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Allen Jackson

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  • Looking To Profit From The Economic Recovery? Here's How [View article]
    I live in Florida too, the housing market is somewhat lumpy here. I must say, it is getting better, slowly but surely.
    Jan 31 03:36 PM | 1 Like Like |Link to Comment
  • Looking To Profit From The Economic Recovery? Here's How [View article]
    That number does take into account "de-formation." Household formation can be decreased when two individuals move in with one another. I can also be formed when children leave home to move elsewhere. The number reflects these occurrences.

    According to the chart, I believe you are correct with your 1 million annual figure. This however, I not 100% sure on.
    Jan 31 09:22 AM | Likes Like |Link to Comment
  • Looking To Profit From The Economic Recovery? Here's How [View article]
    Thanks for your comments!

    I agree with you that a round of foreclosure may occur. This is quite possible in states such as Florida, Nevada and California, where delinquency rates are still high.

    I disagree with you on your comment that 2% growth is not a recovery. In the context of one year in isolation 2% growth may not indicate a recovery. However when used in the context of the past 4 years 2% growth indicates a recovery. This is particularly true after negative growth has occurred for so many quarters in 2008. Here are some facts on this issue:

    Below I present to you GDP growth figures from 2008. Notice the trend upwards is slow and lumpy. In the context of this data, a 2% growth rate does indeed indicate a recovery from the lows of 2008 and 2009. This is also true given the historical average of GDP growth is 3.23%. As such, given the facts, they do suggest that 2% is a recovery.
    http://bit.ly/JER9ci

    Q1, 2008 -1.8
    Q2, 2008 +1.3
    Q3, 2008 -3.7
    Q4, 2008 -8.9

    Q1, 2009 -5.3
    Q1, 2009 -.3
    Q3, 2009 +1.4
    Q4, 2009 +4

    Q1, 2010 +2.3
    Q2, 2010 +2.2
    Q3, 2010 +2.6
    Q4, 2010 +2.4

    Q1, 2011 +.1
    Q2, 2011 +2.5
    Q3, 2011 +.1
    Q4, 2011 +4.1

    Q1, 2012 +2
    Q2, 2012 +1.3
    Q3, 2012 +3.1

    Thank you so much for your comment. I look forward to hearing a reply from you!
    Jan 31 09:18 AM | Likes Like |Link to Comment
  • Looking To Profit From The Economic Recovery? Here's How [View article]
    Thanks for the comment, I appreciate your feedback.

    The beginning of the article discusses the reversal of the decline of housing. 2012 was indeed a monumental year for the reasons I stated. Unemployment has indeed declined from 2008 highs, and the economy has indeed began to turn around. I mentioned, if you read the entire article, that the recovery is very slow and tepid. However 2012 was a great year, as a trend of stabilization is beginning to occur. The statistics I show in the article were meant to confirm my theory. As such, I stand by my statement. 2012 was indeed a monumental year, as it marked the end of a decline, and the possible beginning of a new recovery.

    I again thank you for your comments. I love your interest in the subject!
    Jan 31 09:02 AM | 1 Like Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    HAHAAHA......Im already on tour, I have my gold with me too!
    Jan 30 10:58 AM | 1 Like Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Thanks, there is a lot of passion on this thread, I see.
    Jan 29 04:23 PM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Thanks for your comment. Your arguments are very compelling. I'd like to hear jmho's response to you claims.

    Here is my take: First, in my article I discuss the use of index funds as a viable long term investment, not individual securities. With an index fund, you would not have to select individual, or as you put it, "winning" stocks. The market overall have proven to be a "winner" for the past 200 years. The index fund eliminates your argument regarding the need for an investor to pick, "winning stocks."

    In addition, your gold coin argument is valid. Instead, lets look at 1901 instead of 1801. If you like, we can even use 1950 as the starting base year. In all three instances gold was inferior to both stocks and even bonds in most decades.
    Jan 29 06:43 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Point well taken,

    In my earlier comment, I said that many of the topics referenced in the article do NOT apply in today's market. I was simply giving an example, IF they did occur.

    I also said in my article that Gold is indeed a hedge against instability. I agree with you. All Im saying is that common stocks have proved to be a adequate hedge as well. Stocks will also provide the added bonus of growth.
    Jan 29 06:33 AM | 2 Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    I agree with that assessment 100%. Low volatility is ideal for many investments.
    Jan 29 04:31 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    I agree with that assessment 100%. Gold as a portion of a portfolio is not a bad idea. This is particularly true for an individual who does not want much price movement in their account.
    Jan 29 04:30 AM | 2 Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Thanks so much for your comment, I finally reached the two article milestone. =) I really appreciate all your comments and support.

    To counter your argument, I would pose this question to you: Name one year in which there has been NO inflation, or ego-political uncertainty? Every year there is uncertainty. Such is the nature of the market. Investors should be compensated for this risk appropriately. Over the past century, we have had two world wars, an attack on pearl harbor, terrorist attacks, periods of deflation and hyper inflation, and much more. In many of these cases, nobody suspected their arrival. However, during each successive period the market has risen substantially, whereas gold has done considerably worse. The DOW over this period moved from 66 in 1900 to 11,400 in 2000.

    The American system works through various cycles and uncertainties. The holder of stocks has flourished during this period.

    Thank you once again for your comment. This dialogue is very interesting. Im learning each time I comment!
    Jan 29 04:28 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Well, a more accurate picture would arise if you look at Debt as a percentage of GDP. Using absolute dollars wont necessary work as both the economy and GDP have grown substantially over the long term. Looking at debt as a percentage of GDP, we had one prior period where debt was actually 113% of GDP.

    Can you guess when this occurred? To spare you the time, and research, the period was during World War 2. During this period we actually have debt of $1.13 for each dollar of GDP!

    Now, to answer your question, you may think that gold performed well over this period relative to stocks. The answer will probably surprise you. The following link shows historic gold prices by decade. http://bit.ly/WcBY41

    During 1940 to 1950 gold went from 34.50 to a staggering 40.25. What growth rate was this? Gold grew over the decade at 1.5% percent compounding rate, well below the average mentioned in my article.

    Now what about stocks during this period? Surely they could have performed better? Below is the annual returns each year of the market from 1940 to 1950

    1950 34.28
    1949 15.96
    1948 9.51
    1947 2.56
    1946 -12.05
    1945 39.35
    1944 19.67
    1943 23.60
    1942 21.74
    1941 -9.09
    1940 -8.91

    The annual growth rate during this period was 11.14%, significantly more than the 1.5% growth rate of gold.

    This is the historical example you have asked for, and the evidence points commandingly towards common stock ownership
    Jan 29 04:20 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Thanks for the comment. The paper was very interesting to read.

    To begin, here is why the calculations will be approximately correct regarding Germany and Brazil. In your above comment, you say, "Stocks have outpaced gold in America because of the stability of the American political system." Both Germany and Brazil currently have stable political systems, albeit different ones from America. In addition, the source you referenced would not directly apply to Brazil and Germany given market circumstances prevailing today (Example include war, communism, and political upheaval). Lets assume however that many of the incidents mentioned in your reference did apply.

    Even in America we experienced a period of hyperinflation in both the 1970s and the 1980s. The very source you referenced in the comment discusses inflation in the Philippines after World War 2. America experienced the same inflation immediately following World War 2 as well. Looking back at these two hyperinflation periods in America, (World War 2 and the decade of 1980) stocks still outperformed Gold over the long term. In fact, each period was followed by a roaring bull market. The bull market immediately following the hyperinflation of the 1980's was particularly rewarding. Between the years 1982 and 1998 the stock market returned an average of 19% a year.

    The investor in stocks for the long term would have been handsomely rewarding mainly due to the aspects mentioned in my article. The investor in gold however, would have had to settle for meager returns, again, due to reasons mentioned in my article.

    Thanks for you comment, and I really enjoy your interest in this subject.
    Jan 29 03:55 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    Unfortunately, I do not believe the Fed will ever stop printing money. As long as the dollar is backed by the full faith of the U.S. government, there is incentive to print money at the expense of future generations. It easier politically to print money than it is to curtail it. As such, leaders have an incentive to print money. Fortunately, there is a viable solution, through common stocks, to avoid this problem of inflation and money printing. Stocks, to a certain degree, can serve as an inflation hedge. In many instances, stocks with pricing power have the ability to raise prices without a corresponding decrease in demand. Lets use American Express for example. The value proposition of AmEx is unique within the payments industry. There is no card that provides the rewards, customer service, and overall experience that American Express provides. The card also caters to the affluent segment of the market. As such a consumer paying a $100 annual fee, would not object to a 5% increase. The consumer, realizing the value the card provides, would not curtail spending at all. The overall value the card provides is more than offset by the 5% increase in annual fee. In this instance, the company has effectively mitigated inflation risk, while also maintaining its strong and loyal customer base.

    There are many such companies with this pricing power. Companies that require very little capital expenditures are ideal candidates. IBM, American Express, Hershey's, Coca-Cola and others all have the ability to raise prices. Coca Cola charges more than the generic RC Cola. Technically, they are the same product, yet Coca-Cola continues to sell more product and take market share. The company currently sells 1.6 billion 8 ounce serves a day. This total grows year by year. During inflationary periods, the company has the ability to raise its price, relative to competitors, much in the same fashion it currently is. In this case, investors will have an adequate inflation hedge, similar to that of gold, with the added bonus or capital appreciation.
    Jan 29 03:02 AM | Likes Like |Link to Comment
  • Investors Beware - The Misplaced Infatuation With Gold Could Cost You Dearly [View article]
    I used the 200 year example because it represents a large sample size. In the article, I talk about gold in the context of LONG TERM investing. The 200 years example was simply used to show performance through various interest rate cycles, political environments, and macroeconomic trends. If you cut the graph in half, the results would still be the same. To your point, as I stated in the article, gold does have short term uses. However, as a long term investor, you would be better served in undervalued stocks or other productive assets.
    Jan 29 02:44 AM | Likes Like |Link to Comment
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