[devildog2067]

Originally Posted by Glocksanity

Actually you can. Buffet is clueless when it comes to gold.

Warren Buffett has a very specific talent--he can look at something and figure out what it's worth.

It's a limited talent, and he's the first to admit it. But to think it doesn't apply to gold is simply insane. He's made money moving in and out of precious metals many times.

He has done extremely well for some year, but the last ten his stock has tanked.

Uh...

[Glocksanity]

Originally Posted by devildog2067

You have it entirely wrong. Picking one stock is insanely difficult. But that's not the point.

One stock is the point if people are going to compare gold versus Apple the last ten years.

The point is that you don't HAVE to pick one stock. On average, the performance of the entire market will beat gold.

Well it hasn't over the last twelve years. Now, what does the future hold? That is the question. I'll stick with the hot hand, gold.

[Bilbo Bagins]

Originally Posted by cowboy1964

Sure you can. Just like $3 gas can be sustained forever. It ain't ever going back to $1.50 again. Gold is priced in dollars, just like gas is. The dollar is going to continue to fall, not magically rise. Been to the grocery store lately?

I'm sure they said that about $2 gas in during Jimmy Carter's term

For crying out loud, 2009 even in the Obama administration where the national aver gas was well under $3 a gallon. 2009 it was $1.84, 2010 it was 2.78.

You want it $3 gas for another 4 years, don't vote for Romney. Pretty much LIKE GOLD people look at the current big numbers and not what the price was just a few years ago and historically over time.

Gas was under $2 between 1981 and 2007, then it spiked near the end of GW Bush's term, and it spiked again in 2010 to present.

Just a few years ago gas was selling for $1.60 and gold was $400 an ounce.....but ,but....you should put your money in Oil and Gold last year because Oil was selling for $120 a barrel and Gold was selling for $1800 an ounce.

Now where are you

If you bought a Barrel of Oil and a ounce of gold last year you would be down about $320. Way to protect your wealth.

[Flying-Dutchman]

Originally Posted by Dennis in MA

Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up. Now you've introduced ANOTHER sub-rule to me. It's almost like you are saying that it depends on what investors want or fear and that it might not accurately represent the true cost.

Nahhhh, can't be. Buy gold - it always goes up.

I just made up that rule like the talking heads do every day on TV to explain the daily market moves when in reality they have no idea unless they are Soros or Niederhoffer.

The rule is there is no rule.

Gold is money but to invest you want your money circulating; gold is the exact opposite as it just sits there.

I salute those who went all in gold at $289; it is all so crystal clear now but I did not predict that the Government would act in such a fiscally reckless manner.

To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

[devildog2067]

Originally Posted by Glocksanity

Well it hasn't over the last twelve years.

But it has over the last fifty, and hundred, and two hundred. Why are you looking at only the last twelve years? Why not some other arbitrary time period?

Gold is down three dollars in the last 30 minutes!

[JohnBT]

"but going forward from today, tell me what one stock is going to outperform gold?"

The way gold is going now - down - any stock will outperform gold.

The way the Euro is going, the dollar will be in favor for quite some time.

I know one thing, my father and I began seriously saving scrap silver/coins in the '50s and '60s and added some gold along the way and you know what, it's still sitting there and has not produced one penny of income. It just sits and I'm too lazy to sell it.

Now that CD rates are near zero, I think some days that I should take my mother's CD money and buy gold. Let's see, call it $1600 an ounce divided into $500,000 equals what, about 20 pounds? Geez, think of the storage fees. But then if I needed the money for her nursing home bills I'd take a beating on the sales commission. Her yearly bill is right at $100,000. This is year six.

It was a good first quarter for the stock market. I have some index funds that nearly doubled gold's 52-week performance.

John

[Glotin]

Originally Posted by Glocksanity

Well it hasn't over the last twelve years. Now, what does the future hold? That is the question. I'll stick with the hot hand, gold.

It's amazing to me how your brain wraps itself around this one.

You realize that in the history of the world, the hot hand has eventually always failed? Be it real estate, stocks, oil, gold, tulip bulbs, what have you. Again, the difference being that real estate and stocks are productive.

"Chase what's hot, get burned"

What is smart at one price is foolish at another.

[eracer]

Originally Posted by DanaT

You guys dont have a couple pounds of gold and platinum laying around?

-Dana

Selma Hayek is bathing in my solid gold bathtub as we speak. Wait... she's calling. Gotta run!

[Glocksanity]

Originally Posted by devildog2067

Uh...

Looking at the performance of gold vs. Berkshire since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

No wonder the old man hates gold.

[Glocksanity]

Originally Posted by Glotin

It's amazing to me how your brain wraps itself around this one.

You realize that in the history of the world, the hot hand has eventually always failed? Be it real estate, stocks, oil, gold, tulip bulbs, what have you. Again, the difference being that real estate and stocks are productive.

"Chase what's hot, get burned"

What is smart at one price is foolish at another.

Looking at the history of the world, gold has always lasted as money. Paper, not so much. The US dollar is getting ready to be abandoned as the world's sole reserve currency. Prepare for it or get hammered. Pretty simple.

[devildog2067]

Originally Posted by Glocksanity

Looking at the performance of gold vs. Berkshire since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

Hey, I can read SeekingAlpha too! Link

Originally Posted by From the linked article

Looking at the performance of the two assets since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:




but what about since 1990?



As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

[greatwun]

TO THOSE WHO SAY THE GOLD BUBBLE HAS BURST, PLEASE REFFER TO THIS CHART:

[wjv]

PMs always take a summer dumps. Typically starting in May.

Last year was an exception. Around Sep-Oct things will start to ramp up again.

[arclight610]

Originally Posted by Flying-Dutchman

I just made up that rule like the talking heads do every day on TV to explain the daily market moves when in reality they have no idea unless they are Soros or Niederhoffer.

The rule is there is no rule.

Gold is money but to invest you want your money circulating; gold is the exact opposite as it just sits there.

I salute those who went all in gold at $289; it is all so crystal clear now but I did not predict that the Government would act in such a fiscally reckless manner.

To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

Don't count on it. Do you know who Romney's biggest campaign donor is? Goldman Sachs. Do you know who Romney's biggest campaign donor is? Goldman Sachs. Banks are playing both sides.

EDIT: I mistyped that. Goldman Sachs is not Obama's top donor, just one of the top.

[certifiedfunds]

Originally Posted by devildog2067

Hey, I can read SeekingAlpha too! Link



You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:




but what about since 1990?



As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

DD - 2000 is relevant b/c that's when the gold bull started running.

[JohnBT]

Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

[eyesnorth]

Originally Posted by JohnBT

Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

Any long term mortgage/gold comparisons? Say a couple hundred years or so, for comparison.

[.264 magnum]

Originally Posted by JohnBT

Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

For the record that gold's modern era high. It's all time A.D. high was most likely during "The High Middle Ages". One of my econ. profs did the calculations IIRC in ~1130 AD England gold was an inflation adjusted ~$39,000oz.

[Glotin]

Originally Posted by devildog2067

Hey, I can read SeekingAlpha too! Link



You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:




but what about since 1990?



As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

The longest available timeframe for that data is from 1965 when Buffett took over Berkshire Hathaway. Since 1965:



http://www.forbes.com/sites/steveden...nvest-in-gold/

In the past 20 years gold has increased 376% while Berkshire Hathaway has risen 1330%.

Warren Buffett on CNBC: “When we took over Berkshire, it was selling at $15 a share and gold was selling at $20 an ounce. Gold is now $1600 and Berkshire is $120,000. Or you can take a broader example.

You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset.

Why do you think gold bugs get so irate? Because they really do come out. ... You can knock almost any investment and nothing happens. But when you talk about gold it’s different. Of course that says something about their motivation for ownership. They want people to agree with them. They want everybody to get so scared they run to a cave with gold. Caves might be a better investment than gold. At least they’re not producing more caves all the time. So they want people to be as afraid as they are. Incidentally, they’re right to be afraid of paper money. Their basic premise that paper money around the world is going to be worth less and less over time is absolutely correct. They have the correct basic premise. They should run from paper money. But where they run to is the mistake."

Originally Posted by eyesnorth

Any long term mortgage/gold comparisons? Say a couple hundred years or so, for comparison.

I'm not sure what you're asking.

Inflation greatly helps a mortgage holder over time; not so for gold, as pointed out above.

[Glocksanity]

Originally Posted by devildog2067

The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

That is where we disagree. The dollar will be abandoned as the world's reserve currency. It's just a matter of when, not if. Nothing lasts forever. Ask the Romans. I think in the next decade or so it will happen. Gold will play a big part in Central Bank reserve currency transactions. In order for that to happen, gold will be repriced way higher than it is now.

You obviously disagree and time will reveal who is correct.

[devildog2067]

Originally Posted by Glocksanity

That is where we disagree. The dollar will be abandoned as the world's reserve currency. It's just a matter of when, not if. Nothing lasts forever.

I don't disagree. I absolutely agree with you. The dollar will not last forever.

I think in the next decade or so it will happen. Gold will play a big part in Central Bank reserve currency transactions. In order for that to happen, gold will be repriced way higher than it is now.

Here's where you're wrong. The dollar will be displaced when something stronger comes along. As of right now, there simply does not exist a contender.

[Atlas]

Originally Posted by devildog2067

....The dollar will be displaced when something stronger comes along. As of right now, there simply does not exist a contender.

"Stronger" is a relative valuation, yeah?
Your phrasing implies that "when something stronger comes along" is of necesity far into the distant future...


With the Fed in recent months buying more than 50% of the US's debt, how strong will "strong" be in five years, in ten years?

[devildog2067]

Originally Posted by Atlas

"Stronger" is a relative valuation, yeah?

Indeed.

Your phrasing implies that "when something stronger comes along" is of necesity far into the distant future...

Take a look around--whose economy do you think is stronger than the US's today? Who will be stronger in the next 10 years?

The answer is, frankly, no one. No one even begins to come close. Will the answer be different in 20 years? Maybe. Depends a lot on what China decides to do with respect to exploiting their natural resources between now and then.

But there's definitely no one whose currency will replace ours within the next ten. Everyone else has problems, just like we do.

[Atlas]

Originally Posted by devildog2067

Indeed.



Take a look around--whose economy do you think is stronger than the US's today? Who will be stronger in the next 10 years?

The answer is, frankly, no one. No one even begins to come close. Will the answer be different in 20 years? Maybe. Depends a lot on what China decides to do with respect to exploiting their natural resources between now and then.

But there's definitely no one whose currency will replace ours within the next ten. Everyone else has problems, just like we do.

So you assume that any replacement for the dollar as the world's reserve would necessarily be a currently existing, sovereign currency?

[Sporaticus]

Interestingly enough, Michael Murphy predicted a retracement in silver to around $29 as part of a typical cycle. I'm waiting on Bernanke to start QE III and I am getting in big time.