Is Gold Anti-Mustachian?

[Joet]

it seems to me, backtested for the 20th century: gold has almost nothing to do with inflation

However, it does seem to respond to other stimuli, such as whether or not it is tied to a given currency. Now that that is forever gone, it has floated up a bit. Then back down. Then it had a huge speculative bubble in ~80 or so, perhaps as a result (partially) due to the 70s stagflation. Now we've had another run-up, due in part perhaps because of central bank activity or investor sentiment or who knows. It definitely looks like some downside potential here though. I suppose if gold were an actual asset class (eg commodities) we'd call that market timing. Or at least value-surmizing.

anyways heres a chart


I guess it somewhat mirrors inflation

[Kriegsspiel]

I didn't really read much of the thread, but this probably fits somewhere.

[Mr Mark]

http://www.project-syndicate.org/commentary/the-end-of-the-gold-bubble-by-nouriel-roubini

For those who'd like to hear from a respected economist on gold, there's a nice article from Nouriel Roubini.

[AdrianM]

Warren Buffett on gold:

Blah Blah Blah

Has already been covered.
But here we go again.

I wrote this a year ago.
https://forum.mrmoneymustache.com/investor-alley/gold-i-we-still-cavemen/msg10790/#msg10790

Over the last 10 years
Gold up 200%
BRK.A up 100%

This is am improvement from 1 year ago So buffet wins on a 1 year time frame
But still has a long way to go.

[Tyler]

it seems to me, backtested for the 20th century: gold has almost nothing to do with inflation

Don't forget that prior to 1971 the dollar was pegged to gold.  That's why your chart really picks up from the 70's to the present.

[arebelspy]

Over the last 10 years
Gold up 200%
BRK.A up 100%

This is am improvement from 1 year ago So buffet wins on a 1 year time frame
But still has a long way to go.

Real results during a cherry-picked time frame have very little to do with whether or not something is actually correct.  One could pick stocks with a dart and make 400% and beat both those, that doesn't make the investment strategy correct.

[AdrianM]

Over the last 10 years
Gold up 200%
BRK.A up 100%

This is am improvement from 1 year ago So buffet wins on a 1 year time frame
But still has a long way to go.

Real results during a cherry-picked time frame have very little to do with whether or not something is actually correct.  One could pick stocks with a dart and make 400% and beat both those, that doesn't make the investment strategy correct.

Not cherry picked just used the last decade, as of 03/06/2013

But feel free to show me a chart of the last decade where buffet out performed gold.

[Joet]

well he out-performed the S&P for like 40 years, and lately has been regressing to the mean a bit. Not a big surprise. Buffet's performance is nothing short of magical, imo. The only other contemporary example we have for a fund manager is Peter Lynch [Fidelity Magellan fund].

Is your point Gold has done well post-exit of the Gold Standard in the Nixon administration? Indeed it has. So lets look at that period then! Best case for gold you can find anywhere!



So with this once-in-a-lifetime event, it looks kinda like a push to me? Perhaps I dont see the initial conditions well enough. The more important question becomes: Is gold expected to perform as well as the S&P 500 moving forward? One of the reasons I dont like this chart is it ignores the S&P 500 dividends [currently 2%, historically 4-5%]

[matchewed]

Over the last 10 years
Gold up 200%
BRK.A up 100%

This is am improvement from 1 year ago So buffet wins on a 1 year time frame
But still has a long way to go.

Real results during a cherry-picked time frame have very little to do with whether or not something is actually correct.  One could pick stocks with a dart and make 400% and beat both those, that doesn't make the investment strategy correct.

Not cherry picked just used the last decade, as of 03/06/2013

But feel free to show me a chart of the last decade where buffet out performed gold.

More to the point is that the performance of Berkshire Hathaway vs. Gold over the last decade is not an argument stating whether what Buffet is saying is wrong or right. You're trying to discredit his argument by pulling a red herring. I'd be more interested in your actual points instead of your non-points.

Buffet's points -

Gold has no real utility outside of some electronics and jewelery it is just like any other commodity.

It is more of a bandwagonning or herd mentality affect rather than its actual usefulness which dictate it as an investment people flock to for "security".

Investing in businesses will make them grow and the investor rides that growth. Investing in gold gets you a certain quantity of gold... that quantity doesn't magically get bigger.

Try discussing points like that instead of the price of a single company vs the price of gold as that's a pretty useless point imo. Feel free to correct me and tell me how it even matters though.

[arebelspy]

Not cherry picked just used the last decade, as of 03/06/2013

But feel free to show me a chart of the last decade where buffet out performed gold.

And I used the last year, but feel free to show me a chart of the last year where Gold outperformed Buffet.

/eye roll

Even if it did, that doesn't prove anything.  A monkey with a dart could potentially outperform both the next year going forward and that doesn't mean I'd declare it a better investing strategy.  What it happened to do on some time period doesn't do anything but show us what performed best during that particular time period.  Aka tells us basically nothing at all.

[Tyler]

The more important question becomes: Is gold expected to perform as well as the S&P 500 moving forward?

Since I can't see the future I prefer to ask:

In what economic conditions does gold perform well, and does it make sense for me as part of a balanced (and eventually rebalanced) asset allocation?

I personally own some gold and find it a useful portion of my portfolio.  To each his own.  But IMHO comparing 100% gold to 100% stocks (or 100% bonds, REITs, whatever) is a false choice.  Diversification (however you choose to do it with your own money) is healthy.

[Mr Mark]

Using your hard earned and saved employees to buy a lump of shiny metal is what's unhealthy for your stash, that's for real.

But a good tinfoil hat always comes in handy. That way George Soros and his hyperinflation plan can't infect your brain, leaving your vital essances clear to buy gold, lots of gold, shiny shiny gold! Could Glenn Beck be wrong? /sarcastic

If you've got a mortgage or any debt, it means you're borrowing to invest in gold. An investment with zero yield.

[workathomedad]

Wow that 1980 peak sure was high! According to official CPI we'd have to hit $2,440.14 in today's dollars to match that again. That might be over priced, but we're only at $1,400 right now.

I wouldn't buy Gold hoping for outperformance, unless after careful analysis you really believe it is dramatically undervalued. It's just highly recommended to hold some if you expect high inflation, which seems likely from the Fed's ongoing QE. Did you see their recent minutes? Even the Fed-heads appear concerned.

Members of the Federal Reserve’s advisory council, which includes the Board of Governors, have expressed strong concerns over the Fed’s low-interest rate policies and its bond-purchase program, which they say could trigger unmanageable inflation and an "unsustainable bubble" in the stock and bond markets.

http://www.ibtimes.com/federal-reserve-advisory-committee-worries-about-inflation-unsustainable-bubble-stocks-bonds-1287261

[matchewed]

Or you could alternatively read the actual minutes and find out that no one says anything about unmanageable inflation - http://federalreserve.gov/aboutthefed/fac-20130517.pdf

There are potential risks associated with current policy. The Fed’s securities purchases have reduced mortgage yields and, to a lesser extent, Treasury yields. Current low bond yields are disruptive to management of fixed-income portfolios, retirement funds, consumer savings, and retirement planning. They may encourage unsophisticated investors to take on undue risk to achieve better returns. MBS purchases account for over 70% of gross issuance, causing price distortion and volatility in the MBS market. Fixed-income investors worry that attractive mortgage-backed securities are in very tight supply. Higher premium coupons carry too much exposure to prepayments, potentially led by new government support programs for housing. Many are concerned about the Fed’s significant presence in the market. They have underweighted MBS in favor of corporate, municipal, and emerging-market bonds. There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices.

[workathomedad]

Or you could alternatively read the actual minutes and find out that no one says anything about unmanageable inflation -

I didn't say anything about unmanageable inflation or write the news article. I said the fed minutes state serious concerns about their Quantitative Easy policies causing inflation and asset bubbles.

The Fed’s securities purchases have reduced mortgage yields and, to a lesser extent, Treasury yields. Current low bond yields are disruptive to management of fixed-income portfolios, retirement funds, consumer savings, and retirement planning. They may encourage unsophisticated investors to take on undue risk to achieve better returns. MBS purchases account for over 70% of gross issuance, causing price distortion and volatility in the MBS market. Fixed-income investors worry that attractive mortgage-backed securities are in very tight supply. Higher premium coupons carry too much exposure to prepayments, potentially led by new government support programs for housing. Many are concerned about the Fed’s significant presence in the market. They have underweighted MBS in favor of corporate, municipal, and emerging-market bonds. There is also concern about the possibility of a breakout of inflation, although current inflation risk is not considered unmanageable, and of an unsustainable bubble in equity and fixed-income markets given current prices.

Yes, they think they can manage the inflation risk, but there is a serious concern about higher inflation and unsustainable bubbles. This is an important consideration for anyone currently considering additional investments in stocks and bonds.

[matchewed]

You're right you didn't directly say it. You just provided the link to International Business Times who said it. The rest of the actual report which IBTimes seemed to gloss over is that their concerns about inflation are 2-3 years out.

My point is you can spread bad financial reporting if you want. Don't get upset when someone steps in and provides the correct information and let people come to their own conclusions.

[Joet]

I think the main concern is the ~n-trillion QE/market manipulation is a inflation bomb waiting to explode. It presently has zero velocity though (isnt moving). When it does though it will probably bubble all assets, regardless. (my amateur reading). I do not know under what scenarios all this 'money' finally gets released and starts to affect prices. Not a clue.

[Mr Mark]

You're right you didn't directly say it. You just provided the link to International Business Times who said it. The rest of the actual report which IBTimes seemed to gloss over is that their concerns about inflation are 2-3 years out.

My point is you can spread bad financial reporting if you want. Don't get upset when someone steps in and provides the correct information and let people come to their own conclusions.

+1

Did Ben Bernanke recommend gold?

(Edit)
Can FIRECalc run options of adding gold in the mix?

[mox]

I don´t belive that there is an endless growth possible in a world with limited ressources.

[grantmeaname]

I don´t belive that there is an endless growth possible in a world with limited ressources.

I don't belive lots of things about ressources. What does that have to do with this conversation?

[matchewed]

I don't believe in Santa Claus.

[sherr]

I think the main concern is the ~n-trillion QE/market manipulation is a inflation bomb waiting to explode. It presently has zero velocity though (isnt moving). When it does though it will probably bubble all assets, regardless. (my amateur reading). I do not know under what scenarios all this 'money' finally gets released and starts to affect prices. Not a clue.

I agree generally, but I don't think "bubble" is the right word. A bubble is an over-valuation that eventually corrects, i.e. it will eventually "pop". A high rate of inflation just makes the money worth less permanently, and yes would affect every asset class. We shall see how all this plays out, but my personal opinion is that gold is over-valued even with the inflation rate concerns caused by QE. If you really want to protect against inflation you should buy real estate with a mortgage, not buy gold.

[grantmeaname]

A high rate of inflation just makes the money worth less permanently, and yes would affect every asset class. We shall see how all this plays out, but my personal opinion is that gold is over-valued even with the inflation rate concerns caused by QE. If you really want to protect against inflation you should buy real estate with a mortgage, not buy gold.

Or TIPS. Or equities.

[sherr]

A high rate of inflation just makes the money worth less permanently, and yes would affect every asset class. We shall see how all this plays out, but my personal opinion is that gold is over-valued even with the inflation rate concerns caused by QE. If you really want to protect against inflation you should buy real estate with a mortgage, not buy gold.

Or TIPS. Or equities.

Fair enough, but real estate with a mortgage is a double-hedge against inflation, whereas TIPS or equities are only single hedges. What do I mean? Real estate protects against inflation by:
1) the value of the real estate rises with inflation. Inflation does not change the value of real assets, just the value of the money used to buy them.
2) the value of your mortgage decreases with inflation. You owe X dollars to the bank. If suddenly massive inflation strikes and it takes X dollars to buy a candy bar (and everyone's salaries rise accordingly), you just successfully and legally bought a house with a candy bar.

You can also make it a triple-hedge by renting and:
3) raising the rent with inflation. Which is a perfectly natural thing to do, the value of living in the house is constant, the value of the rent should remain constant as well.

Caveat: if you are retired and living off of rental incomes then #2 and #3 are the same thing, so it's only a double-hedge.

Real-estate investors like Arebelspy will make out like a bandit during periods of high inflation.

[matchewed]

sherr you're ignoring all the other associated costs with real estate. Like repairs and property taxes which would also rise with inflation. Real estate is not some silver bullet to inflation. It is good but grant is right in listing more solid inflation hedges because diversity in investments will be able to ride out scenarios much better than trying to put all your eggs in mortgages.

[Joet]

Also real estate doesn't protect you from builder saturation or other macro events that could depress rents or vacancies. It doesn't protect you from having to spend to keep up with minimum amenities or parking availability or other dynamic changes that can affect values. Of course one option is geographical distribution

[workathomedad]

I think the main concern is the ~n-trillion QE/market manipulation is a inflation bomb waiting to explode. It presently has zero velocity though (isnt moving). When it does though it will probably bubble all assets, regardless. (my amateur reading). I do not know under what scenarios all this 'money' finally gets released and starts to affect prices. Not a clue.

Exactly! I have no idea either.

[workathomedad]

TIPs are the fox guarding the henhouse.

[workathomedad]

We should note that Bernake's primary motivation is to avoid deflation, so inflation is inevitable. We're simply trying to guess how high it will be.

With the government seriously in debt, it has some major motivations for playing with CPI and under-reporting inflation:

1. Higher tax revenue on both real gains and inflation simply increasing the reported value of assets.
2. Hidden tax on hoarders/savers. Leave your money sitting in cash and the government can inflate some of its value into paying for current spending.
3. Lowering the cost of debt repayment to creditors. Keep interest rates extremely low and report low inflation to creditors.
4. Lowering the cost of benefit and entitlement programs. If inflation underreported they can keep the required benefit increases down.
5. Inflating the GDP. Unreported inflation makes the economy look bigger.
6. Help the appearance of recovery. Unreported inflation makes it look like the economy is doing better. (This could explain why unemployment is very high despite recovery).

There's probably more, but that's off the top of my head.

[matchewed]

The government is not manipulating the CPI in any way other than what they have been doing since before the recession and QE. Since you're making the claim they are why don't you provide proof that the information from BLS is wrong or manipulated in such a way that it is suspect?

If you have no idea what the impact of QE will be in the future why don't you post that instead of links to reports on what some crap website says about what the actual experts are saying?

Until that excess money gets into the hands of the consumer there is no real threat of inflation. Currently it is sitting in the coffers of large companies. How is that money just sitting there not being put into circulation raising the price of gas for you right now? The drive of QE is for the banks to lend out money and to aid in banks de-leveraging. Looking at most of the economic reports of low growth and very slow job growth that money is not being used. So why do you think inflation is being under reported. I don't think inflation is under reported at all. It hasn't happened yet.

[sherr]

sherr you're ignoring all the other associated costs with real estate. Like repairs and property taxes which would also rise with inflation. Real estate is not some silver bullet to inflation. It is good but grant is right in listing more solid inflation hedges because diversity in investments will be able to ride out scenarios much better than trying to put all your eggs in mortgages.

I am not ignoring anything. That's like saying that by recommending equities grant is ignoring the brokerage fees, which will also rise with inflation. Yes there are associated costs, there's no such thing as a free lunch, but your returns should be greater than the costs (otherwise why would you have bought it in the first place) and if returns and costs both rise with the rate of inflation then your cash flow will rise exactly in step with the rate of inflation. Yes diversity is good, which is why I never said grant was wrong. I simply said real estate was better. I thoroughly disagree that TIPS or equities are "more solid inflation hedges."

Also real estate doesn't protect you from builder saturation or other macro events that could depress rents or vacancies. It doesn't protect you from having to spend to keep up with minimum amenities or parking availability or other dynamic changes that can affect values. Of course one option is geographical distribution

True, but we aren't talking about any of those things, we're talking about inflation. Where did I ever say that real estate was the end-all-be-all of investing? All I said was that "If you really want to protect against inflation you should buy real estate with a mortgage, not buy gold."

[matchewed]

Define better. You put out some reasons to call it a "double-hedge" or "triple-hedge", but in what way is a mortgage a better hedge than say equities? I don't think a good analysis is just the number of pros vs cons but rather a dig into those pros and cons. Pull them apart and see how and why they benefit us.

Wouldn't a stock or sector which can easily pass the price increase to their market (oil/energy companies for example) be just as good?

No one said they were better. Large inflationary periods are dangerous to FIRE, we're just trying to list some ways to mitigate that danger. I'm not sure if you can definitively say one way is better than another. Each person's situation will be different.

[Spork]

Define better. You put out some reasons to call it a "double-hedge" or "triple-hedge", but in what way is a mortgage a better hedge than say equities? I don't think a good analysis is just the number of pros vs cons but rather a dig into those pros and cons. Pull them apart and see how and why they benefit us.

I'll bite:  You can live in it. 

And, in case of extreme black-swan event (everything goes to shit) -- the utility of a house hasn't changed.  You can still live in it (even if the value has gone to hell).

[Joet]

the utility can dramatically change if you cant find a renter, or worse---leveraged, you cant cover costs. I presume we arent talking about your primary residence here, obviously

also I'm not really sure that real estate as a single/double/triple/penta-helix hedge against inflation holds water either. Historically real estate matches inflation: so we're good at a first pass. However real estate is presently at ++generational multiples of income out of the ordinary and seems to still be in the process of correcting in spite of our banksters best efforts to hide supply. Sure in the long run it probably works out.

Add to that the leverage factor and it seems to be a fairly muddy picture to claim that real estate is your inflation hedge. Sure it tends to do all right---with certain caveats. Such as a median place in a median area with a known stable supply of renters and all that.

Truth to be told I believe equities [with similar caveats] are more likely to insulate vs inflation in the long run. Throw in a mix of Tbills [incl TIPs] and some foreign equities and it sounds even better.

[matchewed]

Define better. You put out some reasons to call it a "double-hedge" or "triple-hedge", but in what way is a mortgage a better hedge than say equities? I don't think a good analysis is just the number of pros vs cons but rather a dig into those pros and cons. Pull them apart and see how and why they benefit us.

I'll bite:  You can live in it. 

And, in case of extreme black-swan event (everything goes to shit) -- the utility of a house hasn't changed.  You can still live in it (even if the value has gone to hell).

Fair enough but in that context of shit hitting the fan someone else's gun can decide whether your house is yours or if you can live in it.

How about in the context of inflation or hyperinflation?

[Joet]

how about this for 'inflation' protection :)
kids. lots and lots of kids! They all get jobs, pay their way through school, etc!

*I would also like a unicorn ranch to go with my magic wand against inflation

[matchewed]

Stop confusing retirement planning with inflation dammit.

[Joet]

I thought this was a gold thread

[matchewed]

Sorry my comment was supposed to be a joke about kids being a retirement plan. Not meant to be taken seriously. :)

[Joet]

but really isnt that the best plan of all? (5+ kids)

[sherr]

Define better. You put out some reasons to call it a "double-hedge" or "triple-hedge", but in what way is a mortgage a better hedge than say equities? I don't think a good analysis is just the number of pros vs cons but rather a dig into those pros and cons. Pull them apart and see how and why they benefit us.

Wouldn't a stock or sector which can easily pass the price increase to their market (oil/energy companies for example) be just as good?

Well what I really mean by better is more profitable. Equities and gold and other things can easily be an inflation hedge. Most inflation hedges can be expected to keep their value in spite of inflation, and maybe in some cases (like equities if the company is still growing) can be expected to grow in absolute value.

Leveraged real estate is different in that it is virtually guaranteed to increase in absolute value in inflationary times. The value of the estate keeps pace with inflation on average, so that already puts it right up there with gold. But then on top of that the real value of the money you owe on the mortgage is decreasing with inflation, which means real wealth is being transferred to you. Add to that rental income that also adjusts for inflation, and you have a real-wealth making machine in inflationary times.

the utility can dramatically change if you cant find a renter, or worse---leveraged, you cant cover costs. I presume we arent talking about your primary residence here, obviously

Well sure something can always go wrong, but if you set reasonable rents in a reasonable area it's really not to difficult to find good renters.

also I'm not really sure that real estate as a single/double/triple/penta-helix hedge against inflation holds water either. Historically real estate matches inflation: so we're good at a first pass. However real estate is presently at ++generational multiples of income out of the ordinary and seems to still be in the process of correcting in spite of our banksters best efforts to hide supply. Sure in the long run it probably works out.

So your argument is that real estate is not a hedge against inflation because you think the current market is over-priced? Believing the market is in a bubble is a fine reason not to buy in at the moment, but that doesn't mean anything I've said is untrue.

Add to that the leverage factor and it seems to be a fairly muddy picture to claim that real estate is your inflation hedge. Sure it tends to do all right---with certain caveats. Such as a median place in a median area with a known stable supply of renters and all that.

Actually leverage is your friend in a big way during inflation. In the same way that non-inflation-protected savings loose value during inflation, non-inflation-protected debt transfers value to you during inflation. And if you can get interest rates in the 3 and 4% range like you can in the US today (which is below the average rate of inflation btw, meaning the bank is actually paying you to borrow money if the averages hold out!) then it's even better.

Truth to be told I believe equities [with similar caveats] are more likely to insulate vs inflation in the long run. Throw in a mix of Tbills [incl TIPs] and some foreign equities and it sounds even better.

Well you can certainly do that, I won't twist your arm. But consider this extreme example:

You buy a house for $100k and finance 100% of it with a mortgage. Considering no other factors, you have a real net worth of 0. We suddenly a ridiculously high one-year-only inflationary period of 100% inflation. That means that any money you had before is now only worth half of what it was, and presumably people's salaries have all doubled.

The house itself is a real asset, like gold, so it's value should remain constant in real terms. The house is now "worth" $200k in after-inflation dollars.

The number of dollars you own on the mortgage (we'll assume you didn't have to make any payments or be charged interest the first year for simplicity) has not changed. You still owe $100k, and your net worth is now $100k thanks to the value of the house increasing. But since inflation has caused everything to double, both how much things cost and how much people make, real value of that debt has halved. It is twice as easy to pay that off as it was before. So while you don't see the effect on your instantaneous net worth, in reality you can say you've gained more real wealth over the lifetime of the loan thanks to being able to pay off your mortgage with cheaper dollars. In fact, you've saved half of the real value of the mortgage, so have gained $50k in real dollars over the lifetime of the loan thanks to inflation. The bank loaned you $100k pre-inflation dollars and you only had to pay them back the equivalent of $50k pre-inflation dollars.

If you want you can add to that picture renters who's rent you raise with inflation, and you have yet again another hedge. Show me another asset class that transfers that much real wealth to you just from inflation, and I'll agree that real estate is not the king of inflation hedges.

[Joet]

wow nice counterpoints: there is substantial systemic risk to landlording regarding underlying housing values and various other macro factors [employment, behavior, etc]. If you think that exempts you from the goal of "protecting oneself from inflation", lets just agree to disagree. Also I'm not really sure you can guarantee that housing (or any unique sector, really) will auto-magically rise with the CPI linearly. Getting back to more salient supply/demand and employment issues, primarily.

[Mr Mark]

sherr you're ignoring all the other associated costs with real estate. Like repairs and property taxes which would also rise with inflation. Real estate is not some silver bullet to inflation. It is good but grant is right in listing more solid inflation hedges because diversity in investments will be able to ride out scenarios much better than trying to put all your eggs in mortgages.

OMG this thread has tangentialised a bit. I thought the issue was gold, but i guess we morphed into inflation and real estate...

I still insist the only answer  to the OP "Is Gold Mustashian"? is :
- No.
- BUT, you could use some (or all) of my IMHO recommended maximum  5% of your large stash to  'do what you f&*kin want' asset allocation catagory to buy gold. Its your money, and I've always said a small part can be used to pursue your (probably highly non-economic yield) dreams.

Gold is a bad investment. It doesnt protect against inflation. But I'll defend your right to gamble away 5% of your stash on principal. While pointing out that if (as a true inflation hedge, guaranteed by the Government) you have (as you should if you can) a 30 year nominal terms fixed rate mortgage, you have a 3.5% cost of capital, and so you are borrowing money to buy whatever is in that 5% 'do what you want' allocation.

Gold is pretty stupid, IMHO.

[AdrianM]

What a tangent,

I am also with MR Mark on is gold anti mustachian. No

I invest following the idea of a permanent portfolio
So have 25% gold and am adding more now when have had a 50% correction since the GFC correction.
Selling some of those high flying stocks, since they hit all time highs.

P.S. I am contrarian so I love it when an asset is out of favour with the crowd.

[grantmeaname]

How could you possibly construe gold as "out of favor with the crowd" right now?

[AdrianM]

Just listen to the number of people saying gold is bad, gold is going down, gold is an unproductive asset.

[grantmeaname]

In the investing public, or here? I think gold bugs outnumber skeptics in the investing public, even if not here.

[sherr]

In the investing public, or here? I think gold bugs outnumber skeptics in the investing public, even if not here.

I'd probably disagree, I think gold bugs are a small but vocal minority.

[arebelspy]

Just listen to the number of people saying gold is bad, gold is going down, gold is an unproductive asset.

It's still getting way more hype than negativity right now, IMO.

As it continues to drop, that will change.  Buying right now, thinking you're a contrarian, is a risky move, but best of luck to you.

At least you're rebalancing according to strict rules based on your AA, that says quite a bit for you, in my opinion.

[Spork]

Just listen to the number of people saying gold is bad, gold is going down, gold is an unproductive asset.

It's still getting way more hype than negativity right now, IMO.

It definitely is.  And, IMO, that is the international sign of  "get the hell out of here."  By the time the masses are "jumping in" is the time to "jump out."  When you can't turn on the TV without seeing a "buy gold" commercial, you know we're near (if not at) the top.