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The most exciting returns are to be had from an asset class where those who know it best love it...
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Saturday, February 2, 8:45 AM ETThe most exciting returns are to be had from an asset class where those who know it best love it least. What does it say when the first pick by Bill Gross at the Barron's Roundtable is gold? Gross isn't calling for an imminent bond bear market, but he doesn't see much upside either. For a fixed-income substitute, he recommends (what else) his BOND ETF, which trounced the competition in its first year and just added the use of derivatives to its toolbox.
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Just sayin. :-)
Same with Bill Gross. :-)
Hard assets and commodities/EMs are really the only place to be, and most smart people already know this.
And yes, this means GOLD is the picture if you want to protect your investments from the coming Japanese like calamities.
However, since you asked. :-)
Philosophically speaking, I'm with Buffett on gold. Despite what Glenn Beck would have you believe, it doesn't really have much intrinsic value. We dig it out of the ground, we melt it down, we pay people to stand around guarding it, and for what? So it can sit there and look pretty. Sure, it has some minor applications in the production of some electronics, etc, but otherwise it doesn't really DO anything that produces REAL value.
Good businesses produce real value. Skilled people produce real value. Real value is inherent in some consumables like food and clean water, and commodities that produce goods that add real value. And if the world does actually implode, Glenn Beck style, then you won't want gold, you'll want food, water, and guns -- the people who have those things will laugh heartily at your gold...as they take it from you with their guns and then refuse to share their food and water with you. :-)
Sure, the gyrations of the so-called markets will make gold appear to be valuable as a proxy of a proxy of a proxy for value, but the fact remains, you can't eat it, you can't drink it, and you can't build much with it.
And yes, high inflation is coming, but not this year. Hyper inflation, Zimbabwe style, is not coming, at least not in the next couple decades. Sorry.
Finally, while CPI is certainly a heavily flawed metric as it exists today, it's not /that/ far off from some of the arguably more accurate gauges, like MIT's Billion Product Price index: http://bpp.mit.edu/usa, so it's not worth starting any revolutions over it, not just yet.
But, each to their own. Personally, I'm buying AAPL via vertical spreads. Best of luck to both of us. :-)
Sadly, there is nothing but irrationality and childlike ranting emotion from anti business Socialists who have the nerve to complain about the very people that they use force to take their money. Unless you are living off the taxpayer, you are probably employed by a businessman. You might think about the hand that feeds you - its either a middle class taxpayer or one of those filthy businessmen.
Of course, you could be running your own business, which would take hard work and brains. But I rejected that possibility out of hand as soon as I read that last sentence and that you eat at McDonalds.
Gold stabilzed and found it's bottom. When the inevitable happens, you would be looking back and wondering why you believed our lying Govt hype about no or even low inflation, just like the almost always overstated GDP growth I mentioned earlier. Does that fact alone not bring you a little pause about things?
The air will soon be out of our sails and Stagflation will be here. That may make you happy, getting back to the Jimmy Carter days and all ;-).
BTW, Buffet is not right all the time, especially lately (his bet on rail for example).
Anyone on either side should see that the Economic numbers out of Washington, including inflation, are highly questionable.
Bernake has been quoted as saying that inflation is some sort of "mindset" vs a real number. If he believes this, then you can see why lying about inflation may be nothing more than ends justifying means.
so if you don't argue with somebody of his "caliber" why did you reply?
Sounds a lot like my last girlfriend. She wasn't even much use in electronics applications either.