Author Topic: Investing in precious metals  (Read 16130 times)

quakerplain

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Investing in precious metals
« on: February 14, 2012, 08:02:24 PM »
Ten Commandments for Buying Gold and Silver

    Always take delivery.
    Never buy premium if you can avoid it.
    Buy bullion for business, numismatics for fun.
    Buy silver first, then gold.
    Buy small gold first, then large.
    Never buy exotic coins or modern rarities or anything you don't understand.
    Know your dealer.
    What governments can't find, they can't steal.
    Never swap bullion coins for U.S. $20 gold pieces.
    Never break the law.

Four Bullion Portfolios

Please note that our recommendations vary depending on your concerns and the market. If you want to invest in gold and silver to protect your assets and have something easily divisible and spend-able to hedge currency depreciation or collapse, then:

    If you have $5,000 or less to spend
    At least half in silver (either US 90% silver coin or 1oz. Silver Rounds) and half in British Sovereigns, French 20 Francs, Mexican Pesos (10, 5, 2.5 or 2) or some other inexpensive, fractional gold coin.
    For $10,000 buy
    Two-thirds US 90% silver coin or 1oz. Silver Rounds, with the balance divided between a fractional coin like British Sovereigns, French 20 Francs, Mexican Pesos (10, 5, 2.5, or 2) AND Krugerrands, Austrian 100 Coronaes or Mexican 50 Pesos.
    For $25,000 buy
    Two-thirds US 90% silver coin or 1oz. Silver Rounds; half of the remaining third in Sovereigns, French 20 Francs, or 1/4 oz. American Eagles; and the balance in one oz. Krugerrands, Austrian 100 Coronas, Mexican 50 Pesos, or American Eagles.
    For $75,000 buy
    Two-thirds US 90% silver coin or 1oz. Silver Rounds; $5,000 worth of Sovereigns, 20 Francs, or 1/4 Eagles; the balance in Krugerrands, American Eagles, Mexican 50 Pesos or Austrian 100 Coronas. (For over $75,000 simply do multiples of this portfolio.)

If you want to invest in precious metals to simply protect your assets and don’t think you’ll ever need to actually barter with them, then:

    If you have $5,000 or less to spend
    Half in US 90% silver coin or 1oz. Silver Rounds, half in one ounce Krugerrands or American Eagles, Austrian 100 Coronas, or Mexican 50 Pesos.
    For $5,000 through $25,000
    Put at least half of your money in US 90% silver coin or 1oz. Silver Rounds; the rest in one ounce Krugerrands or American Eagles, or in Austrian 100 Coronas or Mexican 50 Pesos.
    For $75,000
    Get bags of US 90% silver or 1oz. Silver Rounds for 2/3 of your order; the balance in Krugerrands, American Eagles, 100 Coronas, or 50 Pesos. (For over $75,000 simply do multiples of this portfolio.)

Other Frequently Asked Questions
What is US 90% silver coin and why do you recommend it?

90% silver coin is quarters, dimes, and half-dollars minted before 1965. (90% silver coin does not include silver dollars.) Everyone knows that 4 quarters = 1 dollar. In the same way, 4 quarters minted before 1965 = 1 face value dollar. A face value dollar is how we sell 90% silver coin. So, when you ask for the price of 90% silver we will say it costs, for example, $25.00 per face value dollar. A face value dollar is either 10 dimes, four quarters, or two half-dollars. A face value dollar contains .715 ounces of silver. The standard trading unit for 90% silver coin is a “bag” of $1,000.00 face value, containing 715 troy ounces. You can purchase any portion of a bag that you wish. We recommend 90% silver coin simply because it is often the cheapest, most divisible, most widely recognised and traded form of silver.
What about Silver Rounds, what are those?

Silver Rounds are simply one ounce, 99.9% pure silver coins minted in the United States. They are made by various private refineries and are not just round “blanks” of silver. They all have varying pictures because the companies that mint them have varying production runs using different designs. Regardless of the picture on their front and back, all silver rounds we sell state clearly on their face, “1oz. Silver, 99.9% pure (or .999 fine).” We sometimes recommend Silver Rounds instead of 90% Silver Coin because premiums (not our commission—the premium is the percentage over the spot price that you pay for a coin) on both coins fluctuate for a variety of reasons. Since we consider it our duty to sell you liquid coins for the best price, sometimes our recommendations change.
Why do you recommend gold coins like Krugerrands, Austrian 100 Coronaes, and Mexican 50 Pesos, and what are they?

We recommend these foreign coins because they cost less per ounce and give you more gold for your money than the American Eagle gold coin series (which is minted in the United States today). All of these coins are well known in the industry and any dealer will readily buy them. The 22 karat South African Krugerrand gold coin contains exactly one troy ounce of fine (pure) gold. The American Eagle copied the Krugerrand’s specifications, and is minted to exactly the same weight and fineness. The Austrian 100 Coronae is an official re-strike from the Austrian mint. It is 20 karat (90% pure) and contains exactly 0.9802 troy ounce fine gold. The Mexican 50 Peso is an official re-strike from the 400-year old Mexico City mint. A 20 karat coin, it contains exactly 1.2057 troy ounce of fine gold. These three coins take turns as the cheapest on our price sheet.
What about the purity of the Krugerrand, Eagle, 50 Peso, and Austrian 100 Coronae? Will they be worth less later since they’re not 24 karat?

Purity is largely irrelevant among gold and silver dealers. Coins and bars are bought and sold based on their weight, not their purity. Unless you’re going to melt the coins down, it’s just not an issue and doesn’t affect the price.
Why do you recommend older-issue, foreign fractional gold coins instead of modern issues or American Eagle fractionals?

Modern issues like American Eagles, Maple Leaves, Philharmonics, and Nuggets include half, quarter, and tenth ounce coins: the smaller the coin, the higher the cost per ounce. With the smallest coins, premiums over the gold content approach 15%. That makes no economic sense because gold is gold. British sovereigns (containing 0.2354 troy ounce fine gold), French 20 francs (0.1867 oz.), Swiss 20 francs (0.1867 oz.), German 20 marks (0.2304 oz.), Netherlands 10 guilders (0.1947 oz.), the whole series of Mexican peso coins, and a number of other gold coins offer lower cost per ounce and good liquidity. Not recommended are gold coins so infrequently seen in this country that you will suffer a big discount when you sell them, such as Iranian pahlavis (0.2354 oz.) or Saudi guineas (0.2354 oz.). If you can’t sell them, they’re not a bargain.
Nowhere in your recommendations do I see anything about pure gold coins like the Canadian Maple Leaf or Austrian Philharmonic. Why not?

Gold is one of the softest and most ductile metals. Pure gold coins scratch and scar very easily unless handled with extreme care. Throughout history gold coins have generally been alloyed with copper or silver, hardening them to withstand circulation. Customers often unwittingly damage pure gold coins and therefore receive up to 5% less for them when they sell. In our opinion the purity of 24 karat gold confers no benefit and in fact often creates drawbacks.
What about government gold confiscation, Moneychanger?

We expect it more likely for you to be abducted by aliens than for the Federal Government to attempt gold confiscation. First, gold no longer forms a significant part of the monetary reserves in this country, as it did in 1934 and therefore, confiscation makes no sense. Second, the folks who tell you about government confiscation are generally trying to sell you overpriced coins that will line their pockets and empty yours.
(from Franklin Sanders, the Money changer)
*********************************************************************************************
Begin my commentary

We like to hedge our bets when it comes to possession. There was a poor Canadian chap who was relieved of a sizeable
stash by robbers who made him open the safe at gunpoint. It also does no good if you cannot remember where you
buried it.

So while we would never admit to any midnight gardening, if we were to indulge in such an activity then it might be wise to
not keep all one's eggs in one basket.

Ahem!

Toward that end there are two groups that I am familiar with for hedging.
One is Silver saver which is aimed at small investors. They are based out of Lawrence Ks and use a private vault in Delaware
https://silversaver.com/share/DTNTW/
The other is Goldmoney by James Turk. It is outside the CONUS which is both a blessing and a curse for many reasons
http://www.goldmoney.com/index.html?langid=0

If you cannot find a local vendor we have done business with Franklin Sanders  at Moneychangers and highly recommend
them. They are a family run business in Tennessee and you can count on a straight and discreet deal. I also rather enjoy
doing business with the "most dangerous man in the mid south" His story is incredible and worth the read.
http://the-moneychanger.com/

Camino Coins is another group which comes highly recommended. I have not traded with these folks, but I trust the chap
who has. He's been trading with them for forty years now.
http://caminocompany.com/

We have done business with the two groups, and have heard good things about the second two

Blessings

quakerplain





« Last Edit: February 14, 2012, 09:13:27 PM by quakerplain »

arebelspy

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Re: Investing in precious metals
« Reply #1 on: February 14, 2012, 08:40:55 PM »
I'd have thought this was some kind of spam from an account created by a gold seller for that purpose if I didn't see your awesome other post about kerosene and thoughtful reply on paying down a mortgage vs. investing.

Give due credit where your info is copy/pasted from.  I found those 10 commandments here: http://the-moneychanger.com/answers/ten_commandments_for_buying_gold_and_silver

Do you have any relationship with any of the sites you linked to?

That aside, I'm curious why you cut and pasted this article here.  Was there something particularly insightful about it, or anything you wanted to add to it?

I think it could segway into an interesting precious metals as an overall part of Asset Allocation discussion (including the Permanent Portfolio, etc.), but not sure where you're going with this, with no real comment of your own following the article...
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vwDavid

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Re: Investing in precious metals
« Reply #2 on: February 14, 2012, 10:31:12 PM »
I didn't think MMM believes in precious metals....??? I wanted to ask the question to but since it doesn't bring an income stream is it an MMM principal?

I do like the idea but there is the storage issue...
« Last Edit: February 14, 2012, 10:38:45 PM by vwDavid »

Mike Key

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Re: Investing in precious metals
« Reply #3 on: February 14, 2012, 10:41:14 PM »
There is a lot of hype behind previous metals, and a lot to be made off people's fears of an already bad economy and general lack of knowledge and understanding.

I personally did some silver investing and luckily sold all of it during the run up to $49.00 an ounce. It hasn't regained those highs in over a year, and has been pretty much flat, dipping back under $29.00 an ounce just recently. Of course, I have a friend who is a silver bug, and it's always a good time to buy according to him. Buy low and sell high means nothing apparently.

Learning how to negate sovereign risk will do a lot more for you if you're worried about dooms day scenarios than stock piling food and coins.

vwDavid

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Re: Investing in precious metals
« Reply #4 on: February 15, 2012, 09:33:40 AM »


Learning how to negate sovereign risk will do a lot more for you if you're worried about dooms day scenarios than stock piling food and coins.

Can you elucidate this comment a little further. What does that statement mean to you?

Jarvis

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Re: Investing in precious metals
« Reply #5 on: February 15, 2012, 03:47:42 PM »
Investing in precious metals is something I will not do. 

So you buy a lump of gold.  It just sits there.  It doesn't produce dividends.  You don't rent it to someone.  This sounds like an investment for a silly person.

Rich M

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Re: Investing in precious metals
« Reply #6 on: February 15, 2012, 07:26:35 PM »
Investing in precious metals is something I will not do. 

So you buy a lump of gold.  It just sits there.  It doesn't produce dividends.  You don't rent it to someone.  This sounds like an investment for a silly person.

I'm with you on this one.  Although it's been money for thousands of years, it has little utility, has some but very few uses and is cumbersome to handle, store and evaluate.

Planet Money on NPR did a few stories on it a couple years ago.  They invested in it and although the price of gold went up (20%) during their stint, they lost money on it overall due to brokerage fees. 

I look at it this way.  If I were to sell a car for $5k, and someone offered me gold as payment.  I would have to increase the price of the car by the broker overhead, then increase it again for the cost to verify the worth/authenticity of the gold and then increase it again for the volatility of the price of gold.  Now if you owned the gold and wanted my car, would you be willing to pay more? 

EnemyMind

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Re: Investing in precious metals
« Reply #7 on: February 16, 2012, 05:00:53 AM »
It seems that investing in this type of thing is a bit suspect for the reasons discussed. If you want to possess the actual metal you are somewhat betting that it itself will be valuable, or more valuable then an alternative purchase.

In a significant economic collapse/end of the world type thing I would much rather possess other things then lumps of gold. Ammunition/guns/seeds.. etc etc.

Adding to that if you own stock/instruments in the metals market and everything goes to hell that is as worthless as everything else.

James Wesley Rawles goes into some of this thought, and once you move a bit deeper past the fluffly buy gold for the end of the world crowd you get into that type of thought more.

Dave

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Re: Investing in precious metals
« Reply #8 on: February 16, 2012, 05:11:17 AM »
I'm in gold, but not with a view towards the apocalypse (if that happens, meh! I probably won't be around to worry...)

I'm in a physical gold ETF so I don't have to worry about the physical metal and the costs of holding it are averaged out across huge numbers of investors.

The purpose is simply to profit from / guard against something like the Eurozone breakup. If that happens, stocks and bonds will take a pounding and the money will have to flee somewhere - at that point, I'll be able to sell my expensive gold and participate in the equity/bond sale!

Equally, the eurozone might get 'fixed' (somehow!) and equities may soar. In that case, gold will become cheap, and I can draw profits from the expensive equities to buy cheap gold.

That's the theory anyway...

Mike Key

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Re: Investing in precious metals
« Reply #9 on: February 17, 2012, 08:40:56 PM »
Can you elucidate this comment a little further. What does that statement mean to you?

Not here, but in another thread I pointed out that most of the claims by metal bugs are always about fait currencies and a US Dollar collapse, which is why you should be stock piling.

Anyone basically familiar with simple history and economics will tell you that even if the US dollar was to collapse, it won't be the end of every economy on earth. Other systems will quickly fill the vacuum.

We already know the extremely wealthy stash assets all over the globe, this is to hedge against sovereign risk. Right now, everything I own is tied to the United States. What if tomorrow Obama decreed that he was nationalizing all banks and closing wallstreet and that all stocks held by private citizens will be turned over to be equally distributed to everyone?

If all your money is tied up soley in the US you'd be getting screwed in the rear without lube. But if you had assets outside the sovereignty of the US you would still have something.

Hopefully that made some sense. I'm a bit tired tonight.

mmmsc

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Re: Investing in precious metals
« Reply #10 on: February 17, 2012, 11:11:00 PM »
Gold (or any precious metal ) is not an investment but merely rank speculation. Its price is based solely on market expectations. Gold provides no internal rate of return. Unlike stocks or bonds it creates no intrinsic value through earnings growth, dividend yields and interest payments. Speculation not investment.

Dave

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Re: Investing in precious metals
« Reply #11 on: February 18, 2012, 12:59:23 AM »
Hmm. But your house is priced almost entirely on market expectations too (for instance, ours has fallen by around 30%, although I don't really care because it's almost owned outright).

So are stocks - there have been days when the market lost over 20% *during office hours*. Good luck if you need to buy an annuity and your equities are down over 50%...

I can't argue with what you say - gold is just a commodity that people buy into when they're cashing out of other asset classes like bonds and equities. That's exactly what makes it so great. In 2009 when equities went on fire sale, dropping by 25%, gold was up so strongly that it offset the equity losses (and by rebalancing, you got to swap overpriced gold for cheap equities, fantastic).

mmmsc

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Re: Investing in precious metals
« Reply #12 on: February 18, 2012, 11:38:50 AM »
The markets expectations too often have little to do with its intrinsic value. Your house has an intrinsic value to you "(for instance, ours has fallen by around 30%, although I don't really care because it's almost owned outright)."  Stocks and bonds have an intrinsic value (earnings, dividends , and interest) although the price the market applies to this value fluctuates (P/E ratio) around this value. All prices will/must return to its intrinsic value given time. Check out this link for a long view of the price of gold vs the S&P 500 and you can see in the graphs the short sightedness of these speculators.

http://www.stocks-for-beginners.com/gold-market-price.html

AdrianM

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Re: Investing in precious metals
« Reply #13 on: March 08, 2012, 01:17:56 AM »
I own gold and silver bullion an I have owned it for some time.

Why?
Because it is a "Store of Value"

That means it will buy the equivalent amount of goods now, that is would have bought, at the time I bought it.

If you want to become Mustachian don't cop out. Go do your own research and learn why people purchase gold.

My purchasing power has been preserved from
Global Government Stupidity, Theft and Devaluation.

I can't resist this one.....
http://pricedingold.com/dow-jones-industrials/

I can point to a graphs too.

What does that prove?

There are three types of Lies.

Lies, Dammed Lies and Statistics.

chrish

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Re: Investing in precious metals
« Reply #14 on: March 08, 2012, 02:40:52 AM »
I own some gold as part of an overall asset allocation strategy, similar to a "permanent portfolio". The basic idea is that gold is a "safe haven" asset that performs very well under certain market conditions, such as very high inflation, or fear of currency collapse. It is just an extra level of diversification, to protect you from losses when your stocks and bonds are falling.

See http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/ for a good discussion of the permanent portfolio

Mr Mark

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Re: Investing in precious metals
« Reply #15 on: March 08, 2012, 08:32:10 PM »

On almost all measures, a 'balanced' AA portfolio would by now be 'out' of gold (having sold the peak at ~$1600 and bought the trough in equity).

Even if you believe the 'constant PPP of gold' argument, gold is 2 - 3 x overvalued, IMHO.


arebelspy

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Re: Investing in precious metals
« Reply #16 on: March 08, 2012, 08:45:12 PM »

On almost all measures, a 'balanced' AA portfolio would by now be 'out' of gold (having sold the peak at ~$1600 and bought the trough in equity).

Even if you believe the 'constant PPP of gold' argument, gold is 2 - 3 x overvalued, IMHO.

It really depends on your asset allocation.  The permanent portfolio, which is 25% gold, would still have 25% gold.  And would have been selling as gold went up to rebalance into the other 3 assets.  And if gold goes down, it'll sell other things to buy more.

Blanket statements like "a 'balanced' AA portfolio would by now be 'out' of gold" are tough to say.
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Re: Investing in precious metals
« Reply #17 on: March 08, 2012, 09:10:32 PM »

It totally depends on that definition of a 'balanced' portfolio should have 25% gold statement. As in Browne.

I think the principal of Permanent Portfolio AA is having your portfolio distributed between liquid, uncorrelated markets, and these were, in the original 'research' stocks/bonds/cash/gold at 25% each. This strategy demonstrably outbeat each individual market for returns, etc. Fair enough.

But I interpret that diversification to a lower level.

So for me, I take the stocks %, and diversify.

I take bonds, and diversify.

I have cash, but with real interest rates at -2%, sorry, only 6 months income.

And I take "Gold" as a more general "real stuff" so include copper, other precious metals, oil, grain, food, steel, and other commodities. And what about real estate?

And on this basis - Gold versus its 'Peer Group' in a diversified Browne strategy - I'd be short on 'Gold', long on real estate, industrial commodities etc.

.

arebelspy

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Re: Investing in precious metals
« Reply #18 on: March 08, 2012, 09:20:48 PM »
Oh I'm totally a dirty market timer.  I'm very long real estate right now, and going "all in," more or less.

Just commenting on the idea that a "balanced" AA would be out of gold.  Depends on your AA, because the classic permanent portfolio wouldn't ever be "out", persay, but be rebalancing into more or less depending on if the price is falling or rising, but keeping a fairly constant percent.

FWIW, my eventual portfolio, after a rebalancing from Real Estate in 10-20 years, will likely be based on the permanent portfolio.

I think gold is way overvalued rigt now, but I'm leaning towards letting go of my personal feelings. The market being irrational longer than me being solvent and all that, so might as well ride it.
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mmmsc

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Re: Investing in precious metals
« Reply #19 on: March 08, 2012, 10:00:28 PM »
 How do you value gold?

 Exactly what are you attributing this magical "store of value" to. The price of gold rises and falls like every other commodity. A store of value, like keeping your money under the mattress(ignoring inflation for the moment), does not fluctuate with the whims of the speculating public.
 
It is true that there are practical uses for gold as in electronics,medicine, and other areas that need nonreactive elements. However the price of gold far outstrips this practical consideration. In fact it would probably be used in many more beneficial ways if the price of this commodity was any where close to being reasonable.

So why is gold "valued" as it is?

Is it because gold holds some mystical power over people or that the nation holds it as source of wealth (even they gave up on this idea) or people believe that a great discovery will cause it to become invaluable.

No?

"The Greater Fool Theory" though does provide the answers.

I will give you the point about the graph though. I did debate putting it in my post because of the ease of picking favorable start and stop times and using obfuscated variables like "DJIA in Gold grams".

I agree that true Mustachians must not cop out and do their due diligence. However they also must not become victims of fear. Investments will rise and fall with the whims of the public at large but as long as they are creating real value to people they will continue to outperform speculation over long periods.

Grigory

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Re: Investing in precious metals
« Reply #20 on: March 08, 2012, 10:04:06 PM »
Here is what Warren Buffett had to say about gold at last year's Berkshire-Hathaway convention:

"Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything. I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side… Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion dollars… you could have all the farmland in the United States, you could have about seven Exxon Mobils, and you could have a trillion dollars of walking-around money… And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally… Call me crazy, but I’ll take the farmland and the Exxon Mobils. [Gold] 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."

:))

mmmsc

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Re: Investing in precious metals
« Reply #21 on: March 08, 2012, 10:28:06 PM »
Now that is Gold :)

Mr Mark

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Re: Investing in precious metals
« Reply #22 on: March 08, 2012, 10:34:18 PM »
Yep.

It is pretty though.

Mr Mark

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Re: Investing in precious metals
« Reply #23 on: March 13, 2012, 04:10:57 PM »
There was a nice little piece in The Atlantic that pointed out how 1000g of gold bought tuition at Yale in 1900, and that, today, tuition at Yale is still 1000g of gold.

http://www.theatlantic.com/business/archive/2012/03/how-much-gold-do-you-need-to-pay-yales-tuition-the-same-as-in-1900/253873/

What the author fails to point out is that if you had cashed out that gold in 1900, & invested it in the US stock market (reinvesting all dividends, rebalancing), that original investment would now pay for 20 tuitions at Yale.


sol

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Re: Investing in precious metals
« Reply #24 on: March 13, 2012, 04:12:17 PM »
That author also failed to point out that higher education costs, much like gold prices, are in a bubble.

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Gold As a Store of Value
« Reply #25 on: March 14, 2012, 06:45:53 PM »
A Store of Value is.

A recognized form of exchange can be a form of money or currency, a commodity like gold, or financial capital. To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved.

Rather than plagiarise wiki any further
http://en.wikipedia.org/wiki/Store_of_value

Yes I am well aware of the greater fool theory of investment. But as I pointed out my reason for holding PM's is that global governments cannot print them.


mmmsc

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Re: Investing in precious metals
« Reply #26 on: March 14, 2012, 10:18:08 PM »
"To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved."

 Interesting that this does not say that you will receive the same or greater value at a latter time only that there will be predictable usefulness much like my 98 Civic.
 
 
"But as I pointed out my reason for holding PM's is that global governments cannot print them."

  It appears as if you are holding gold as an insurance policy and not as an investment. I personally do not believe it would be a great insurance policy in a collapse of the world currencies.



 This is the investment forum. Can you make money in gold? Maybe. Will I be buying? No. I do not have a problem with people diversifying to limit there short term  risk in a balanced portfolio, even though I think there are better long term methods. In the end gold creates no value for its holders or society at large. It is a commodity.

AdrianM

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Re: Investing in precious metals
« Reply #27 on: March 15, 2012, 12:08:42 AM »
ROFL

We will have to agree to disagree on this one.

unitsinc

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Re: Investing in precious metals
« Reply #28 on: April 02, 2012, 03:37:27 PM »
"But as I pointed out my reason for holding PM's is that global governments cannot print them."

  It appears as if you are holding gold as an insurance policy and not as an investment. I personally do not believe it would be a great insurance policy in a collapse of the world currencies.


If the world collapses and all economies crash, if you have some paper (stocks) saying you "own" some gold, and attempt to cash them in, I'd bet that just wouldn't go over well.

arebelspy

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Re: Investing in precious metals
« Reply #29 on: April 02, 2012, 05:21:50 PM »
"But as I pointed out my reason for holding PM's is that global governments cannot print them."

  It appears as if you are holding gold as an insurance policy and not as an investment. I personally do not believe it would be a great insurance policy in a collapse of the world currencies.


If the world collapses and all economies crash, if you have some paper (stocks) saying you "own" some gold, and attempt to cash them in, I'd bet that just wouldn't go over well.

Naturally.  I think most of the end of the world people that hold gold hold the physical asset.

Those using it as a mere inflation hedge (whether that's a good idea or not, if that's their purpose) wouldn't have a problem holding something like GLD.
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Mactrader

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Re: Investing in precious metals
« Reply #30 on: April 02, 2012, 09:32:55 PM »
"But as I pointed out my reason for holding PM's is that global governments cannot print them."

  It appears as if you are holding gold as an insurance policy and not as an investment. I personally do not believe it would be a great insurance policy in a collapse of the world currencies.


If the world collapses and all economies crash, if you have some paper (stocks) saying you "own" some gold, and attempt to cash them in, I'd bet that just wouldn't go over well.

If the world collapses I will be less concerned with my net worth and portfolio and much more concerned with the damned zombies outside!!

unitsinc

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Re: Investing in precious metals
« Reply #31 on: April 03, 2012, 10:31:06 AM »
"But as I pointed out my reason for holding PM's is that global governments cannot print them."

  It appears as if you are holding gold as an insurance policy and not as an investment. I personally do not believe it would be a great insurance policy in a collapse of the world currencies.


If the world collapses and all economies crash, if you have some paper (stocks) saying you "own" some gold, and attempt to cash them in, I'd bet that just wouldn't go over well.

If the world collapses I will be less concerned with my net worth and portfolio and much more concerned with the damned zombies outside!!

Don't worry, once the World War Z movie comes out, we'll all have a great plan to deal with the zombies....I just hope you live on the West Coast.  :P

Grigory

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Re: Investing in precious metals
« Reply #32 on: April 07, 2012, 04:33:37 PM »
Naturally.  I think most of the end of the world people that hold gold hold the physical asset.

Those using it as a mere inflation hedge (whether that's a good idea or not, if that's their purpose) wouldn't have a problem holding something like GLD.
There's a young guy who keeps posting youtube videos about copper - how to find genuine copper pennies, how to separate them, etc. He claims to have almost a ton of copper in his apartment. O_o When asked why, he said that if the civilization collapses, he'll be able to use his copper to trade for goods and services. *facepalm* A few seconds later, he admitted that he doesn't own a gun or any weapons, and implied that he doesn't anticipate any difficulties walking up to a post-apocalyptic marketplace and trading his copper for some chickens...

fiveoh

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Re: Investing in precious metals
« Reply #33 on: April 07, 2012, 09:37:44 PM »
The penny hoarders are hoping for the day it becomes legal to melt pennies for copper.   1 copper penny has about 2.5 cents worth of copper so if you can buy lots of pennies for at or close to face value... there is good profit to be made.   Of course at this point its only speculation that eventually the us gov will allow the melting of pennies for copper.....

AdrianM

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Re: Investing in precious metals
« Reply #34 on: April 28, 2012, 05:34:17 AM »
Naturally.  I think most of the end of the world people that hold gold hold the physical asset.

Those using it as a mere inflation hedge (whether that's a good idea or not, if that's their purpose) wouldn't have a problem holding something like GLD.

Just ask Gerard Celente about what happened to his paper gold holdings when MF Global went belly up
http://www.youtube.com/watch?v=9yNMW0S7S78&feature=related

This is why you take physical possession.

Enjoy

ErikZ

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Re: Investing in precious metals
« Reply #35 on: April 29, 2012, 09:34:47 AM »
Investing in metals just seems to be about protecting your money from inflation. Not buying something that produces money or expecting the that value to go up.

The value stays mostly the same, the currency is getting weaker.