BrunoT

Gold Against Stocks Over the Decades: Not as Impressive

This sort of logical fallicy is what is going to make a lot of people very poor (and others contrarian to it, very rich) in the coming years.

Just because something "was" for a period of time when conditions were different, doesn't mean it will always be in the future. You adjust your investments to the conditions.

The fact is, most "investor" class participants are young enough that they came of age in a 25 year bull market in stocks. Anyone under about 60 never had enough to invest to even know there were actually bad times to be in stocks. If they had languished from '68 to '82 in stocks as gold soared while developing their world view they may have garnered an appreciation that stocks don't always rise, just as recently their non-thinking classmates learned the lesson that real estate doesn't always rise in value.

The problem is some want to avoid a deeper understanding of economics by using silly rules of thumb and historical precedents as a short cut vs the hard work and time it takes to obtain a true understanding. They want something they can obtain at the water cooler in 5 minutes.

Gold: The Only Remaining Bubble?

"institutional clients" ? You mean like those in whose interest it might be to have you talk gold down and talk stocks up?

I'm sure you WISH we were in a deflation. You probably even believe it, poor thing. Go check last quarters food prices. Up at a 5% annualized rate. How is that deflation? Wanna bet gas prices are lower this summer than now? ASSET prices are dropping as we all get poorer, that's all. It's not the same as deflation.

And the proper term is "libel", not "slander". You might want to brush up on that kind of thing before your big institutional clients figure out you don't know something that basic.

Finally, you might want to rethink that whole "I'll insult people to make a point" tactic. Calling them cultists and implying that they are so stupid they've become your best contrarian indicators isn't likely to win you any following. Because it sure sounds like you can't take it when they toss your own monkey poo back in your direction.

Gold: The Only Remaining Bubble?

So anyone who disagrees with you on gold is a "cultist"? Well then I have decided that anyone who thinks we're going to have deflation is a "douche". How about them apples?

Please provide us with a list of your assets that have risen in the last year. Did you notice that gold has?

BTW my double long gold is up 69% since I bought it around the time you were trumpeting your call on how bad gold was. Guys like you were MY contrarian signal to buy more. Thank you, as you guys have made it possible to accumulate gold at relatively cheap prices for years as you've brayed about how it's no good.

I could sit in bank CD's for the next decade and still beat the stock market from here on out.

PS. learn the definition of "bubble" before you cast it around.

The U.S. Dollar: Waiting to Tank Gold's Run?

blahblahblah....see my pretty chart...blahblahblah

Too bad they didn't teach common sense at Harvard.

Thank heavens I was heavy into gold and not stocks. My gains were protected.

Every asset class has its time and place. Squiqqly lines to the contrary.

Now go tell those of us who bought DGP 3 months ago instead of treasuries how badly we're mistaken..lol!

Gold Loses Its Shine

Whose basement is Sean going to live in in a couple of years after he shorts gold? Because if he does it in any meaningful amount he's not only going to be broke he's going to have no income as anyone who found out about it would not hire him.

I'm not a gold "bug", but I don't have time to shoot holes in these weak arguments.

If he'd have bothered to even read a wikipedia article on gold he'd understand more about what makes it different than fiat money.

And it's uninformed at best to think that gold will rise in value ONLY if there is a chaotic breakdown and chaos. Has he checked the price since 2001? Has he compared it to any other asset class? Has he looked at the money supply figures? Has he heard the numbers tossed around in various bailouts?

It would be one thing if a person could even match real inflation with CD's or bonds, but it's not even close. It hasn't been for years. Gold is simply a store of value that periodically one can do even better on as it comes in and out of favor.

But you go ahead and pay 50 times earnings for some tech or retail stock and let us know how that works out for you.

Don't Give Up on Gold Just Yet

One of the worst years on record? You sure about that?

The YTD return shown for GLD at yahoo.com was positive 3.17% until yesterday's drop off.

Then compare that to how much oil an ounce of gold will buy you. Nearly twice as much! By that metric gold is way way up.

Then compare an oz of gold to the dow. The ratio went from something like 15-1 to 10-1. So again, way way up. The Dow is down over 40%. Gold isn't.

An oz of gold also buys more house, more pickup truck, and even more agricultural commodities than it did a year ago.

Sounds to me like it's serving its role as a true store of value. Unless one went "all in" at $1,000/oz it wasn't a bad year at all.

Gold, Silver and Deflation

Such simplistic arguments put forth in some of the quoted columns! "if gold didn't soar during the crash it never will!" Does it even occur to the writer that when you suck trillons of debt out of the economy and people still have hope for "saving" it, then most won't rush to gold? Only when the reality dawns will gold rise. There are many many factors pulling on the price of all assets. A single simplistic rationale won't cut it.

Does nobody recognize that if gold goes down in a "deflation" when priced in dollars that those dollars will buy you more stuff? Yet if we see inflation and you're in gold it will probably also go up and mirror that? I didn't get the impression from the comments that this was understood. Gotta stop thinking just in terms of dollars.

How much house or car or clothing or food will an oz of gold buy you? That is the important question. That is the beauty of it in a crisis. If things turn out to be good, you keep most of your investment and your job. But if things hit the fan, you are protected.

Why I Got Gold Wrong

What bubble gum machine does one get his "expert" badge out of to post here? Come on. If you don't really have a handle on it post your thoughts on a regular chat board. You got this one about half right.

Yes, there's deflation in credit and some asset classes like RE, stocks, bonds, etc. But you completely fail to account for the fact that our govn't (and world govn'ts) are creating money out of thin air for TRILLIONS in bailouts and stimulous packages and nearly as much in routine deficit spending. This money printing will outweigh the loss of money from bank losses, as while the bank crisis will end the deficit spending will not and will even increase. If you think a $550B deficit is bad, wait till we're in full bore recession and tax revenues are way off. $1trillion deficits will become routine. They'll be paid for with printed money, hence.....massive inflation!

Now, if credit default swaps and other credit disasters occur they may dampen inflation for a while, but in the long run we're more like Zimbabwe than Switzerland in terms of our currency.

And quoting Cramer is like quoting a poop flinging monkey at the zoo. Type "don harrold cramer" into youtube search and watch Cramers lies and horrible calls for yourself.

Four Reasons Why Gold's a Slam Dunk Investment

While I agree gold over long periods is not an "investment", it certainly does have periods where it rises in value far faster than fiat currencies decline.

Compare it to a life raft. A life raft isn't an investment either. But when the ship is sinking and you own the life raft, you could get rich really quick as the ship's occupants bid for your raft.

As the world wakes up to the bleak future of fiat currency, it could cause a rapid runup in the price of gold. What else are they going to buy?

cash? - What if they're losing 10-20% there over the next few years of a fiat currency meltdown? Will they "park" their money there for an extended period?

US stocks? - what if we see continued bleak earnings figures and a severe recession? Will they stick it out? They haven't done so in the recent past. And those dividends are paid in ...fiat currency! And if you do see capital appreciation it is in....fiat currency! So your stock has to rise more than 10-20% just to pace REAL inflation after taxes. So that stock that loses "just 10%" for a few years might in 2-3 years be worth half its original value in buying power. If investors wake up to this they might decide gold is a better "investment". What happens to gold prices when massively larger amounts of money flow into it?

Bonds? Ha. In a period of high inflation this is super risky.

Real estate? A tangible asset, right? Hey, if you think the bottom is here, go ahead. You'll get burned most likely. Good luck selling it when buyers can't get loans soon w/o 20% down and stellar credit. These are the same people who couldn't scrape up 3% before. Few will be able to save the down payment in a recession if they couldn't do it before in a boom.

And cherry picking timelines as "proof" of an investment's poor performance..... Puhleese. What if one took a look at the DOW over the last 8 years or so? Or Real estate since 2006? Silly.

Independence Day: Decoupling Gold and Silver from the Dollar

Too cute by half and too long by a mile. "you already know the answer"

How about not trying to win a pulitzer and just write concise informative columns? I already have investing BOOKS.

Bear Market Gold

I bet the government didn't overspend by over $1 Trillion in ANY of those 18 month periods. Well, they will in 2009 and they are at around 2/3 of that for 2008. Last I heard, printing/creating $1T was not great for the strength of the currency.

So much for historical norms. This ain't your father's market. Of course by the pics you guys look like you've never lived a minute as adults through a bad time in the stock market.

The International Gold Rush: Bulls May Soon Be Rewarded

CLH, way to see the macroeconomic picture and back up your opinion with reasoning. Double top? Oh yes, it MUST go down then!
Is that what the tarot cards tell you or something?

Let's see. $500B deficit projected BEFORE the mortgage and other bailouts were counted in. A recession in the works that will cause tax receipts to fall further, increasing the money printing. REAL rates of return on CDs/MM's that are way negative. War with Iran looming. Few stocks looking at anything positive for a year horizon. Gold at about 35% of its inflation adjusted high (which occured during similar economic conditions to today's)

Yeah, what a great time to sell your gold....not.

Why I'm Still Holding Onto Gold

The Author's error points out why fundamentals matter and technical analysis doesn't work. At least not in this environment. Gold is going to over $2,000, trying to time various dips and crests based on the shape of a graph is fine if we were in a stable economic environment, but we're not. It's like watching water slosh in a bucket, timing each wave, except someone is kicking the bucket.

As for John's comments. I'm curious why he thinks inflation is anywhere near over. With 1/2 TRILLION dollar budget deficits it's almost by definition going to continue. There WILL be further govn't bailout programs too, such as the mortgage bailouts being worked on in congress now, plus others to come. We could conceiveably see $1 Trillion deficits within 1-2 years.