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Old 05-09-2012, 14:27   #61
devildog2067
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Quote:
Originally Posted by Glocksanity View Post
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

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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:

The Furball Forum


but what about since 1990?

The Furball Forum

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.
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Old 05-09-2012, 14:31   #62
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TO THOSE WHO SAY THE GOLD BUBBLE HAS BURST, PLEASE REFFER TO THIS CHART:



The Furball Forum
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Old 05-09-2012, 14:41   #63
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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.
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Old 05-09-2012, 15:01   #64
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Originally Posted by Flying-Dutchman View Post
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.

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Old 05-09-2012, 22:57   #65
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Quote:
Originally Posted by devildog2067 View Post
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:

The Furball Forum


but what about since 1990?

The Furball Forum

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.
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Old 05-10-2012, 09:13   #66
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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.

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Old 05-10-2012, 09:47   #67
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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.
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Old 05-10-2012, 09:48   #68
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Quote:
Originally Posted by JohnBT View Post
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.
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Old 05-10-2012, 11:25   #69
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Originally Posted by devildog2067 View Post
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:

The Furball Forum


but what about since 1990?

The Furball Forum

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:

The Furball Forum

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."

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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.
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Old 05-10-2012, 11:25   #70
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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.
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Old 05-10-2012, 11:42   #71
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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.

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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.
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Old 05-10-2012, 11:54   #72
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....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?
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Old 05-10-2012, 11:58   #73
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"Stronger" is a relative valuation, yeah?
Indeed.

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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.
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Old 05-10-2012, 17:12   #74
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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?
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Old 05-10-2012, 17:23   #75
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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.
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Old 05-10-2012, 17:26   #76
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Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up
Only if said bad news involves the dilution or devaluation of a national currency. Think Quantitative Easing III IV V etc.
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Old 05-10-2012, 17:47   #77
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Originally Posted by Glocksanity View Post
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.
So now "tanking" means not a loss or even a real-dollar loss, but underperforming gold?

Where do you teach economics and finance again?

I'm done with this thread. CF and Atlas always bring up decent points. This changing shill argument is sophomoric.
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Old 05-10-2012, 18:25   #78
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So you assume that any replacement for the dollar as the world's reserve would necessarily be a currently existing, sovereign currency?
No.

But it's not going to be a basket of currencies, it's not going to be an SDR, and it's not going to be gold.

I can imagine a few things that are not existing sovereign currencies--maybe something like an energy credit (literal energy, like a gigajoule dollar). I'm not an economist and I don't have the imagination to come up with something truly revolutionary (if I did, that's what I'd be doing for a living right now!).
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Old 05-14-2012, 11:57   #79
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Downward slide continues today.
Damn, I'm taking a beating too on the Palladium I bought recently.
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Old 05-14-2012, 12:04   #80
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maybe something like an energy credit (literal energy, like a gigajoule dollar).
I don't think modern economics has really adopted the idea of currency as a representation of "units of work" and I think there is much to be learned from understanding that relationship. I'm about to spend a lot of my own "units of work" on learning more about economics and this is one area I hope to explore. It's no "Higgs hunt" but I think it can contribute.
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