comment and found some think tanks supporting such craziness.
These are in order of popularity.
Think Progress
Center for American Progress
Whithouse.gov
pbs.org
The Economist
Huffington Post
.......sensing a trend here?
<< <i> ... it would make my life better if everyone paid their fair share. >>
Please define "FAIR SHARE" and be specific.
Almost 50% of the population pay no FEDERAL INCOME TAXES.
By the way, investment income is taxed at a lower rate because the income it was derived from was already taxed at the federal rate. I love how responsible people who actually save their money and don't squander it are always required to pay for the irresponsible (I am NOT including those who ACTUALLY require real assistance.)
<< <i>
<< <i> ... it would make my life better if everyone paid their fair share. >>
Please define "FAIR SHARE" and be specific.
Almost 50% of the population pay no FEDERAL INCOME TAXES.
By the way, investment income is taxed at a lower rate because the income it was derived from was already taxed at the federal rate. I love how responsible people who actually save their money and don't squander it are always required to pay for the irresponsible (I am NOT including those who ACTUALLY require real assistance.) >>
A little off but I try to minimize my tax bill to the feds, I do not go crazy on deductions. I am more concerned on the local level where they hit me harder. If the government collected twice as much income tax next year as last year I do not see any improvements being made.
I look at gold as a place to park money for a while, fairly easy to sell. If the cash is in the bank it is fair game for my wife to park the money in what she thinks is a good place.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i> Like him or not, Buffet's comment about gold's virtual complete lack of productivity can't be argued by anyone with even a modicum of intelligence. It's value only lies in being the oldest FIAT currency. That is it. It has virtually ZERO "productive" value, unlike stocks or land. >>
Of course gold is fiat currency and of course buffet is right that it's insane
to dig gold out of the ground and bury it back in the ground. He's also right
that the road to riches has always been through commercial, industrial, or
investment avenues.
But none of these facts change the reality that humans individually and col-
lectively are prone to excesses which result in various forms of collapse. Ev-
erything is cyclical and it has never been smart to be on the wrong end of a
cycle. Buffet's old enough it might not be much of a concern for him but peo-
ple who might need to survive the next cycle should own some gold. The Boy
Scout motto is "be prepared" and when a portfolio drops to nothing everybody
needs to be prepared. This doesn't mean fill your basement with food that'll
need to be thrown away in ten years or to get survivalist training but it does
mean common sense precautions to take care of yourself and yours for a per-
iod of time in case of any type of catastrophy. For investors gold still plays a
key role in just this.
Google why 50% pay no federal taxes and you'll see why - basically you can't get blood from a turnip. By the way I have a small business, employ 25 people , and work my ass off. Other than a few high school kids that start at minimum wage, I start my unskilled employees at $9/hr and after 90 days pay 100% of their health insurance.
Google any article that has looked at the facts about the economy in states that pay more than the federal minimum wage, you'll see that those states are doing well. Yes the conservatives argue against raising the minimum wage and progressives for raising it, but so far it looks like the facts are supporting the progressive's theories.
Sounds pretty exclusive to me. And I guess you are correct that anyone can own a share. But currently one share of Berkshire Hathaway Class A common stock is $212,000. Not exactly a stock for the common man.
There is a Class B stock that is priced at about $140 but that is a tracking stock without full voting rights (1/10,000 of a share).
I guess many people own shares of the A stock but at $212,000 per share there is little to no shares held in mutual funds, pensions or 401 (k) accounts.
Just thought I would throw a few facts into the discussion.
coinhack, get your facts straight. Little to no shares in mutual funds, pensions or 401(k)s. Are you serious? BRK is in every large cap index fund/etf going.
> There are hundreds of institutional shareholders representing "thousands" of regular people, like Cal Pers (Calif Public Employees Retirement System), FMR (Fidelity), Capital World (American Fds et al), Davis, Bank of NY, State Farm, Tweedy Browne, Invesco, Wells Fargo, State Street, US Bancorp...
> anyone buy class B shares, they're entitled to a portion of the same corporate assets as class A shares.
Well there are lots of factors that make an economy, not just minimum wage but look at California with one of the highest mw at $9. I think they are somewhere around 7.4% unemployment compared to Texas with about 5%. Texas mw is $7.25. To me it just makes intuitive sense that companies with high low skilled labor needs will just eliminate jobs or hire illegals if they can and more and more teenagers who need a starter job to learn work skills will be stuck at home playing video games because the available jobs are very scarce.
<< <i> ... but so far it looks like the facts are supporting the progressive's theories. >>
Those progressive theories sure are working out well for Chicago and Detroit.
Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income.
<< <i>Buffett is a funny guy. Buy stocks which pay dividends? His own company, Berkshire Hathaway, hasn't paid a dividend since 1967! >>
Every company Berkshire has either bought outright or one they own stock in pays Berkshire "dividends". Buffet then uses that money to buy other assets. He could pay it out as a dividend to Berkshire shareholders but he believes he can do better with the money than his shareholders can themselves (a decision many companies make). He's right too....
<< <i>Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income. >>
With land you can grow crops or build buildings to eventually rent out. All of that equals dividends.
jom
<< <i>With land you can grow crops or build buildings to eventually rent out. All of that equals dividends.
jom >>
Have you ever farmed? Rented out a property? It takes a lot of human energy. Gold is a store of value that requires NO energy.
In principal Buffet's argument has merit, but gosh, people lose money buying stocks every day from so called "productive" companies. Stocks are speculative, moreso than gold, most do not pay dividends, and unlike gold, companies can go bust wiping out ALL value of their so-called "productive" capacity.
Lehman Brothers, Enron, Worldcom etc etc, were all productive companies too. Where is the shareholder's money now? Evaporated like dew before the hot summer sun that is where. Gold? It survives all human business foibles, cons, scams and schemes.
That said, anyone have any BABA to sell?
Tyler
This is not mine. It does belong to a fellow board member.
``https://ebay.us/m/KxolR5
<< <i>RE:
Sounds pretty exclusive to me. And I guess you are correct that anyone can own a share. But currently one share of Berkshire Hathaway Class A common stock is $212,000. Not exactly a stock for the common man.
There is a Class B stock that is priced at about $140 but that is a tracking stock without full voting rights (1/10,000 of a share).
I guess many people own shares of the A stock but at $212,000 per share there is little to no shares held in mutual funds, pensions or 401 (k) accounts.
Just thought I would throw a few facts into the discussion.
coinhack, get your facts straight. Little to no shares in mutual funds, pensions or 401(k)s. Are you serious? BRK is in every large cap index fund/etf going.
> There are hundreds of institutional shareholders representing "thousands" of regular people, like Cal Pers (Calif Public Employees Retirement System), FMR (Fidelity), Capital World (American Fds et al), Davis, Bank of NY, State Farm, Tweedy Browne, Invesco, Wells Fargo, State Street, US Bancorp...
> anyone buy class B shares, they're entitled to a portion of the same corporate assets as class A shares. >>
You are changing what I said to make your argument. I didn't say B-H was not held in pensions, 401 (k)s etc. I said Class A or the original common stock voting shares were not used. The trading volume for the Class A shares is around 300 shares a day. That is not going to work for a mutual fund.
Class B shares or the so-called tracking shares are held in pensions, funds, etc. They trade around 3 million shares or more a day.
Class B shares have virtually no voting rights and receive no dividends. They are a way to bet on the value of the Class A shares at an affordable price. $140 compared to $212,000. In the case of a dissolution of the company I don't believe the Class B shares would have the same rights to the corporate assets as the Class A shares. That's why they are Class B shares.
In any case, all I was commenting on was Bill Jones comment that Buffet had made money for "an exclusive group of people". I was just replying that a $212,000 a share stock was kinda exclusive.
This is a clear thought. However, I think our instinct toward gold is atavistic - based on its scarcity in a different time and not its current utility.
and it sets us apart from practitioners and consultants. Gregor
Hindsight is 20/20. All the negative publicity lately tell me that maybe it has made a bottom. Just like the time to sell was when everyone was calling for $2,000-$3,000 Gold.
Borsheim's right near his headquarters....
<< <i>
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty. >>
Tell that to the governments of the world and their central banks. It's "fundamentals" are centuries and centuries of use and acceptance as a store of wealth.
I agree that productive companies represent the best investment ultimately. Hey, do you know anyone that owns German stock pre-WWII? I wonder if Gold was useful then? Gold was/is a store of value that could not be destroyed by government, war or human calamity.
Tyler
(Wait, pointing in a different universe expecting the result to be the same as pointing in the real universe is unjustified. Cannot get reliable directions in alternate universes. I'll find it myself.)
Ed. S.
(EJS)
<< <i>I guess this means he will be buying gold soon. >>
Or maybe he is already short.
<< <i>
<< <i>Buffett is a funny guy. Buy stocks which pay dividends? His own company, Berkshire Hathaway, hasn't paid a dividend since 1967!
Last I checked, land usually doesn't pay dividends either, unless you're sitting on top of oil or natural gas and getting a royalty check. In fact, you have to pay taxes on land, whether or not it's producing any income. >>
We're not talking about barren worthless land in the middle of nowhere. We're talking about land that can be put to productive use, either through farming, mining resources, commercial or residential income, etc. Bottom line is, land is required for all of those things. As for Berkshire not paying dividends, its a tax/capital appreciation strategy. No company should be paying dividends if they have better uses for that money. In the case of Berkshire, they believe they are looking out for their investors by utilizing those funds in other capital appreciation strategies. Considering their results, how can anyone argue with their strategy. >>
There are lots of companies [Apple being the biggest] who are cash rich and getting richer who/that haven't the slightest idea what to do with all of that cash. Warren's business model is a little more conducive to spending those dividends internally because buying 100 million shares CSX works for him. Apple OTOH apparently can't find anything to to spend $20 billion on that would be a good business fit.
<< <i>Mr. Buffet is still bitter that he sold his HUGE silver position at ~$4.50/oz. Just kidding about the bitter part. Not the price.
Gold has been good to me. >>
Nic, do you have a reference on that? As far as I knew he was buying his 120 MILL oz of silver in the mid to late 1990's when it was $4-$6/oz. Armstrong gives a lot of detail on when Buffet was buying. He sold off around early 2006 (so I've read) just as the SLV ETF was getting off the pad. His silver ounces may have been the key to supplying the SLV fund with an initial 50-100 MILL oz of silver that would have been readily available and not disrupted the market coming from a single private source. Silver was $8-$14 during the first half of 2006. Buffett had the right idea as he knew silver was going to be a long term winner once 2004 arrived. It was foolish of him to sell out by 2006 was the majority of the upside yet to come. I suspect he was "convinced" or "prompted" to sell by a much higher entity.
Just take a look at part of a speech Buffett gave at Harvard in 1998 when he said of gold:
"(It) gets dug out of the ground in Africa or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
I always get a good laugh when I read the above because at that same time Buffett was sitting on 1/2 - 1 MILL oz of silver. And it gets dug out of the ground and guarded just like gold does....esp. when you own 1 MILL oz of it. Apparently, the Martians would be scratching their heads on Buffet's attempt to corner and drive up silver prices. I think he would have succeeded but for some reason was forced out of that position just before silver really took off from 2006-2008. I think he was made an offer he couldn't refuse by the big banks or US Govt.
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty.
This is incorrect on so many levels. Gold has numerous important uses which therefore make up its fundamental demand....of which jewelry is the largest single item. If it had no fundamentals it would be useless and worthless. Central banks keeping 30,000 tonnes of the metal in inventory is certainly a fundamental demand/use. China building up its gold reserves by several times over over the past decade is a fundamental. Gold certainly has more fundamentals than rare US coins do. And no one here would state that rare coins (or rare art) has no use and could be valued from anything from $1 to $10 MILL per item (ie the 1794 SP 66 FH dollar). I posted this same information a while back when the same illogical argument that gold is "useless" was brought up. It would appear that some people prefer to ignore facts because it's more fun to ride the bashing train. I should bookmark this thread for the next time the same illogical arguments are regurgitated. The Asian/European view of gold is what drives the world's gold markets....not Joe Six Pack's view which is heavily skewed by the US owning the world's reserve currency and being on an inflationary binge since WW2 (at the expense of the rest of the world).
Gold - the most useful metal - and a long ways from ZERO utility
Ted Butler's view of Buffett's silver play
<< <i>
<< <i>
<< <i>
Gold has no fundamentals, and NO ONE here can justify why it would be undervalued at $5/ounce or overvalued at a $1 billion per ounce. There is no "intrinsic value" to it as people like to mistakenly ascribe. It's just a pretty rock that sits there and produces nothing. Many people might not even think it all that pretty. >>
Tell that to the governments of the world and their central banks. It's "fundamentals" are centuries and centuries of use and acceptance as a store of wealth.
I agree that productive companies represent the best investment ultimately. Hey, do you know anyone that owns German stock pre-WWII? I wonder if Gold was useful then? Gold was/is a store of value that could not be destroyed by government, war or human calamity.
Tyler >>
The fact that governments store it aren't "fundamentals". It's more a reflection on their strong belief that people are so stupid that they can be controlled by pretty rocks. There's no guarantee that people will care about gold in the future. I can easily see a time (maybe not in our lifetimes) that it comes to hold only a nominal decorative value. It provides essentially NO functional purpose. It's not a debate about whether it's a good "investment" or not. Gold has NO fundamentals, once again. It has virtually ZERO utility. Those are FACTS. Just HOW much do we really need to value a pretty rock? >>
I'll take 5000 years of human history over your "vision" any day.
Besides, the Chinese love gold. It makes no difference if you or I do not.
<< <i>
<< <i>Supply and demand. Same as anything else. >>
Then it's clearly not an investment or a store of value but a mere speculative commodity, like corn or coffee beans. >>
The argument is not that gold is an investment. Only that it is a store of value and it does have value as a part of a diversified portfolio. Stocks don't rise and fall within the same speculative framework you mention? Stocks represent earnings, but the multiples of the stock price vs earnings is always in flux. That is a human concoction the same as placing a price on an ounce of gold.
What gives a stock price a 50X multiple over a 20X multiple? Who decides? Humans and human nature, the same as gold.
Tyler
<< <i>
But even with all of these fluctuations or ranges that are inherent, there is a fundamental basis under which an investment will logically trade at and make sense to most people. There is NO such existing fundamental basis for gold's price in 1900, 1970, 1980, 2000 or today or EVER in the history of time. It trades more like a tulip or a beanie babie. >>
Yet it trades, and has traded for centuries despite your protests. In fact, gold was the cornerstone of the world economic system for hundreds of years. It traded before beanie babies, before all the companies that comprise the world stock exchanges, before the advent of the United States itself. Gold predates all you know and will live on long after you are gone.
Btw, what gives a dollar its value, the unit that you use as your "fundamental Basis" as if it were some objectively real thing?
Gold isnt an "investment" so your arguments as if it were have no basis. Gold has value and is a store of wealth and that is a fact.
Tyler
<< <i>...But even with all of these fluctuations or ranges that are inherent, there is a fundamental basis under which an investment will logically trade at and make sense to most people. There is NO such existing fundamental basis for gold's price in 1900, 1970, 1980, 2000 or today or EVER in the history of time. It trades more like a tulip or a beanie babie. >>
This can be said of EVERY asset on the plant, especially the stock market. Human whims took the stock market to crazy highs in 1929 and 2000, not fundamentals. The blowouts that followed were classic. The Tech bubble is a good example. So was housing in 2006-2008. Commodities in 2010-2011. Forget earnings and PE's, those are usually heavily influenced by human sentiment. Even money itself is subject to huge swings at a moment's notice making them "impossible" to properly value by the definition offered above. Look at the slides in the Yen, Aussie, Cando, and other currencies in the past several years. Bottom line is that every "asset" class on the plant has no intrinsic fundamental basis to do what they do based on your definition of not being able to price it...tulips and beanie babies included. I submit that the opposite is true. That is that every asset class on the planet (even lowly dirt, air, salt, sea water, rocks, etc.) all have fundamentals to determine their price. The fact that there can be huge swings is irrelevant...and is often due to man-made speculation....even with good old currencies and money. How many companies from the 1929 Dow are still around today? I guess they had no fundamental value to continue to exist as they became worthless. Gold has been around and valued by man for thousands of years.
Yep, just like the dollar has no fundamentals other than my ability to pay taxes. Of course they're about $18 trillion behind schedule on that deal, not counting the other side deals that constitute unfunded liabilities of gov.com. Gold may be just a pretty rock, but more countries recognize it as valuable every day as they attempt to work around the petrodollar payment system. US Treasuries and dollar bills are no more than just fancy paper with a fancy printing job and any value conferred on the dollar gets more diluted every day through gov.com spending and money creation.
And good ole Warren Buffet, the huge proponent of "capitalism", or I should say crony capitalism as he volunteers more taxes for you & me while he stands in the way of a pipeline construction job that would lower gas prices for you & me so that his Burlington Northern holdings can benefit by hauling crude in more expensive and more hazardous tankcars instead of just pumping it. In the meantime, Canada is incentivized to build their own pipeline to the West Coast so that the crude can be shipped to China instead. Yep, Buffet is a real gem when it comes to policy.
I knew it would happen.
and it sets us apart from practitioners and consultants. Gregor
One would assume, that gold coins and bullion that make up the rest are essentially an extravagance and not as useful. However, this leads to my other thought where Warren fails to mention about gold's usage as currency versus fiat currency. Many (most?) nations want to have a stockpile of that "useless yellow metal" (my own quotes) to back their currency in case of paper/bond collapse. I'm really curious to know how Warren would respond to that.
I do own some gold. I enjoy owning the small amount I have. I'm not thrilled that it's gone down significantly in value since I've bought it...but such is life with hedging. I do consider gold to be a hedge and I'll hold onto it for an indeterminate amount of time. But, like Warren, I do think about this element called Gold. What is it? It's just a pretty metal that is not very common and is pulled from the ground. It's main usefulness is that it's pretty.
to be a copy cat, he sells to them. Great guy! Sort of like the Pied Piper of Wall Street.
Article I, Section 10 of the U. S. Constitution prohibited “anything but gold and silver coin (as) a tender in payment of debts." Indeed, gold specie was "coin of the realm" as recently as 1933; the corresponding date for silver coinage is 1964.
This Constitutional directive was undoubtedly influenced by the bad experiences with the use of paper "Continental Currency" to fund the Revolutionary War. When I was a kid, we were taught the phrase "not worth a Continental" in school. Like all fiat currencies, it was wide open to manipulation and abuse by the issuing authority. Thus, the Founding Fathers mandated Article I, Section 10, when they penned the U. S. Constitution.
I'm not advising anyone to hold or invest in gold or silver, but have merely attempted to explain why I like them, as a part of a diversified investment portfolio and hedge against turbulent times. I actually prefer silver over gold at the present time. Whether one favors these precious metals or not, I feel that the U. S. Constitution has legitimized their ownership by it's citizens.
<< <i>I got nothing but respect for Buffett. He buys up a stock then lets the world know about it. When the sheep come running
to be a copy cat, he sells to them. Great guy! Sort of like the Pied Piper of Wall Street. >>
Indeed. But this didn't work until after he had already made a great deal of money.
I suspect that he's just as falible as all men and the time will come that people will
say he made a lot of bad investments in the last twenty years. I suspect they will
say that because he never considered the structural and infrastructural deficiencies
which have been allowed to accumulate in the economy. He's picking the right com-
panies perhaps but only in the sense they can most profit from an unsustainable ec-
onomic system. He's picking the least rotten fish in the barrel. Then they are pack-
aged up for sale to believers.
I suspect they will say that he should have made more diversification into things
like assets denominated in other currencies and metals.
Long term investment works best where trends and patterns are discernable but in
modern times it has become very difficult to make predictions with government al-
ways tinkering with the playing field and bankers gambling with depositor money.
It's no longer possible to make predictions with manipulation and bankruptcy for
profit. Consumers no longer demand quality so companies like Mcdonalls do very
well and make him rich but there's always a reckoning and investment in poor qual-
ity has a lot of risk. Companies can't always adapt their business model to new con-
ditions and improving quality can be one of the most difficult adaptations. The auto
industry did it but at the loss of a few good companies.
Forty years ago the S&P stood at 63.54, yesterday it was 2,010.14. Gold was 154 and 1,215 when I last looked this morning.
The S&P has gone up a bit over 31 times in that period, while gold has gone up just under 8 times. I am certain there are time frames that look better for either of them, but just taking a random look as I had no idea what level either of them were 40 years ago. And of course you have to factor in inflation (leading to another heated discussion of what that actual number should be). If you accept 3 1/2 to 4 times that makes the difference even larger when you pull it out.
A comment to those who get all agitated that 50 percent of the people don't pay federal tax. Once you adjust for retirees (are they deadbeat?), children, the disabled, the unemployed looking for work, etc. you get a MUCH different picture. Numbers can be used to agitate when they lack context.
As to Buffet's comments regarding his secretary, understand that she makes a NICE salary, thus putting her in a higher tax bracket than he is. One last thing, he is giving ALL his money away to charity. How many of you would be worth billions and give it all away, not to mention living in the same house since the 60s. You may not like some of his ideas, but Warren Buffet is one of the good guys.
<< <i>You may not like some of his ideas, but Warren Buffet is one of the good guys. >>
You'll get no disagreement from me. I'm merely suggesting that his more recent successes are largely
a matter of luck and people following his lead. This detracts nothing at all from the man.
<< <i>i wonder what silver is going to settle at now? >>
I doubt silver will ever settle at any price until there's an off planet supply. It has always been very volatile.
<< <i>it would make my life better if everyone paid their fair share. >>
Yes. The 50% that don't pay should actually have to contribute their fair share.
<< <i>I would have to totally agree with Buffet's assessment. He would not be a billionaire if he had been trying to guess the highs and lows of the P/M market. >>
He is a billionaire partly because he is a crony capitalist.
<< <i>
<< <i>I would have to totally agree with Buffet's assessment. He would not be a billionaire if he had been trying to guess the highs and lows of the P/M market. >>
He is a billionaire partly because he is a crony capitalist. >>
To him, finding a penny/cent on the ground is the start of his next billion.
10-4,
My Instagram picturesErik
My registry sets
I'm not suggesting that gold is in a bubble. No one knows. No one EVER knows. THAT is the problem. There are no fundamentals.
Most assets you mention that actually are of value have a fundamental basis on why they are valued, and a rationale for relatively range under which they trade. Gold doesn't have that and never will unless a discovery is made that actually makes useful somehow.
The dollar is a medium of exchange. No one is arguing gold's role in history when it actually functioned as the dollar does today, as the main medium of exchange.
That gold has "value" is completely debatable and I would even argue that it really doesn't. What is the value is storing a rock that just sits there and which it's primary and intended purpose is to just sit there???
Your opinion seems to be that because gold isn't an industrial metal, it has no fundamental basis for valuation. On the other hand, you readily admit that the dollar has no fundamentals but you seem to be saying that because it is used as a medium of exchange, it has value (in contrast to gold).
This ignores the accumulation of gold by many world governments who are currently in the process of dumping the dollar as a medium of exchange. It also overweights the relatively brief history of the dollar as a medium of exchange vs. the long history of gold as a store of value AND as a medium of exchange.
Your opinion ignores the obvious nature of the dollar as a fiat currency that is continuously being devalued vs. the nature of gold as a relatively constant monetary asset that can't be devalued by government overspending and mismanagement, only by decree.
Nobody's arguing the ability of the US economy to generate a productivity and output beyond anything the world had ever seen before, but they might be arguing that the Fed's Zero Interest Rate Policy is destroying that very capital and the only ones who benefit are the insiders such as Buffett.
At the risk of being too non sequiter, gold is possibly a way to preserve wealth and to step aside from a system that seems rife with corruption and headed over the cliff.
That has some fundamental value, whether you see it or not.
I knew it would happen.
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection