Author Topic: Precious Metals  (Read 64110 times)

Radagast

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Re: Precious Metals
« Reply #500 on: April 23, 2020, 07:27:22 PM »
Seems weird to me that a comparison is being drawn between a company that extracts a material and a finished product that stores value.  Maybe I've got the interpretation wrong.
Why? In the oil thread there was lots of comparisons to producers, storage companies, transporters, etc. If this is investor alley rather than collector alley, then gold miners will be affected by the price of gold as follows. Say gold is $1200/oz, and a mine produces it for a cost of $1,000/oz. The price rises to $1600, suddenly the same mine is making 3x more money on the same amount of gold --> a 33% gold price increase caused a 300% increase in mine profit. So in the short term producers are very sensitive to the price of metal. In reality they have a lot of room to adjust costs. If metal prices get very high they will mine lower grade or more difficult ore, expand exploration projects, and buy new equipment. If metal prices drop they will switch to higher grade ore, eliminate the exploration department, and not buy any new equipment. So it would not be as extreme as the example, but still should follow the metal with magnified movements.

Wrenchturner

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Re: Precious Metals
« Reply #501 on: April 23, 2020, 09:16:44 PM »
Seems weird to me that a comparison is being drawn between a company that extracts a material and a finished product that stores value.  Maybe I've got the interpretation wrong.
Why? In the oil thread there was lots of comparisons to producers, storage companies, transporters, etc. If this is investor alley rather than collector alley, then gold miners will be affected by the price of gold as follows. Say gold is $1200/oz, and a mine produces it for a cost of $1,000/oz. The price rises to $1600, suddenly the same mine is making 3x more money on the same amount of gold --> a 33% gold price increase caused a 300% increase in mine profit. So in the short term producers are very sensitive to the price of metal. In reality they have a lot of room to adjust costs. If metal prices get very high they will mine lower grade or more difficult ore, expand exploration projects, and buy new equipment. If metal prices drop they will switch to higher grade ore, eliminate the exploration department, and not buy any new equipment. So it would not be as extreme as the example, but still should follow the metal with magnified movements.
Good points here.

vand

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Re: Precious Metals
« Reply #502 on: April 24, 2020, 03:34:27 AM »
Annual gold production is one of those things that tends to be pretty stable even despite fluctuating gold prices. It isn't easy for production to ramp up quickly to respond to demand in the same way that the energy sector can, and producers tend to hedge to offset falling prices rather than just shutting down production.  This predictable new supply also keeps the total above ground stock very stable and predictable.


BicycleB

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Re: Precious Metals
« Reply #503 on: April 24, 2020, 07:17:10 AM »
^Good comment, @vand! Helps for my general understanding, as well as pondering metal vs miners.

@Radagast, I like your reasoning but have questions about the fundamentals. You appear to assume that miners' long term price varies in proportion to gold, so that dividends produce a 1 to 1 variance (an advantage) compared to gold. But don't miners have many differences from gold itself, enough differences that they could have a long term performance quite different from gold itself?
Yes, definitely, and the charts on this page show it. It will be dictated by gold price and investor sentiment. It will only work out over the very long term, for example from 1960 to 2020, which is about what it has done over that time and how far back it looks like you need to go. But, that works both ways. If there is a sustained period where gold drops extremely low then gold miners could actually have a 100% loss, compared to only a 90% loss for metal owners. Barring that, miner returns should be a magnified version of the metal, with some tracking error. I doubt investors will accept long term returns lower the metal, and given the extra risk I expect they will demand more. The reason people can tolerate such low returns is the poor correlation with bonds and economy. If expectations are not met then there will be a period of reorganization and consolidation, which is exactly what we have seen from 2014-2020.

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To offer two examples, increasing scarcity of minable gold could hamper miners and favor gold; or improved tech could provide an advantage for miners while producing a decrease in gold price. Similarly, business expenses could be such that at current stock prices, the return before dividends is 1% less than the return of gold itself, so that adding 1% dividends makes the return equal.
Yup sure, it should play out like any commodity producer cycle. Prices rise, producers overextend, a glut ensues, prices collapse, many producers go bust, the others reorganize, prices rise, new technology and new resources emerge, producers overextend, repeat... However, it is my guess that right now and for the past few years gold producers are at their strongest relative to the metal since at least the mid 80's.

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What is the basis for assuming that dividends haven't already been part of the price calculations?
If you look at my PV link https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&showYield=false&reinvestDividends=true&benchmark=-1&benchmarkSymbol=%5EGOLD&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=FKRCX&allocation1_1=100&symbol2=OPGSX&allocation2_2=100&symbol3=FSAGX&allocation3_3=100
...you will see that miners did better than the metal since the mid 80's, but the relative price chart shows them doing worse, so far as I know the discrepancy is dividends. Is that the question you were asking?

Not exactly, but reading the overall reply, I think it's answered. Also, thanks for the chart!

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How do we know that miners' underlying long term yield is gold price + dividends?
We don't :) That is my own (somewhat studied) guess.

Great answers. Much appreciated, @Radagast.

My personal takeaway is something like "If I get around to properly allocating my portfolio this summer, I think I'm putting at least half of the gold portion in miners." This is from someone with no gold at present, unless there are miners lurking in my index funds.
« Last Edit: April 24, 2020, 07:47:54 AM by BicycleB »

big_owl

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Re: Precious Metals
« Reply #504 on: April 24, 2020, 11:18:05 AM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website. 

Radagast

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Re: Precious Metals
« Reply #505 on: April 24, 2020, 06:10:54 PM »
My personal takeaway is something like "If I get around to properly allocating my portfolio this summer, I think I'm putting at least half of the gold portion in miners." This is from someone with no gold at present, unless there are miners lurking in my index funds.
Seems reasonable. I keep 5% of my portfolio in ZROZ (25-30 year zero coupon treasury bonds) and 5% in RING (gold miner ETF) since 2016 because they give me effective exposure of about 15% each to gold prices and bond prices, but without needing to devote that much space to them because they are pretty scary and have low expected returns individually. Eventually I plan to expand those to be more defensive, and would possibly add 5% shiny coins and 5% long term TIPS, but that is for Futureme to decide. If you are looking for more research, the "guru" who recommends gold equity is Bill Bernstein who has consistently done so in The Intelligent Asset Allocator, The Four Pillars of Investing, Rational Expectations, and Deep Risk. Of course I note that all of those books came out during what I would call a bubble in gold equity. But hey, I bet not a single person spoke highly of gold bullion as an investment between 1996 and 2007 and since then they can't shut up. If we didn't learn about different investment options in a bubble, then we would never learn about them at all.

celerystalks

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Re: Precious Metals
« Reply #506 on: April 28, 2020, 09:05:10 PM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

How much gold? Where was this boating accident? Coordinates?

jojoguy

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Re: Precious Metals
« Reply #507 on: April 29, 2020, 12:43:54 AM »
I just keep the silver that I overpaid for 10 years ago when prices were jumping sky high and save it for a rainy day.

dougules

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Re: Precious Metals
« Reply #508 on: April 29, 2020, 11:16:18 PM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

TomTX

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Re: Precious Metals
« Reply #509 on: April 30, 2020, 06:26:41 PM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

Sure I can. Use the dividends to pay for a new implant/crown/whatever.

maizefolk

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Re: Precious Metals
« Reply #510 on: April 30, 2020, 06:33:43 PM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

Sure I can. Use the dividends to pay for a new implant/crown/whatever.

On top of that, stocks like DDD, make the teeth without you having to do any work at all.

https://www.3dsystems.com/industries/dental

ice_beard

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Re: Precious Metals
« Reply #511 on: May 04, 2020, 11:51:56 AM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

Don't laugh but a portion of my PM holdings is in gold teeth/dental pieces.  As a hobbyist beach metal detectorist, I find gold teeth, implants and grills on the semi-regular.  Those are good finds. 

markbike528CBX

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Re: Precious Metals
« Reply #512 on: May 05, 2020, 07:19:27 AM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

Don't laugh but a portion of my PM holdings is in gold teeth/dental pieces.  As a hobbyist beach metal detectorist, I find gold teeth, implants and grills on the semi-regular.  Those are good finds.
Winner for creepiest post of the day.    WTF, metal comes out of peoples heads?  Do you go to the Mobs narc-punching beach? No, don't answer that question, forget I asked.

ice_beard

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Re: Precious Metals
« Reply #513 on: May 05, 2020, 11:20:59 AM »
No, regular beaches in California.  People swimming in the water have things fall off and apparently out of them some times.  Gold teeth are one of them.  I find rings much more often but I usually find one or two gold teeth a year.  I have found three "grills" too.  Granted those were all found at more "urban" beaches.  Gangsters wanna go to the beach and swim too ya know. 

appleshampooid

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Re: Precious Metals
« Reply #514 on: May 05, 2020, 11:56:07 AM »
Premiums seem to be returning to more ~normal levels and stocks are returning at a lot of online dealers. I bought some British sovereigns which I had been coveting for some time as a <1oz gold coin.

vand

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Re: Precious Metals
« Reply #515 on: May 08, 2020, 09:32:37 AM »
Has there been a better performing sector than Big Tech in the last few years??

Yes.. the dready old gold miners has now beaten the might of Silicon Valley juggernaut over the last 1, 2 and nearly 3 year.

2yr GDX/VGT: http://schrts.co/GXQictmr

TomTX

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Re: Precious Metals
« Reply #516 on: May 08, 2020, 04:59:35 PM »
vand: You seem to be trying super hard.

Wrenchturner

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Re: Precious Metals
« Reply #517 on: May 08, 2020, 07:42:23 PM »
vand: You seem to be trying super hard.

I think he/she makes good points!

waltworks

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Re: Precious Metals
« Reply #518 on: May 09, 2020, 10:05:02 AM »
vand: You seem to be trying super hard.

I think he/she makes good points!

They are the same points Vand would make regardless of the circumstances, though, as far as I can tell. The extreme loss-averse mindset is really damaging for your prospects in the long run, historically.

-W

vand

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Re: Precious Metals
« Reply #519 on: May 10, 2020, 07:02:07 AM »
vand: You seem to be trying super hard.

I think he/she makes good points!

They are the same points Vand would make regardless of the circumstances, though, as far as I can tell. The extreme loss-averse mindset is really damaging for your prospects in the long run, historically.

-W

For everything there is a season - I am not a perma bull or a perma bear on gold or anything.

Being permanently wedded to a single position or investment idea is really damaging for your prospects in the long run.

There will come a day when I will look at gold and consider it fully or overvalued and want to own less of it. However given the forces at work in the world today I still take the opposite view - that gold is far more undervalued than most other asset classes.

At the end of all great bull markets the world is an almost unrecognisable place to what it looked like at the start. This secular gold bull market has been running for 20 years now, and by the time its finished, which might easily be another 20 years, the world will be much changed again.

Stay on the sides. I don't really care TBH. All said I'd rather be on board during a bull market than on the sides, but I guess some people would rather miss out than have to change their world view.

waltworks

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Re: Precious Metals
« Reply #520 on: May 10, 2020, 02:19:24 PM »
I'm not on the sidelines, I'm investing my same $1500 a week, just like always. I'm just investing for 30+ year time horizons, so I'm uninterested in gold.

-W

celerystalks

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Re: Precious Metals
« Reply #521 on: May 10, 2020, 03:58:32 PM »
I'm not on the sidelines, I'm investing my same $1500 a week, just like always. I'm just investing for 30+ year time horizons, so I'm uninterested in gold.

-W

Why so short sighted?

 I’m investing for the next 500 years.  That should set up for the next 25 generations of descendants, give or take. Gold is one of few sure fire ways to preserve wealth for a couple of centuries.  So I have an allocation to gold.

big_owl

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Re: Precious Metals
« Reply #522 on: May 10, 2020, 05:33:44 PM »
i'm going back to my original prognostication (bloviating?).  You can shit on gold all you want, but I'm telling you, when it comes to wealth there are few things more satisfying than taking your gold coins and clanking them together in your hands while you drool over that lusty sheen.  Add in some silver coins and the sound is even better.  Now, take that and add in some guns and ammo...nothing better.  That's what I used to do in the old days.  Guns were also lost in the canoeing accident.  To this day it keeps me up at night knowing the loss I incurred.


meghan88

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Re: Precious Metals
« Reply #523 on: May 10, 2020, 07:02:24 PM »
Having physical gold is fun. Before we lost ours in the unfortunate boating accident a few years back it was a lot of fun to take out the gold coins and hold them all in your hands and drool over them. Much more fun than looking at stock values on a website.

Plus you can't use stocks to make teeth.

Don't laugh but a portion of my PM holdings is in gold teeth/dental pieces.  As a hobbyist beach metal detectorist, I find gold teeth, implants and grills on the semi-regular.  Those are good finds.
Winner for creepiest post of the day.    WTF, metal comes out of peoples heads?  Do you go to the Mobs narc-punching beach? No, don't answer that question, forget I asked.

LMFAO.  Thanks for the visual.

waltworks

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Re: Precious Metals
« Reply #524 on: May 10, 2020, 07:41:42 PM »
I'm not on the sidelines, I'm investing my same $1500 a week, just like always. I'm just investing for 30+ year time horizons, so I'm uninterested in gold.

-W

Why so short sighted?

 I’m investing for the next 500 years.  That should set up for the next 25 generations of descendants, give or take. Gold is one of few sure fire ways to preserve wealth for a couple of centuries.  So I have an allocation to gold.

Actually that is roughly my horizon. I figure we'll either be extinct or in space (there is a LOT of Ag floating around...) by then.

Hence no interest in glod.

_W

Buffaloski Boris

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Re: Precious Metals
« Reply #525 on: May 10, 2020, 08:02:52 PM »
i'm going back to my original prognostication (bloviating?).  You can shit on gold all you want, but I'm telling you, when it comes to wealth there are few things more satisfying than taking your gold coins and clanking them together in your hands while you drool over that lusty sheen.  Add in some silver coins and the sound is even better.  Now, take that and add in some guns and ammo...nothing better.  That's what I used to do in the old days.  Guns were also lost in the canoeing accident.  To this day it keeps me up at night knowing the loss I incurred.

Those canoeing accidents are a bear. Seems to have been a rash of them the last several years. Maybe we need some PSAs on the dangers of canoeing with barbaric tools and relics?

waltworks

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Re: Precious Metals
« Reply #526 on: May 10, 2020, 08:21:27 PM »
i'm going back to my original prognostication (bloviating?).  You can shit on gold all you want, but I'm telling you, when it comes to wealth there are few things more satisfying than taking your gold coins and clanking them together in your hands while you drool over that lusty sheen.  Add in some silver coins and the sound is even better.  Now, take that and add in some guns and ammo...nothing better.  That's what I used to do in the old days.  Guns were also lost in the canoeing accident.  To this day it keeps me up at night knowing the loss I incurred.

Those canoeing accidents are a bear. Seems to have been a rash of them the last several years. Maybe we need some PSAs on the dangers of canoeing with barbaric tools and relics?

If we keep losing doubloons out of canoes at this rate, there will be a Scrooge McDuck pool crisis. Then you'll *really* see the price of gold jump!

-W

MustacheAndaHalf

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Re: Precious Metals
« Reply #527 on: May 16, 2020, 01:26:04 AM »
I don't own gold, but have thought about it in the past for it's low correlation to stocks and bonds.

For those deciding between bonds and gold, bond yields are near historic lows right now.  Their expected interest payments are low, and a rise in rates pushes the value of bonds down.  Switching from bonds to gold gives up less than it usually would.

vand

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Re: Precious Metals
« Reply #528 on: May 16, 2020, 03:48:07 AM »
I'm not on the sidelines, I'm investing my same $1500 a week, just like always. I'm just investing for 30+ year time horizons, so I'm uninterested in gold.

-W

Why so short sighted?

 I’m investing for the next 500 years.  That should set up for the next 25 generations of descendants, give or take. Gold is one of few sure fire ways to preserve wealth for a couple of centuries.  So I have an allocation to gold.

Actually that is roughly my horizon. I figure we'll either be extinct or in space (there is a LOT of Ag floating around...) by then.

Hence no interest in glod.

_W

For someone with no interest in gold, you seem to have an unusually keen interest in this thread :)

vand

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Re: Precious Metals
« Reply #529 on: May 16, 2020, 03:50:16 AM »
Golddiggers vs clickbaiters, last 3 years:


TomTX

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Re: Precious Metals
« Reply #530 on: May 16, 2020, 08:28:22 AM »
"I'm so high on gold that I quote myself at the bottom of every post" -vand

waltworks

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Re: Precious Metals
« Reply #531 on: May 16, 2020, 08:56:13 AM »
For someone with no interest in gold, you seem to have an unusually keen interest in this thread :)

I have interest in humor/goldbugs. Also keeping noobs from thinking glod is a good idea.

-W

Buffaloski Boris

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Re: Precious Metals
« Reply #532 on: May 16, 2020, 09:11:10 AM »
@vand

I’m curious. What’s your thoughts on the proportion of “barbaric relics” one should hold in their portfolio? In spite of the inherent risk of boating accidents that ownership of it seems to attract.

vand

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Re: Precious Metals
« Reply #533 on: May 16, 2020, 11:05:43 AM »
@vand

I’m curious. What’s your thoughts on the proportion of “barbaric relics” one should hold in their portfolio? In spite of the inherent risk of boating accidents that ownership of it seems to attract.

This may sound like dodging the question, but I'm not a big believer in having fixed asset allocation percentages. I think its smarter to be overweight in sectors where you see the most attractive risk/return.  Whether that is gold, equities, bonds or some other alternative asset class or subclass.

Of course, to have an opinion on an asset's risk/return profile is largely a macro-call, so you need to leave you JL Collins hat at home, put on your active investor's hat, and be prepared to have an opinion on things that affect asset prices.

With all that said, if someone wasn't particularly interested in following MACD on the S&P or interest rate futures I would.. first slap them across the face and tell them to wash their damn mouth out with soap and water.. and then tell about the Permanent Portfolio that has a 25% gold allocation. This is a perfectly sound strategy for every hands-off invested who has no idea what their risk tolerance is and doesn't know what they don't know.  You can tweak as much as you like from there once you are up and running.

I think a 10%-20% allocation is shown to have historically done a very good job of improving risk adjusted returns for a portfolio. I think I'm around 30% currently, would be happy to adjust this to anywhere between 5-40% depending on how attractive I consider in relation to other asset classes, and I consider my allocation to asset classes similarly, eg bonds I think I'm very underweight at about 6% as I consider them very unattractively priced.
« Last Edit: May 16, 2020, 11:07:33 AM by vand »

vand

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Re: Precious Metals
« Reply #534 on: May 16, 2020, 11:19:03 AM »
For someone with no interest in gold, you seem to have an unusually keen interest in this thread :)

I have interest in humor/goldbugs. Also keeping noobs from thinking glod is a good idea.

-W

Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

TomTX

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Re: Precious Metals
« Reply #535 on: May 16, 2020, 11:39:39 AM »


Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

Tsk, tsk. Both cherry picking dates and mystical knowledge of the future.

Gold bugs really are special.

ice_beard

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Re: Precious Metals
« Reply #536 on: May 16, 2020, 11:54:10 AM »
I actually saw an add in a print mailer (yes, I've gotten so bored at times, I'm looking through all the junk mail!) for this...  golden eagle at "cost".  https://nationwidecoins.com/product/government-issued-1-oz-50-gold-american-eagles-at-cost-copy/

There are a few catches...  first, it's not spot, but the premium is the smallest I've seen in months.  When I bought it was basically spot + $15.  Second, you can only buy 1 oz at this price and it's an unknown year.  Third, the shipping takes a long time, like 2-3 weeks via FedEx but that doesn't really matter.  Fourth, to actually order involves them calling you on the phone.  They gave a brief pitch about some graded coins they have which was short and to the point and easy to decline.  Might be a good deal if you are into graded coins.  I am not. 

They accepted a credit card too with no extra fee (unheard of right?).  I scored 1 oz for $1725 all in.  Of course it hasn't arrived so I can't completely say if this was a good deal, but an oz at that price now is a good deal. 

Silver stocks had a nice bump on Friday.  My little silver mine hedges were up 18 and 12% for the day. 

Buffaloski Boris

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Re: Precious Metals
« Reply #537 on: May 16, 2020, 12:26:02 PM »
@vand

I’m curious. What’s your thoughts on the proportion of “barbaric relics” one should hold in their portfolio? In spite of the inherent risk of boating accidents that ownership of it seems to attract.

This may sound like dodging the question, but I'm not a big believer in having fixed asset allocation percentages. I think its smarter to be overweight in sectors where you see the most attractive risk/return.  Whether that is gold, equities, bonds or some other alternative asset class or subclass.

Of course, to have an opinion on an asset's risk/return profile is largely a macro-call, so you need to leave you JL Collins hat at home, put on your active investor's hat, and be prepared to have an opinion on things that affect asset prices.

With all that said, if someone wasn't particularly interested in following MACD on the S&P or interest rate futures I would.. first slap them across the face and tell them to wash their damn mouth out with soap and water.. and then tell about the Permanent Portfolio that has a 25% gold allocation. This is a perfectly sound strategy for every hands-off invested who has no idea what their risk tolerance is and doesn't know what they don't know.  You can tweak as much as you like from there once you are up and running.

I think a 10%-20% allocation is shown to have historically done a very good job of improving risk adjusted returns for a portfolio. I think I'm around 30% currently, would be happy to adjust this to anywhere between 5-40% depending on how attractive I consider in relation to other asset classes, and I consider my allocation to asset classes similarly, eg bonds I think I'm very underweight at about 6% as I consider them very unattractively priced.

It’s not a dodge at all. If assets aren’t favorably priced now (e.g. SP 5+495 and bonds), they probably will be in the future.  Buy what is favorably priced. I don’t happen to see much right now. Foreign to the US equities is about all I can think of.  Maybe Ag. Maybe 6 months ago for Au. You might have a different perspective on that.

maizefolk

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Re: Precious Metals
« Reply #538 on: May 16, 2020, 12:52:26 PM »
Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

Over the last twenty years, huh? Any particular reason you picked specifically 20 years?


waltworks

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Re: Precious Metals
« Reply #539 on: May 16, 2020, 12:56:37 PM »
Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

That's some quality cherrypicking - the lowest price for gold since the late 70s, with the biggest stock bubble ever... yeah, it sure did. Outside of that year or two, though, you are incorrect.

I'll give you a cherrypick that's more fun. If, in 1976 (the year of my birth, and early on in the period when owning gold was legal again) my parents had purchased baby Waltworks an ounce of gold for $133.77, today I'd have something like $1700, assuming I paid nothing to store it and didn't  lose it while canoeing. Not bad!

Oh, but wait...

If they had stuck $133.77 into an S&P index fund and never touched it, I'd have $10,617.

Feel free to try some other years. Other than the tech crash (if you invested a lump sum), you're never going to win with gold. It's not even close.

-W


vand

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Re: Precious Metals
« Reply #540 on: May 16, 2020, 01:02:13 PM »
Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

That's some quality cherrypicking - the lowest price for gold since the late 70s, with the biggest stock bubble ever... yeah, it sure did. Outside of that year or two, though, you are incorrect.

I'll give you a cherrypick that's more fun. If, in 1976 (the year of my birth, and early on in the period when owning gold was legal again) my parents had purchased baby Waltworks an ounce of gold for $133.77, today I'd have something like $1700, assuming I paid nothing to store it and didn't  lose it while canoeing. Not bad!

Oh, but wait...

If they had stuck $133.77 into an S&P index fund and never touched it, I'd have $10,617.

Feel free to try some other years. Other than the tech crash (if you invested a lump sum), you're never going to win with gold. It's not even close.

-W

Yeah yeah, all bad investors fall back on "long term averages".
The ONLY thing that matters is the growth that YOU are able to capture, not what someone did before or after.

maizefolk

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Re: Precious Metals
« Reply #541 on: May 16, 2020, 01:16:46 PM »
Yeah yeah, all bad investors fall back on "long term averages".
The ONLY thing that matters is the growth that YOU are able to capture, not what someone did before or after.

I've been investing significant money in the stock market for about a decade (since 2010/11). As show above in every single year I've captured more value by putting that money into stocks and leaving it there than into gold and leaving it there.

If I was in my sixties and had been investing for 40 years, in 35 of those years I would have captured more value by putting my money into stocks and leaving it there than into gold and leaving it there.

If you bought gold at no other time than for the five years right at the start of the 21st century where it allowed you to capture more value than putting that same money into the stock market, congratulations, it sounds like you made an excellent and prescient investing decision.

waltworks

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Re: Precious Metals
« Reply #542 on: May 16, 2020, 01:34:23 PM »
LOL, "bad investors fall back on long term averages".

I'd say, that when I'm done investing, my long term average is what I'll be interested in, actually.

Like Maizeman said, if you can predict the market and know when to buy gold (or stocks) that's awesome. Given the track record,  I'll err on the side of buying something that most likely comes out ahead over the long term, thanks.

-W

Davnasty

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Re: Precious Metals
« Reply #543 on: May 16, 2020, 01:40:38 PM »
Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

That's some quality cherrypicking - the lowest price for gold since the late 70s, with the biggest stock bubble ever... yeah, it sure did. Outside of that year or two, though, you are incorrect.

I'll give you a cherrypick that's more fun. If, in 1976 (the year of my birth, and early on in the period when owning gold was legal again) my parents had purchased baby Waltworks an ounce of gold for $133.77, today I'd have something like $1700, assuming I paid nothing to store it and didn't  lose it while canoeing. Not bad!

Oh, but wait...

If they had stuck $133.77 into an S&P index fund and never touched it, I'd have $10,617.

Feel free to try some other years. Other than the tech crash (if you invested a lump sum), you're never going to win with gold. It's not even close.

-W

Yeah yeah, all bad investors fall back on "long term averages".
The ONLY thing that matters is the growth that YOU are able to capture, not what someone did before or after.

I tried to think of a bunch of reasons and examples to refute this statement but honestly, this is a stupid argument and I think you're smart enough to know why.

I've seen you make reasonable cases for owning gold. Cherry picking data from one of the few time frames that gold outperformed stocks is not one of them.


vand

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Re: Precious Metals
« Reply #544 on: May 16, 2020, 02:05:44 PM »
Except that gold has outperformed stocks for the last 20 years or more and will continue to do so, so the joke's really on those stockholders who can only think in straight lines and wrongly believe stocks to be the best performing asset of their investing lifetime

That's some quality cherrypicking - the lowest price for gold since the late 70s, with the biggest stock bubble ever... yeah, it sure did. Outside of that year or two, though, you are incorrect.

I'll give you a cherrypick that's more fun. If, in 1976 (the year of my birth, and early on in the period when owning gold was legal again) my parents had purchased baby Waltworks an ounce of gold for $133.77, today I'd have something like $1700, assuming I paid nothing to store it and didn't  lose it while canoeing. Not bad!

Oh, but wait...

If they had stuck $133.77 into an S&P index fund and never touched it, I'd have $10,617.

Feel free to try some other years. Other than the tech crash (if you invested a lump sum), you're never going to win with gold. It's not even close.

-W

Yeah yeah, all bad investors fall back on "long term averages".
The ONLY thing that matters is the growth that YOU are able to capture, not what someone did before or after.

I tried to think of a bunch of reasons and examples to refute this statement but honestly, this is a stupid argument and I think you're smart enough to know why.

I've seen you make reasonable cases for owning gold. Cherry picking data from one of the few time frames that gold outperformed stocks is not one of them.



As I have often said, you can win any X v Y argument if you pick a time frame to support your biases. Who cares, I'm over it.
The only timeframe that I'm personally interested in is the from the day I invest my first penny to the day that I die. I don't care what Buffett did back in the '71 because I wasn't around then, nor do I care what anyone is able to make 100 years from now when I'll have shuffled off this mortal coil.

If you ignore the best performing asset during your investing lifetime then you're not a smart investor, you're a hopelessly naive and narrowminded investor who has been brainwashed by Wall Street's marketing dept (or JL Collins).

waltworks

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Re: Precious Metals
« Reply #545 on: May 16, 2020, 02:12:29 PM »
But even that isn't true, unless you invested a lump sum in 2000 and then never invested again. I will give you that, though. If your "investing lifetime" (ie, time putting money in) was a 2-3 year period around the tech bubble/crash, and you put *all* your money in at once, you are currently ahead with gold.

Over any other time period, or under more reasonable assumptions (ie, investing steadily over that 20 years) buying gold works out very very poorly, though.

-W

TomTX

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Re: Precious Metals
« Reply #546 on: May 16, 2020, 02:19:27 PM »
Yeah yeah, all bad investors fall back on "long term averages".
The ONLY thing that matters is the growth that YOU are able to capture, not what someone did before or after.

And the really bad investors think they're asset-picking geniuses who figured out a pattern nobody else has. Nevermind it never worked before in the long term. This time, momentum is going to work!

vand

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Re: Precious Metals
« Reply #547 on: May 16, 2020, 02:37:34 PM »
The world of investing according to Gone With The Wind.

On Land
*******
"Do you mean to tell me, Katie Scarlett O'Hara, that Tara, that land doesn't mean anything to you? Why, land is the only thing in the world worth workin' for, worth fightin' for, worth dyin' for, because it's the only thing that lasts."

On Gold
*******
"$150 dollars. In Gold."
"For which lady, sir?"
"For Mrs Charles Hamilton."

"Look, Mrs. Meade. It's a great deal of money. $10, $20, $30, $50. And it's not our paper money. It's gold."

On Bonds
********
"What are those papers?"
"Oh ... Bonds - they're all we've saved - all we have left - bonds."
"What kind of bonds, Pa?"
"Why, Confederate bonds, of course, daughter."
"What good are they to anybody?"
"I'll not have you talking like that, Katie Scarlett."



You can learn a lot of good financial lessons from that film, let me tell you.

waltworks

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Re: Precious Metals
« Reply #548 on: May 16, 2020, 02:44:06 PM »
So 1971, not relevant, but 1871, yes? And we're talking about Confederate bonds now?

Just trying to clarify.

-W

maizefolk

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Re: Precious Metals
« Reply #549 on: May 16, 2020, 03:05:59 PM »
In the event that the United States is defeated in a war and occupied, I completely agree that land (and gold) will be preferable investments to US government bonds. Land is probably a good investment for that scenario.

We can learn more from "War, Wealth, and Wisdom" by Barton Biggs.

Quote
Could you have swapped even gold for food in Japan in those first bitterly cold postwar winters? Those that were there say that warm clothes and food were the most desirable barter items. People wanted to first cure being cold and hungry before they became greedy for possessions. One european family that lived through the war in Japan found that the exchange rate for clothes was much higher than that for jewelry, and they survived the hungry years by bartering their large inventory of sweaters and overcoats for food.

There was one other asset class in Japan that functioned to preserve wealth during the war years and enhance it afterwards: commercial and residential land. ....

After all is said and done, considering the enormity of the calamity that was World War II, Japanese equities and land did an impressive job of preserving and enhancing real wealth over the long run. (Emphasis in the original).