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Greg Weston is a San Diego-based attorney specializing in complex antitrust and real estate litigation, including class actions. For the last ten years he has consistently beat the S&P 500 with a strategy of buying undervalued technology stocks combined with shorting companies whose weak... More
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The Weston Firm
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  • My Thoughts on Gold 2 comments
    May 23, 2009 02:19 AM | about stocks: GLD

    Plagerized from a comment by Chris B to yet another simplistic gold bug article:

    Assuming that paying 20% over historically high spot metal prices for collector coins will protect your purchasing power from inflation. That will depend on whether your collector coins will, in the future, be in higher demand than the assets that could otherwise be bought with that money.

    It used to be considered common-sense wisdom that real estate was the best way to protect oneself against inflation. After all, there's a fixed amount of it and you can always raise rents. In fact, generic real-estate pundits like Robert Kiyosaki advocated buying up residential housing in 2006 on the justification that inflation HAD TO BE right around the corner and that real estate prices were rising because people were finally figuring this out. People who took that advice bought at the peak of the bubble. Might there be a lesson there for gold investors?

    Themes: gold Stocks: GLD
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This post has 2 comments:

  •  
    When you buy a insurance policy to protect your property,you expect the premium to be lost every year....why would a premium on the golden policy be different.

    My gold is the "just in case' part of my portfolio...but since I've legged in over the past 10yrs,I got to keep my premium,too.

    there is no reason to think any differently for the next 10yrs....
    May 23 05:09 AM | Link | Reply
  •  
    Gold is not a insurance policy unless you are hedging your entire portfolio. Weston's point is well made that Gold is a crowded trade and you are likely to be paying a significant premium to underlying value. The time to buy gold is when the majority is feeling complacent and there is no fear.
    May 23 12:14 PM | Link | Reply
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