Gold-good investment or hype.

CrackerJax said:

They're like super geniuses ... but not as smart.

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I'm not good with finances and I'm definitely no investing guru. It seems to me that the average person is going to lose when it comes to buying gold, just like most people seem to lose at playing the stock market. It can get so complicated for most people that we just don't understand the risks as well as the benefits. The investment companies want to fill our heads with all the positives.............."Look at the shiney gold coins, pick up the phone and call (camera cuts to hot chick holding gold bricks over her bare nipples like large rectangular pasties)"

There was a good article in the NEW YORKER magazine in Feb 1980 that explains golds purpose in our world. Ten thousand years ago an ounce of gold bought X number bushels of grain, allowing for a farmer's cost. Today that same ounce of gold buys the same amount of grain. Gold is a basis. If you have ever followed gold prices, you will notice in times of stress the price will rise and as the situation stabilizes then the price will fall. But it always falls to a price that was higher than it was before the stress. In 1980 gold went from $800 oz to $650 in one day of trading before it finally settled at $300 oz where it has been until recently. The only ones making money are the gold dealers.

peace
cof

curious old fart said:

There was a good article in the NEW YORKER magazine in Feb 1980 that explains golds purpose in our world. Ten thousand years ago an ounce of gold bought X number bushels of grain, allowing for a farmer's cost. Today that same ounce of gold buys the same amount of grain. Gold is a basis. If you have ever followed gold prices, you will notice in times of stress the price will rise and as the situation stabilizes then the price will fall. But it always falls to a price that was higher than it was before the stress. In 1980 gold went from $800 oz to $650 in one day of trading before it finally settled at $300 oz where it has been until recently. The only ones making money are the gold dealers.

peace
cof

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I'm sure there are some savvy speculators who are doing pretty well also.

^^^^^

Brilliant. Insightful. Plus rep to the curious old fart above me.

Never buy high.

CrackerJax said:

Never buy high.

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.......or snake oil.

Invest your money in chocolate bonds. Everybody loves chocolate! and if the stocks go down, you can eat them - because they're made of chocolate.

This is the time of Obama, so buy dark chocolate bonds. Guaranteed TARP money support.

Very good first thread guys. good way to kick the forum off. Dont do much gold investing, I tend to put alot of stocks into rev share oil companies.

rollitup said:

Very good first thread guys. good way to kick the forum off. Dont do much gold investing, I tend to put alot of stocks into rev share oil companies.

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Alright! A post from the big guy himself. You heard it here folks. Be careful with gold. Most of what I read about having a balanced portfolio reccomend no more than 20% of your investments be in gold or other precious metals. Personally I think 20% seems a little high but as I said before I am no investment wizard.

10% is a bit more realistic.

lol the way to get gold bars is go to the jewelers suppliers or jewelers and get it in it purest form! i my self own like 6 bars 10oz each its pretty nuts its always good to go with gold better then useless paper money!

http://www.apmex.com/Product/30945/10_oz_999_Fine_Gold_Bar___Pamp_Suisse.aspx
http://www.apmex.com/Product/30945/10_oz_999_Fine_Gold_Bar___Pamp_Suisse.aspx

http://www.bulliondirect.com/index.jsp

The key is to pay the lowest % over spot price.

Problems with gold are many tho.

Not that easy to convert
Not that easy to transport

Right now, I would advisde against buying any gold. That ship has sailed.

The key to all investments is to figure out where the herd is going and get there first.

The herd has already been grazing on gold for awhile now.

Best to find the next thing.

CrackerJax said:

http://www.apmex.com/Product/30945/10_oz_999_Fine_Gold_Bar___Pamp_Suisse.aspx

http://www.bulliondirect.com/index.jsp

The key is to pay the lowest % over spot price.

Problems with gold are many tho.

Not that easy to convert
Not that easy to transport

Right now, I would advisde against buying any gold. That ship has sailed.

The key to all investments is to figure out where the herd is going and get there first.

The herd has already been grazing on gold for awhile now.

Best to find the next thing.

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A good rule of thumb might be: by the time you start seeing commercials for a particular investment, it's probably not a good idea to get into it.

Yes, if the guy next door knows about it (or worse, if you see it on TV)... u've missed the profit wave.

Yeah, the time to invest in gold is when the economy is robust.

Warren Buffet said, and I paraphrase: When other people are greedy, be afraid. And when other people are afraid, be greedy.

Minted gold coins are the easiest to negotiate: Krugerrands, Double Eagles, etc.

At this point gold would just be a hedge, or a move of desperation should the economy crash.

When it comes down to it, both gold and diamonds are valuable ... because they are pretty. Basically our entire economy is just a reflection of man.

Vanity

CrackerJax said:

When it comes down to it, both gold and diamonds are valuable ... because they are pretty. Basically our entire economy is just a reflection of man.

Vanity

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They are also finite in quantity.

It's a controlled scarcity though. I can think of far rarer elements than gold or diamonds. Certainly these precious metals (including diamonds) gained their appeal before our technology could actually appreciate their properties (electrical conduction, hardness).

I tend to agree with those of you who think that gold is overvalued now.
If it pulls back to about $900 or so it would make sense to take a position. I think physical possession makes sense (coins or bullion only as opposed to Mutual Funds or ETFs)

Another good inflation hedge I have been recommending for several years are TIPS---
Treasury Inflation Protected Securities.
These are US Treasuries which are pegged to the CPI...the principle of the Bond increases proportionately with the consumer price index.
I have some strong reservations however about the creditworthiness of US treasuries at this point in time.
We truly are sailing uncharted financial waters with the wiz-kids we have at the helm of our ship of state.
Caution and diversification are more important than ever in the investment game.