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bosco115

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  • Russian Gold Reserves Rise In June: Why Is Russia Still Buying Gold? [View article]
    You think aliens, which have mastered interplanetary travel and faster than light spaceflight, would have any use for gold, which, to them, is simply another element on the periodic table? Your delusion is thinking that gold is inherently valuable. It is not.

    Gold has value because we all agree it has value. True or false?

    A US Dollar has value because we all agree it has value. True or false?

    If you answered true for both, then IT'S THE SAME THING.
    Jul 30, 2015. 11:50 AM | 1 Like Like |Link to Comment
  • Russian Gold Reserves Rise In June: Why Is Russia Still Buying Gold? [View article]
    Debating a goldbug who is repeating "gold is real money" is identical to debating a Christian who is repeating "Christ is Lord". I don't accept either thesis, and it's usually a waste of my time.

    Your first point is that gold investment is on the opposite side of western economies regarding debt levels. Bond yields for developed economies have actually dropped, not increased, in response to rising debt levels. Gold has fallen at the same time. Your correlation is correct, and you'll get no argument from me.

    Your second point is that gold is an asset with no counterparty risk. I disagree, and this stems from the currency question. Gold is only worth what others are willing to pay for it. Its price is not supported by industrial applications or jewelry demand. The associated counterparty risk is that gold investors will attribute less value to gold than it currently has, or perhaps even no value at all. That is a non-zero counterparty risk.

    Your third point is that gold is a universal currency. Why is gold real money? It has an assigned value based on what others will pay for it. It is not intrinsically valuable. Any statement of intrinsic value of gold is false, regardless of historical price action. Correlation with tulip bulbs is fair game. Why is the USD real money? It has an assigned value based on what others will pay for it. It is not intrinsically valuable.

    Your fourth point is to note that central banks hold gold and questioned why. The answer is inertia. The central banks had reserve requirements from previous systems of gold-backed currencies. When currencies evolved off gold, there were no requirements to sell this gold, so many held out of pure inertia. Some have even sold significant holdings with no measurable effect on their currency. How a relic of a system used decades ago represents a compelling investment thesis is beyond my comprehension.

    Now that I've answered your questions, here is my own. Why invest in gold when you can invest in guns, water purification, windmills, and seeds? Hear me out. Investing in gold means you've taken the jackass investment approach. You think there's too much debt, too many liabilities, and the system will come crashing down. You're the jackass old curmudgeon. But if the system comes to a complete crash, gold will be worthless as well since it has no intrinsic value. You can't eat it or generate electricity with it.

    Paying for a loaf of bread in a post-apocalyptic world with your 26 gold coins arrives at some curious irregularities. Do you pay for the bread with a whole coin and hope the system improves before you need a 27th loaf? Do you pull out your pocket knife and shave down the coin into a fractional payment? Do you use the pocket knife instead to neutralize the merchant and take his bread stock? So many questions.

    Wouldn't the money spent on those 26 gold coins be of much better use if they were invested in sleeves of ready-to-plant seed, a windmill turbine construction kit with dynamo, and weapons for protection?

    The answer is that the jackass investment thesis of the goldbugs is they think the world will come crashing down, but not too much. Maybe just a semi-crash where people aren't actively killing each other for food and shelter. Because then it would expose gold as the fiat currency it really is, just like all the others.
    Jul 28, 2015. 11:19 AM | 3 Likes Like |Link to Comment
  • Russian Gold Reserves Rise In June: Why Is Russia Still Buying Gold? [View article]
    So in exchange for fuel, Russia gets a hunk of shiny metal that it puts in a vault. A hunk of metal that depreciated from $1900/oz to $1100/oz in three years. Sounds like the West is making out like bandits, no?

    Why do goldbugs act like they're so much smarter than everybody else?
    Jul 27, 2015. 04:57 PM | Likes Like |Link to Comment
  • Russian Gold Reserves Rise In June: Why Is Russia Still Buying Gold? [View article]
    Stocks. Five years is an intermediate time horizon, and even if the S&P500 fell off a cliff, five years is a long time for it to crawl back into positive territory. Alternatively, if the economy picks up, corporate earnings will show it, and prices will rise.

    I don't like gold as an investment. Not at this price, not at $600/oz. The investment theory of the goldbugs is bogus. It is not a hedge against inflation. It is not "real money" that can combat fiat currency. It's as phony as any other fiat currency because it has no use other than an arbitrarily-assigned value. It blows bubbles to $1900/oz and collapses down to $1100/oz. That doesn't exactly scream "stable" if you can lose 40% of your value in three years. And finally, our economy boomed and busted harder and more frequently when our dollars were gold-backed.

    So why exactly do we follow this so closely? It's junk. I'd rather pay more attention to copper.
    Jul 27, 2015. 12:03 AM | 2 Likes Like |Link to Comment
  • Russian Gold Reserves Rise In June: Why Is Russia Still Buying Gold? [View article]
    >We do not see a reason why investors should not consider having a large exposure to gold with positions in physical gold and the gold ETFs.

    Have you looked at a price chart for gold lately? I can think of quite a few reasons.
    Jul 26, 2015. 07:13 AM | 1 Like Like |Link to Comment
  • Which Side Of Goldman Sachs Is Right About Gold? [View article]
    FYI, you hit the nail on the head with this comment nearly two years ago.
    Jul 24, 2015. 09:17 AM | Likes Like |Link to Comment
  • The Only Way I'd Invest In Gold In 2014 [View article]
    Revisiting this after a year and a half. Gold is still circling the drain. And very likely, the gold bugs here have not changed their mind at all. Gold investors are, by far, the most stubborn of all.
    Jul 24, 2015. 09:14 AM | Likes Like |Link to Comment
  • The Only Way I'd Invest In Gold In 2014 [View article]
    Why? Why is gold useful in a survival strategy? I don't get it. In a post-apocalyptic economy, am I shaving the six gold coins in my portfolio ($10,000 worth) into gold dust, which I then pay in pinches at the local grocer in exchange for bread?

    It doesn't work like that. It's just another form of currency that has value because we arbitrarily assign it value. Gold is just as worthless in doomsday as currency is. The only things that matter at that point are weapons, food, water, fuel, and shelter. If you're going to invest in doomsday, don't half-ass it by putting money on a shiny metal. Invest in a couple shotguns, an isolated cabin, and some wind turbines.

    Short of that, gold is a shit investment and a waste of your time.
    Jan 9, 2014. 05:11 PM | Likes Like |Link to Comment
  • Which Side Of Goldman Sachs Is Right About Gold? [View article]
    Confidence in gold is shot after investors were duped for the past two years to believe that it is a stable investment tied to the rate of inflation. The price spike to $1900/oz and subsequent drop to $1200/oz in one year are proof that it is priced simply on what the next fool is willing to pay for it.

    Gold will continue its trend lower for the next several years.
    Oct 9, 2013. 10:51 AM | 5 Likes Like |Link to Comment
  • Apple (AAPL): FQ1 EPS of $13.81 beats by $0.37. Revenue of $54.51B (+18% Y/Y) misses by $220M. 47.8M iPhones, 22.9M iPads, 4.1M Macs, 12.7M iPods. Expects FQ2 revenue of $41B-$43B, below $45.6B consensus. Shares -4.3% AH. (PR[View news story]
    People who bought NFLX >$300 will wish they bought your SPY ETF.
    Jan 23, 2013. 04:59 PM | 1 Like Like |Link to Comment
  • Did we miss a major central bank tightening overnight? The precious metals sector is lit up bright red following the Fed's addition to QE and what looks like the promise of ZIRP for at least 2-3 more years. GLD -1.1%, SLV -2.2% premarket. Copper and oil join in, the red metal -1.4%, and WTI crude -0.6%[View news story]
    "Inflation drives the price of gold."

    There's your flaw. Speculation is driving the price of gold, not inflation.
    Dec 13, 2012. 08:30 AM | 4 Likes Like |Link to Comment
  • Apple (AAPL -3.6%) has sold off in early trading, apparently on news clearing firms are raising their margin requirements for positions due to fears of being too heavily concentrated in the $526B company. One firm, COR Clearing, raised its margin requirement to 60% from 30%. [View news story]
    Please talk to Cisco and GE about the benefits of diversification.

    This company is trading at 12.5 TTM P/E. Their entire lineup is less than six months old, they're all available for the holiday shopping season, and they're selling so fast that they can't keep them in stock. After January earnings, the P/E is going to be insanely low if the price doesn't move.

    Point being, they don't need to create any new product lines to justify a radical price increase. The PPS could hit $800 today, and it'll still have a lower valuation than Google, a company that is growing slower.
    Dec 6, 2012. 09:55 AM | 2 Likes Like |Link to Comment
  • Apple (AAPL -3.6%) has sold off in early trading, apparently on news clearing firms are raising their margin requirements for positions due to fears of being too heavily concentrated in the $526B company. One firm, COR Clearing, raised its margin requirement to 60% from 30%. [View news story]
    You're right, movies555. Except for desktops, laptops, personal music players, smartphones, tablets, home media centers, hardware components, software, movies, music, and books, they just aren't very diversified.
    Dec 5, 2012. 01:54 PM | 5 Likes Like |Link to Comment
  • Apple Vs. Microsoft: The Tide Is Turning [View article]
    "No one buys into a company because of the dividend. A dividend doesn't make you a good company or even a decent company."

    You clearly haven't been keeping up with returns for various asset classes over the past few years. Dividend payers have been outperforming all other assets by a wide margin. The hunt for yield is having a huge effect.
    Oct 31, 2012. 01:25 PM | 10 Likes Like |Link to Comment
  • Where Is The Upside In Apple? [View article]
    Yes, that P/E of 13.6 is HORRENDOUSLY overvalued.

    Please tell me your thoughts on the valuations of companies like Coca-Cola, P&G, Disney, and Merck. All are well above 13.6. So these must be even more egregiously overvalued, right?

    Enjoy your RIMM stock.
    Oct 31, 2012. 07:27 AM | 9 Likes Like |Link to Comment
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