phillips49's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/156558/comments http://seekingalpha.com/article/166006-investment-grade-corporate-bond-etf-breaks-down?source=feed#comment-713293 713293 Mon, 12 Oct 2009 20:25:59 -0400 http://seekingalpha.com/article/156325-speculative-grade-winning-streak-continues?source=feed#comment-632139 632139
It boils down to risk/reward.

All investing is speculative. Last year proved it very painfully. The market suddenly collasped from under all asset classes with the credit market freezeup, giant liquidation sale and rapid leveragaging of the investment markets. Money moved into "safe" investments. Treasuries became over bought and yields dropped to zero as investors just tried to keep what they had. At that point even treasuries became a risk ,since they would have to eventually unwind as well as fear faded.
The current yield on"safe" 5 year bonds is 2.49%. I use 5 year since that is the maturity of the junk I own. Junk pays 800 basis points more. The yield has held up remarkably well through the financial crisis. The default rate fears have not materialized. So cash money is paid every month. "cash", real money in the till! And it comes monthly, not quarterly or semi-annually.
As financial markets stablized and some confidence returned and the underlying value "NAV" has also increased by 25% showing some confidence in the unlaying assets.
I suspect that with the tightening of lending standards, companies can ill afford to default on bonds. Who will buy a bond from a company that has a history of default. Who will lend a company money with a poor credit record. Bond holders also have quite a significant say, even in bankruptcy. To wit the role of GM bondholders.

Inflation is not a short term concern.

The stock market is a little ahead of itself at the moment anticipating the end of the recession. Earnings have been achieved by cost cutting to which there is a limit. Growth has not been demonstrated, just hoped for. So in my view it would be a bad time to jump in..downside risk. Treasuries at this point also have more downside risk that upside potential.
Junk may still have some upside potential left. I use September 1 2008 as a benchmark for fair price on these assets. So if the market goes down, I still get 10-13% cash every month. If the market goes up I get the cash and the increase in NAV as well.

Everything is all about debt at the moment, so why not invest in it? You don't have to worry about P/E, new product lines, competition or the cost of goods. Debt is owed money. Pay it back!

I suspect that since bonds performed better than stocks in the last decade, that the baby boomers are now moving into fixed income as they approach retirement.

Of course there is always cash, but then again no pain, no gain.
]]> Sun, 16 Aug 2009 15:05:00 -0400
It boils down to risk/reward.

All investing is speculative. Last year proved it very painfully. The market suddenly collasped from under all asset classes with the credit market freezeup, giant liquidation sale and rapid leveragaging of the investment markets. Money moved into "safe" investments. Treasuries became over bought and yields dropped to zero as investors just tried to keep what they had. At that point even treasuries became a risk ,since they would have to eventually unwind as well as fear faded.
The current yield on"safe" 5 year bonds is 2.49%. I use 5 year since that is the maturity of the junk I own. Junk pays 800 basis points more. The yield has held up remarkably well through the financial crisis. The default rate fears have not materialized. So cash money is paid every month. "cash", real money in the till! And it comes monthly, not quarterly or semi-annually.
As financial markets stablized and some confidence returned and the underlying value "NAV" has also increased by 25% showing some confidence in the unlaying assets.
I suspect that with the tightening of lending standards, companies can ill afford to default on bonds. Who will buy a bond from a company that has a history of default. Who will lend a company money with a poor credit record. Bond holders also have quite a significant say, even in bankruptcy. To wit the role of GM bondholders.

Inflation is not a short term concern.

The stock market is a little ahead of itself at the moment anticipating the end of the recession. Earnings have been achieved by cost cutting to which there is a limit. Growth has not been demonstrated, just hoped for. So in my view it would be a bad time to jump in..downside risk. Treasuries at this point also have more downside risk that upside potential.
Junk may still have some upside potential left. I use September 1 2008 as a benchmark for fair price on these assets. So if the market goes down, I still get 10-13% cash every month. If the market goes up I get the cash and the increase in NAV as well.

Everything is all about debt at the moment, so why not invest in it? You don't have to worry about P/E, new product lines, competition or the cost of goods. Debt is owed money. Pay it back!

I suspect that since bonds performed better than stocks in the last decade, that the baby boomers are now moving into fixed income as they approach retirement.

Of course there is always cash, but then again no pain, no gain.
]]> http://seekingalpha.com/article/154883-why-i-m-lowering-my-bond-exposure?source=feed#comment-622422 622422 Sun, 09 Aug 2009 18:17:15 -0400 http://seekingalpha.com/article/134981-stocks-bonds-intermarket-considerations?source=feed#comment-488522 488522
As I understand the author, rising below grade bond prices as related to investment grade bond prices, indicate improving economic conditions. Comparing the price divergence of LQD to JNK since the 1st of March, shows rising below investment grade bond prices.
Not being bearish, to me doesn't necessarily mean bullish either. To me it means bearish is increasingly risky. Cautiously optimistic would be more appropriate.]]> Mon, 04 May 2009 09:41:26 -0400
As I understand the author, rising below grade bond prices as related to investment grade bond prices, indicate improving economic conditions. Comparing the price divergence of LQD to JNK since the 1st of March, shows rising below investment grade bond prices.
Not being bearish, to me doesn't necessarily mean bullish either. To me it means bearish is increasingly risky. Cautiously optimistic would be more appropriate.]]> http://seekingalpha.com/article/134981-stocks-bonds-intermarket-considerations?source=feed#comment-488476 488476
Good article. The last 30 days do show the divergence you speak of between investment grade and below investment grade bond prices (using JNK and LQD as proxies) and is also coincident with upward movement of stock prices. This would indicate improving economic conditions. Bearish is wrong place to be.

Don]]> Mon, 04 May 2009 09:13:29 -0400
Good article. The last 30 days do show the divergence you speak of between investment grade and below investment grade bond prices (using JNK and LQD as proxies) and is also coincident with upward movement of stock prices. This would indicate improving economic conditions. Bearish is wrong place to be.

Don]]> http://seekingalpha.com/article/105626-defining-a-depression?source=feed#comment-305248 305248
But, comparing debt to GDP is really more like measuring debt to cash flow. OK, so we owe 3.56 times our current income. Is that really bad? If an individual makes $50K per year and has total debt including mortage, cars, loans and credit cards of $178K, is that really bad? Well, it really depends on the maturity of the debt. If it was all due today, it would be a big problem. But if it is spread out over 20 years, it might not be.

Another way of looking at our current financial condition might be to look at our debt to equity ratio. We would look at debt to equity ratios to examine the financial condition of a company that we where considering buying stock in.

In 2005, the per capita wealth of the the US was $513,000 against a population of 296 million making our equity worth $151 trillion. That yields a debt to equity ratio of 0.3. Not to shabby

You could also look at debt as "the price" and GDP as "earnings" which would yield a P/E of 3.5, again not to shabby.

That we have had a succession of bubbles is undeniable. The bubbles are now deflating. What happens during the bubble building and deflating process? If one bought at the beginning of the bubble and held until the bubble deflated, there would be zero gain. If one bought at the beginning of the bubble and sold at the top, one would have a gain. If one bought at the top of the bubble and sold at the end, one would have a loss. So it appears to me that bubbles do not create or destroy wealth, they simply transfer wealth.]]> Thu, 13 Nov 2008 12:17:39 -0500
But, comparing debt to GDP is really more like measuring debt to cash flow. OK, so we owe 3.56 times our current income. Is that really bad? If an individual makes $50K per year and has total debt including mortage, cars, loans and credit cards of $178K, is that really bad? Well, it really depends on the maturity of the debt. If it was all due today, it would be a big problem. But if it is spread out over 20 years, it might not be.

Another way of looking at our current financial condition might be to look at our debt to equity ratio. We would look at debt to equity ratios to examine the financial condition of a company that we where considering buying stock in.

In 2005, the per capita wealth of the the US was $513,000 against a population of 296 million making our equity worth $151 trillion. That yields a debt to equity ratio of 0.3. Not to shabby

You could also look at debt as "the price" and GDP as "earnings" which would yield a P/E of 3.5, again not to shabby.

That we have had a succession of bubbles is undeniable. The bubbles are now deflating. What happens during the bubble building and deflating process? If one bought at the beginning of the bubble and held until the bubble deflated, there would be zero gain. If one bought at the beginning of the bubble and sold at the top, one would have a gain. If one bought at the top of the bubble and sold at the end, one would have a loss. So it appears to me that bubbles do not create or destroy wealth, they simply transfer wealth.]]> http://seekingalpha.com/article/104750-oil-bubble-continues-its-burst?source=feed#comment-300501 300501
If the sole criteria for declaring and bubble is price decline, then every asset class was in a bubble. I don't seem to recall any prescient bubble callers on all asset classes. The last time I looked gold was off 27%, platinum 57%, copper off 50%, stocks off 40%.

I think supply/demand arguements are still valid for all asset classes.

It is my hope that the USA will use the relief on oil and gas prices to develop and implement plans to liberate us from foreign sources of energy. A world power can not remain a world power as long as it is dependant on foreign countries for it's energy. This is a national security issue that must be resolved before we export all of our remaining wealth. As it stands now, if we make someone out there mad, we're walking to work, if work is still open.]]> Fri, 07 Nov 2008 19:16:16 -0500
If the sole criteria for declaring and bubble is price decline, then every asset class was in a bubble. I don't seem to recall any prescient bubble callers on all asset classes. The last time I looked gold was off 27%, platinum 57%, copper off 50%, stocks off 40%.

I think supply/demand arguements are still valid for all asset classes.

It is my hope that the USA will use the relief on oil and gas prices to develop and implement plans to liberate us from foreign sources of energy. A world power can not remain a world power as long as it is dependant on foreign countries for it's energy. This is a national security issue that must be resolved before we export all of our remaining wealth. As it stands now, if we make someone out there mad, we're walking to work, if work is still open.]]> http://seekingalpha.com/article/100633-things-aren-t-as-bad-as-they-seem-barron-s?source=feed#comment-285920 285920
I agree that the gas price drop will be a boon for the consumer. It comes at just the right time of the year for the retailers. The holidays...the time of the year they go into the black.

The stock market behavior appears to be more liquidation driven than value or economy driven. That may be due to a confluence of factors such as hedge fund redemption selling, margin call forced liquidation selling, financials raising cash by selling equities, baby boomers that don't have the time to do it again and the fear mongers benefitting from short selling The current P/E of the S&P is around 13.5 against a 30 year average of 18. To me that says that the sell off was most certainly not value or economy driven but driven by the need to raise cash. The last time the P/E was at this level was 1988. The market returned to more traditional value 2 years later.

I don't think it is polyanna to be optimistic about the future. History is on my side.

I shopping for some stocks. They're still on sale this week.]]> Sun, 19 Oct 2008 20:19:48 -0400
I agree that the gas price drop will be a boon for the consumer. It comes at just the right time of the year for the retailers. The holidays...the time of the year they go into the black.

The stock market behavior appears to be more liquidation driven than value or economy driven. That may be due to a confluence of factors such as hedge fund redemption selling, margin call forced liquidation selling, financials raising cash by selling equities, baby boomers that don't have the time to do it again and the fear mongers benefitting from short selling The current P/E of the S&P is around 13.5 against a 30 year average of 18. To me that says that the sell off was most certainly not value or economy driven but driven by the need to raise cash. The last time the P/E was at this level was 1988. The market returned to more traditional value 2 years later.

I don't think it is polyanna to be optimistic about the future. History is on my side.

I shopping for some stocks. They're still on sale this week.]]> http://seekingalpha.com/article/99838-how-long-will-the-bear-market-last?source=feed#comment-283263 283263 Wed, 15 Oct 2008 17:24:42 -0400 http://seekingalpha.com/article/99838-how-long-will-the-bear-market-last?source=feed#comment-283224 283224
"Foreign Banks will dump treasuries and buy gold"

Not very likely unless they want to hamstring themselves and their own ability to print paper and cut themselves out of 20% of the gobal economy situated in the good old USA. Gold is a commodity whose value is based on supply and demand unless it's price is standardized and fixed (i.e. gold standard). For the average guy, there isn't much you can really do with gold..... you can't eat it or buy a car with it. The only value it has is what someone else is willing to pay for it in legal tender. After the gold bulls have talked others into buying the stuff and driving up the price, they'll exit leaving others holding the bag. It's happened in every other sector. The last and final bubble to burst will be gold. History says it will.

As for how long the bear market will last....nobody knows.....it will last until investors begin to feel a little bit more confident and feel like taking a little bit more risk. Nothing is risk free. Not even stuffing your mattress with dollars. Rational people have pretty much ruled out the depression doomsday scenario. That leaves a recession. We've had them before and we'll have them again. We've been through this before and proven that we will come out the other side. ]]> Wed, 15 Oct 2008 16:50:10 -0400
"Foreign Banks will dump treasuries and buy gold"

Not very likely unless they want to hamstring themselves and their own ability to print paper and cut themselves out of 20% of the gobal economy situated in the good old USA. Gold is a commodity whose value is based on supply and demand unless it's price is standardized and fixed (i.e. gold standard). For the average guy, there isn't much you can really do with gold..... you can't eat it or buy a car with it. The only value it has is what someone else is willing to pay for it in legal tender. After the gold bulls have talked others into buying the stuff and driving up the price, they'll exit leaving others holding the bag. It's happened in every other sector. The last and final bubble to burst will be gold. History says it will.

As for how long the bear market will last....nobody knows.....it will last until investors begin to feel a little bit more confident and feel like taking a little bit more risk. Nothing is risk free. Not even stuffing your mattress with dollars. Rational people have pretty much ruled out the depression doomsday scenario. That leaves a recession. We've had them before and we'll have them again. We've been through this before and proven that we will come out the other side. ]]> http://seekingalpha.com/article/99460-is-gold-a-sucker-s-bet?source=feed#comment-279962 279962 The next and final bubble to burst will be gold. History says it will. Gold is neat but you can't do anything with it except cash it in for money to do something else with. When people start to head for the cash register, the price will plummet as viciously as the stock market . It always has. It always will. The slower ones will be left holding the losses and the gold bug rhetoric. I'd rather take my chances with inflation. ]]> Sat, 11 Oct 2008 15:25:58 -0400 The next and final bubble to burst will be gold. History says it will. Gold is neat but you can't do anything with it except cash it in for money to do something else with. When people start to head for the cash register, the price will plummet as viciously as the stock market . It always has. It always will. The slower ones will be left holding the losses and the gold bug rhetoric. I'd rather take my chances with inflation. ]]> http://seekingalpha.com/article/99440-using-history-to-plan-near-term-investing?source=feed#comment-279929 279929
I woke up this morning feeling fine. It’s a bright sunny fall day. My car was still in the driveway. The gas station was pumping gas at $2.79 per gallon. Traffic was normal. Best Buy was busy with the usual Friday payday trade. My job was still there. My bank ATM still worked. That is the reality of the day.

The newspaper headlines read WORST EVER WEEK FOR THE DOW. My paper assets are now worth 20% less than they were a week ago. Jeepers, what is going on here?

So I have to ask, what was the reality of the week?

For starters, for every dollar I lost, someone made a dollar someplace. You can bet on that. The dollars didn’t just burn up or evaporate. The dollars are still there. For every sale, there was a buy. That means that wealth just changed hands. Someone picked my pockets. Someone got richer as I got poorer.

Well, who would want to do that? Well, probably the same ones that cheered on the bull market in equities, housing, real estate, energy, gold and investing for the long term. Now, in light of the financial crisis in banking, the cheerleaders are propagating waves of fear overwhelming the average little guy. Stories of the crash of 29 lead the way. Sell your stuff at a loss, hoard cash. Don’t take a chance.

The reality of it is, they have exhausted feeding upon each other and are now feeding upon us. And it’s working. They are picking our pockets again. And we are helping them. Just as in 29, some are getting rich at the expense of others. Someone is buying up your fire sale assets. And we are saying thank goodness I got out with something.

The reality is that if there were no sellers, prices would skyrocket because there would only be buyers. The reality is that business fundamentals don’t dictate the fire sale. The P/E ratio of SPY is 13.5, well below the historic S&P average. The 30 year average P/E is around 18. The 20 year around 22.

The reality is, this ain’t 1929. The reality is that the nation will survive the market, as it always has. The reality is the money will be in different pockets when it comes out the other side and we will have helped them.
]]> Sat, 11 Oct 2008 14:27:52 -0400
I woke up this morning feeling fine. It’s a bright sunny fall day. My car was still in the driveway. The gas station was pumping gas at $2.79 per gallon. Traffic was normal. Best Buy was busy with the usual Friday payday trade. My job was still there. My bank ATM still worked. That is the reality of the day.

The newspaper headlines read WORST EVER WEEK FOR THE DOW. My paper assets are now worth 20% less than they were a week ago. Jeepers, what is going on here?

So I have to ask, what was the reality of the week?

For starters, for every dollar I lost, someone made a dollar someplace. You can bet on that. The dollars didn’t just burn up or evaporate. The dollars are still there. For every sale, there was a buy. That means that wealth just changed hands. Someone picked my pockets. Someone got richer as I got poorer.

Well, who would want to do that? Well, probably the same ones that cheered on the bull market in equities, housing, real estate, energy, gold and investing for the long term. Now, in light of the financial crisis in banking, the cheerleaders are propagating waves of fear overwhelming the average little guy. Stories of the crash of 29 lead the way. Sell your stuff at a loss, hoard cash. Don’t take a chance.

The reality of it is, they have exhausted feeding upon each other and are now feeding upon us. And it’s working. They are picking our pockets again. And we are helping them. Just as in 29, some are getting rich at the expense of others. Someone is buying up your fire sale assets. And we are saying thank goodness I got out with something.

The reality is that if there were no sellers, prices would skyrocket because there would only be buyers. The reality is that business fundamentals don’t dictate the fire sale. The P/E ratio of SPY is 13.5, well below the historic S&P average. The 30 year average P/E is around 18. The 20 year around 22.

The reality is, this ain’t 1929. The reality is that the nation will survive the market, as it always has. The reality is the money will be in different pockets when it comes out the other side and we will have helped them.
]]> http://seekingalpha.com/article/98706-the-cramer-crash?source=feed#comment-275073 275073 Mon, 06 Oct 2008 16:41:33 -0400 http://seekingalpha.com/article/97915-the-credit-hostage-crisis?source=feed#comment-269573 269573
If the root cause of the problem, is the housing market collaspe and mortage defaut, well then who did that?...it wasn't Wall Street.....it was us!

Yes, the FED kept rates too low too long and money was easy, yes Wall Street invented CDS's and CDO's, yes accounting regulations require mark to market, not mark to model, yes the FED kept rates to high to long and were igorant of the impact on derivitives, but we (the taxpayer) borrowed the money...nobody made us take it....nobody made us bid up homes prices beyond reasonable value, noboby forced us to get in over our head...we fell for it...we created the housing bubble, we are the ones defaulting, we the people are the problem.

At the end of the day, we were no better than the banks or Wall Street.]]> Tue, 30 Sep 2008 11:00:09 -0400
If the root cause of the problem, is the housing market collaspe and mortage defaut, well then who did that?...it wasn't Wall Street.....it was us!

Yes, the FED kept rates too low too long and money was easy, yes Wall Street invented CDS's and CDO's, yes accounting regulations require mark to market, not mark to model, yes the FED kept rates to high to long and were igorant of the impact on derivitives, but we (the taxpayer) borrowed the money...nobody made us take it....nobody made us bid up homes prices beyond reasonable value, noboby forced us to get in over our head...we fell for it...we created the housing bubble, we are the ones defaulting, we the people are the problem.

At the end of the day, we were no better than the banks or Wall Street.]]> http://seekingalpha.com/article/96897-oil-price-speculation-truth-begins-to-leak-into-mainstream-media?source=feed#comment-262331 262331 Tue, 23 Sep 2008 09:05:21 -0400 http://seekingalpha.com/article/92269-witnessing-the-biggest-transfer-of-wealth-in-history?source=feed#comment-237390 237390
My opinions:

The Fed is walking a tightrope on interest, not necessarily because of the best interest of FRE or FNM shareholders and bondholders, but because of the balancing act between throwing the entire economy into a deep recession, igniting serious inflation, supporting the dollar and trying to keep energy costs contained.
At this point in the cycle, I think the following is true:
Lower interest= weak dollar=higher oil
Lower interest=higher inflation
Lower interest=higher home ownership rate
Lower interest=better propects of avoiding a deep recession
Higher interest=recession=hig... unemployment
Higher interest=stronger dollar=lower oil prices
Higher interest=reduced homeownership

The Fed created this mess because they raised interest rates to fight demand based commodity inflation. Wages where never an issue. The process of raising interest rates caused the collaspe of the mortgage market and nearly the entire financial system due to derivitives and leveraging because they didn't understand the consequences of their actions.
One way or the other the tax payer is going to pay for all of it. It's just what pocket it comes out of, whether a few pay for all or whether everyone pays a little. Keeping as many employed as possible seems like a better choice to me. Even no growth is better than a major contraction. Having a job to pay for higher gas is better than no job and gas at a lower price.
]]> Sat, 23 Aug 2008 19:31:32 -0400
My opinions:

The Fed is walking a tightrope on interest, not necessarily because of the best interest of FRE or FNM shareholders and bondholders, but because of the balancing act between throwing the entire economy into a deep recession, igniting serious inflation, supporting the dollar and trying to keep energy costs contained.
At this point in the cycle, I think the following is true:
Lower interest= weak dollar=higher oil
Lower interest=higher inflation
Lower interest=higher home ownership rate
Lower interest=better propects of avoiding a deep recession
Higher interest=recession=hig... unemployment
Higher interest=stronger dollar=lower oil prices
Higher interest=reduced homeownership

The Fed created this mess because they raised interest rates to fight demand based commodity inflation. Wages where never an issue. The process of raising interest rates caused the collaspe of the mortgage market and nearly the entire financial system due to derivitives and leveraging because they didn't understand the consequences of their actions.
One way or the other the tax payer is going to pay for all of it. It's just what pocket it comes out of, whether a few pay for all or whether everyone pays a little. Keeping as many employed as possible seems like a better choice to me. Even no growth is better than a major contraction. Having a job to pay for higher gas is better than no job and gas at a lower price.
]]> http://seekingalpha.com/article/92179-natural-gas-fund-is-flaming-out?source=feed#comment-237346 237346 Sat, 23 Aug 2008 17:03:34 -0400 http://seekingalpha.com/article/91940-why-i-finally-bought-fannie-mae?source=feed#comment-235519 235519
I was of the same mind as you and I bought FNM. In a matter of weeks I lost 37% of my money. That was more pain than I could stand. I got out while I still had something to get out. If I had held on, I would have lost an additional 30%. At the end of the day, it doesn't make any difference what we think. Stock is only worth what someone else is willing to pay for it. The market obviously sees a lot more risk than potential reward and has pulled all support. Hope your investment is a small holding.]]> Thu, 21 Aug 2008 09:18:45 -0400
I was of the same mind as you and I bought FNM. In a matter of weeks I lost 37% of my money. That was more pain than I could stand. I got out while I still had something to get out. If I had held on, I would have lost an additional 30%. At the end of the day, it doesn't make any difference what we think. Stock is only worth what someone else is willing to pay for it. The market obviously sees a lot more risk than potential reward and has pulled all support. Hope your investment is a small holding.]]> http://seekingalpha.com/article/91454-are-current-commodity-prices-as-high-as-compared-with-previous-years?source=feed#comment-234175 234175 The average of 30 years of inflation adjusted oil prices from 1978 through 2007 was $42.70/bbl. The 2008 average was $98.66, so our current price is >100% higher than the 30 year inflation adusted average. That's quite a little bit different from taking the highest high.]]> Tue, 19 Aug 2008 15:04:01 -0400 The average of 30 years of inflation adjusted oil prices from 1978 through 2007 was $42.70/bbl. The 2008 average was $98.66, so our current price is >100% higher than the 30 year inflation adusted average. That's quite a little bit different from taking the highest high.]]> http://seekingalpha.com/article/91454-are-current-commodity-prices-as-high-as-compared-with-previous-years?source=feed#comment-233553 233553 Mon, 18 Aug 2008 20:08:37 -0400 http://seekingalpha.com/article/91329-the-bedrock-case-for-the-return-of-the-gold-bull?source=feed#comment-232658 232658 It is also a mistake to liken gold to currency. The governments of the world won't let that happen. And they will conspire together to make sure it doesn't happen. Gold will never be accpted as legal tender in the grocery store. It will always have to be converted into paper. They own enough gold, that if even partially sold, would drop the price of gold into the last century. If you bought a 1000 shares of GLD, this summer when the hype was high, say at $90.00, then you're out a lot of money in a very short period of time. What has inflation done in the last one month? It sure didn't rise 14%. I'm not anti gold or a nay sayer. It just is what it is!]]> Sun, 17 Aug 2008 19:06:47 -0400 It is also a mistake to liken gold to currency. The governments of the world won't let that happen. And they will conspire together to make sure it doesn't happen. Gold will never be accpted as legal tender in the grocery store. It will always have to be converted into paper. They own enough gold, that if even partially sold, would drop the price of gold into the last century. If you bought a 1000 shares of GLD, this summer when the hype was high, say at $90.00, then you're out a lot of money in a very short period of time. What has inflation done in the last one month? It sure didn't rise 14%. I'm not anti gold or a nay sayer. It just is what it is!]]> http://seekingalpha.com/article/91315-is-there-a-margin-of-safety-in-financials?source=feed#comment-232495 232495 Sun, 17 Aug 2008 14:23:12 -0400 http://seekingalpha.com/article/91100-forget-100-a-barrel-oil-will-plummet-to-30?source=feed#comment-232084 232084 Sat, 16 Aug 2008 18:03:16 -0400 http://seekingalpha.com/article/91137-don-t-believe-the-lies-ride-the-bank-stocks-bull?source=feed#comment-231499 231499 Fri, 15 Aug 2008 16:27:01 -0400 http://seekingalpha.com/article/91137-don-t-believe-the-lies-ride-the-bank-stocks-bull?source=feed#comment-231494 231494 Fri, 15 Aug 2008 16:21:07 -0400 http://seekingalpha.com/article/90932-natural-gas-wind-power-the-pickens-plan?source=feed#comment-230557 230557
Well said and not all overstated. It took $4.00 gas for people to start asking questions.We can find all kinds of reasons to do nothing, but if we don't take care of our business, we'll be out of business. At the end of the day, it really is everyman for himself and no one out there will really care whether we sit in the warm light or the cold dark. Many would just as soon see us fall (after they have all of our money). It has not dawned on a lot of people, that a free nation cannot remain a world power, if it depends on the good will of theocracies, monarchies, and socialists for it's energy. Affordable energy made the USA great and gave us the ability to project our economic and military power anywhere in the world. We will need to use all the resources available to us. A comprehensive national energy plan is a must so that we don't make the mistake of using food for fuel again. I hope the Pickens Plan starts that discussion.]]> Thu, 14 Aug 2008 15:49:48 -0400
Well said and not all overstated. It took $4.00 gas for people to start asking questions.We can find all kinds of reasons to do nothing, but if we don't take care of our business, we'll be out of business. At the end of the day, it really is everyman for himself and no one out there will really care whether we sit in the warm light or the cold dark. Many would just as soon see us fall (after they have all of our money). It has not dawned on a lot of people, that a free nation cannot remain a world power, if it depends on the good will of theocracies, monarchies, and socialists for it's energy. Affordable energy made the USA great and gave us the ability to project our economic and military power anywhere in the world. We will need to use all the resources available to us. A comprehensive national energy plan is a must so that we don't make the mistake of using food for fuel again. I hope the Pickens Plan starts that discussion.]]> http://seekingalpha.com/article/90709-has-gold-fallen-in-a-secular-bear-trend?source=feed#comment-229306 229306 Wed, 13 Aug 2008 09:35:27 -0400 http://seekingalpha.com/article/90606-the-herd-of-lemmings-part-ii?source=feed#comment-228996 228996 Tue, 12 Aug 2008 20:23:59 -0400 http://seekingalpha.com/article/87252-interview-with-nick-barisheff-gold-is-money?source=feed#comment-215818 215818 Sun, 27 Jul 2008 14:48:30 -0400 http://seekingalpha.com/article/87105-where-are-precious-metals-heading?source=feed#comment-215359 215359
If cash is a lousy investment and gold = cash, then gold must be lousy investment. Because gold is a commodity it is an unreliable proxy for cash. It is subject to supply and demand and is only worth what someone is willing to pay for it at a particular time. It is highly volatile over short periods of time and unrelaible over long periods of time. Yes, the example posed is extreme, but it is also real. By 1984 gold had declined to $331/oz. In December, 2002, gold was still only $346/oz. Cash invested at 4% interest would have yielded $668 in that time frame. Bread doubled in price in that same time frame. If bread could have been preserved, bread would have been a better investment than gold for those 18 years. A buyer of gold in 1984 would not have had parity purchasing power until 2007. 23 years is a long time to wait to get even. Neither the dollar, nor gold has any particular value except what it can be exchanged for. Money can be made in gold by some, by just plain luck in timing and by some pros with a good timing system and instant information. For the average person cash is a safer, more reliable position in a bear market. Gold today is 4.4% lower than it was on July the 15th. Cash is still the same value.]]> Sun, 27 Jul 2008 00:19:39 -0400
If cash is a lousy investment and gold = cash, then gold must be lousy investment. Because gold is a commodity it is an unreliable proxy for cash. It is subject to supply and demand and is only worth what someone is willing to pay for it at a particular time. It is highly volatile over short periods of time and unrelaible over long periods of time. Yes, the example posed is extreme, but it is also real. By 1984 gold had declined to $331/oz. In December, 2002, gold was still only $346/oz. Cash invested at 4% interest would have yielded $668 in that time frame. Bread doubled in price in that same time frame. If bread could have been preserved, bread would have been a better investment than gold for those 18 years. A buyer of gold in 1984 would not have had parity purchasing power until 2007. 23 years is a long time to wait to get even. Neither the dollar, nor gold has any particular value except what it can be exchanged for. Money can be made in gold by some, by just plain luck in timing and by some pros with a good timing system and instant information. For the average person cash is a safer, more reliable position in a bear market. Gold today is 4.4% lower than it was on July the 15th. Cash is still the same value.]]>