Gold specualtion - a bubble .

[Mark T]

A couple of months ago I sold my 1986 $ 50 proof eagle for $ 1750 when gold was around $ 1060 an ounce . At this point in time $ 1750 was on the high end of what those coins were going for a on EBAY. Over the next month as we all know gold went up to just a bit over $ 1200 an ounce. 1986 $ 50 proof Eagles were selling for upwards of $ 2250 when gold peaked in early December. Gold went up about $ 160 an ounce and the selling prices of that one ounce coin went up $ 500. This is proof how speculation based on a frenzy and in my opinion a bubble can effect prices people will pay. Currently these coins are selling in the $ 1700 - $ 1800 range on EBAY.

 

[MBA101]

Is it speculation when the government is printing and spending money way way faster than the economy can produce it, which will continue to be what the government will do as far as the eye can see?

 

I only see bad things happening down the road. There is no stopping the government right now, and they are being as reckless as ever. This economy will not recover until there is certainty that there will be no tax increases, or tax cuts are enacted. Remember, the tax cuts that Bush put in place 8 years ago begin to expire Jan 1 (I know capital gains taxes go up on that day). That will only place more pressure on the economy. I could rant on, but there is nothing out there right now that tells me that things will improve...

[Mark T]

You can slice and dice it anyway you want but main reason for the increase in gold prices was due to the weak dollar. The weak dollar is a product of ridiculously low interest rates that were put into effect in an attempt to fix our lousy economy. We are in this mess now because Greenspam lowered rates to far 8 years ago which in turned provided easy money . We all know the results . I am not really interested in talking economics other then to say I think these artificially low interest rates are like a band aid on a gaping wound. I still think the current spike in gold prices was typical of a bubble. Not to say it wont go up again but I don't see $ 2000 an ounce or anything close to that.

[thebeav]

Proof GAE's are more like coins at this time than they are bullion. You must admit, anyone that was buying proofs and just thinking that they are investing in gold, has a lot to learn.

There is a reason that there is a HUGE premium over melt on these things. That reason is not the fact that someone simply thinks gold is going to go up. Gold speculators, at least the small ones, are buying K-rands and the like, at or near spot.

 

Paul

[RareSov]

Yeah, my mate is sitting on a big big stack

[WinstonWare]

I was thinking of buying some gold a couple of weeks ago but after reading a number of articles I think you may be right about the gold bubble. I never did buy any gold…

[TomB]

The proof AGEs have been bid up to an enormous level at least in part, and likely mostly because of, their relatively recent ability to be included as precious metal assets in an IRA. The mint state AGEs are not afforded this luxury at this time.

[MorganMan]

Mint state AGE's can be held in IRA's

 

1/10,1/4,1/2 and 1 oz sizes....

 

I.R.S. Publication 590, Individual Retirement Accounts

Page 33, "Investment in Collectibles, Exception"

 

"Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department. It can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion."

-------------------------

From another site:

 

The Internal Revenue Service allows many different types of precious metals to be held in Individual Retirement Accounts. The following coins and bullion products will be accepted by Sterling Trust Company and our depository of choice, Delaware Depository Service Company (D.D.S.C./FideliTrade):

 

American Gold, Silver, and Platinum Eagle Coins

 

Australian Philharmonic Coins, Kangaroo/Nuggets, Kookaburras, and Koala Coins

 

Canadian Gold, Silver, and Platinum Maple Leaf Coins

 

Silver Mexican Libertads

 

Platinum Isle of Man Noble Coins

 

Gold bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer and meeting minimum fineness requirements of .995+

 

Silver bars and rounds manufactured by a COMEX approved refiner/assayer and meeting minimum fineness requirements of .999+

 

Platinum bars and rounds manufactured by a NYMEX approved refiner/assayer and meeting minimum fineness requirements of .9995+

 

Palladium bars and rounds manufactured by a NYMEX approved refiner/assayer and meeting minimum fineness requirements of .9995+

 

 

MM

[Houston Investor]

I would not pay a huge premium for AGE's or Proof AGE's when I can invest in an ETF with very little or no commission. What will happen to these premiums on PF AGE if gold falls back to the $500 level?

 

I will buy nice world gold coins which are priced close to melt.

[CHABSENTIA]

You know the old "saw". "If you put 10 different economists chosen at random in a room then you will get 11 different opinions".I will narow them down to two. There is Roubini who believes that there will be an "asset" or "gold"bubble because people are borrowing money etc to invest in gold etc. Roubini also states that we are in a deflationary economy that will not show any signs of improvement for two years.

 

Jim Rogers who is pretty sharp and is big on commodites states that there will be no asset or gold bubble because of the decline of the dollar . Jim Rogers has been a gold bug for a long time.

 

 

First of all, Roubini was one of the few who predicted this econmic mess befon a financialre it was evident. We are in a deflationary economy because of over capacity ,low demand and high unemployment.,I wont go into the details again. I will repeat,however, a post of yesterday. According to Moody Credit card defaults are up and Lenders writing them off has increased to 10.76%.Of course, it doesnt help when some of them increase rates to 29.9%.

 

The index that tracks twenty of the Housing markets in the U.S. is down in 13 of the twenty markets. Of the seven that are up the increase ranges form .3% to 1.2% in price. Cash for clunkers was a joke. There was a temporary increase,however, the most recent report for GM shows them to be down 31% across their whole line. Eight out of 10 cars sold in the Cash for Clunkers program were foreign made. If you divide the amount given to it by the 20% of American cars sold then the average cost to the taxpayer for an american made car was $27,500.00. I saw a report on a financial program that if you took the Money used to prop up the Housing market and dived that number by the number of Houses actually saved then the average cost of that home to the taxpayers was $878,000.00 a home. The average cost of a home in the U.S.is $177,000.00. Futhermore it has been reported that 49% of the homes that were rescued from foreclosure are in foreclosure again. Obama has a new program in which unemployed people who are in danger of losing their homes will get assistance from the government/taxpayer. I have already gone into the details of why the 787 Stimulus that was passed in February is not job creation but wealth redistribution.

 

Even a broken clock is right twice a day,however, in light of above and other factors I see no improvement in an economy that was 70% driven by consumers especially when over 16 million people are unemployed and cant drive it and others are saving and/or paying down debt so it will remain deflationary for a while and there will be no serious declline in the dollar etc and no real inflationary forces and a real rise in Gold.

 

Of course, there could be other factors which are not yet evident and there is also the Psychological aspect. There will probably be an eventual decline of the dollar in light of what is happening. I do not know that exact time frame and either does Jim Rogers who beleives that Gold will go to $2000.00. There is no way that it will go to $15.000 as some predict in the near future unless you believe that hyper inflation along the lines of post war Germany is on the horizon which I seriously doubt. The U.S. will demonetize the debt before that happens and there will be a declinei n the dollar etc which wll depend on the way it is done.

 

Greenspan was not solely responsibe for the present situation. The tipping point was in 1999 when Glass Steagall was repealed and the Community Reinvestment act was revived. Greenspan did provide an environment that made it even worse by lowering rates to an unrealistic figure, He is no more soley responsible then Bernanke who raised rates 14 consecutive times and accelerated a credit crunch. The cards were already. dealt.All Financial Institutions with the exception of the Commercial Banks should have been allowed to fail ala Glass Steagall.

 

If I was to invest in Gold then it would be an ETF etc such as GLD. I dont kow that I would pay a premium on Gold Coins and there is a big one due to te hype. I would not buy Bullion in either Gold or Silver.I would not purchase any Silver Modern coins as a hedge. You can get soemn good deals on Morgan Dollars if you are patient and do soem research because there is a pick-up in their availabilty for soem reason.

[Mark T]

No one is solely responsible for our economic collapse, however Greenspan policies were a very large contributing factor as a catalyst.

I hate low interest rates - I am a saver, low interest rates means a lot less interest income for me. On the flip side I was fortunate that when the stock market collapsed last year I had most of my money in CD's and money market funds. So I can not really complain because I took some of that cash , bought stocks and did very well with price appreciation and covered call option writes.

 

[WinstonWare]

I am a saver

 

With that car? You're a saver???

[Mark T]

I am a saver

 

With that car? You're a saver???

 

Because I am a saver I could afford a Ferrari and pay cash for it .

 

It was not an expensive car .

 

That was the only "splurge " that I ever did in my life.

 

I always wanted one and at my age I thought I deserved it .

 

Think about it , if what I spend is only a small amount of what I have saved would that not make me a saver ?

 

 

 

 

[BillJones]

Is it speculation when the government is printing and spending money way way faster than the economy can produce it, which will continue to be what the government will do as far as the eye can see?

 

I only see bad things happening down the road. There is no stopping the government right now, and they are being as reckless as ever. This economy will not recover until there is certainty that there will be no tax increases, or tax cuts are enacted. Remember, the tax cuts that Bush put in place 8 years ago begin to expire Jan 1 (I know capital gains taxes go up on that day). That will only place more pressure on the economy. I could rant on, but there is nothing out there right now that tells me that things will improve...

 

Sadly I think you are right. The last time this happened in late 1970s, the government had not damaged the economy as badly as it has this time. Higher energy prices trickled down through everything in the economy, and people came to expect price inflation which fed the beast further. It took a recession in the 1980s to wring inflation expectations out of the economy.

 

Now we are embarking on massive government deficits which can only be funded by higher taxes and artificial increases to the money supply. (“Artificial” money supply increase = increases that go beyond the rise of inflation adjusted Gross National Product) The passage of the Cap and Trade bill, a weaker dollar, the prohibition by government to tap new energy sources and the outlawing other energy sources, like coal, will drive up the cost of everything and start a new round of stag-flation. I’ve studied U.S. history extensively in my life, and must say that this is the first time that I can recall government policies that were willfully calculated to make economic conditions worse.

 

An older gentleman in my local coin club sums it up pretty well. “I think that I have lived through the best days of America.” Sadly I think he’s right. It’s no wonder that people are flocking to gold and other precious metals.

 

[RareSov]

The only time I pay a premium on gold coinage is simple

 

If the coin has a lot of collector appeal, it can be a good investment. I feel even the UHR with is eventual (well over?) 100K mintage, is worth the 25%. It is a significant milestone in US coinage history to make it. It is a significant link already from the past being the original vision.

 

Just a plain bullion type design coin in proof though, why ? if its low mintage, sure. If not, just collect the bullion version with coinage premium instead of 25% or more

 

My gold is sovereigns, UHR, and some modern commems. If it does ever drop back to a much lower price, I will put everything I can at the time into bullion (once it is stable and not all over the place) to hedge with gold not paper. Whatever bullion coins I can get for the lowest premium. Could even go with Perth Mint certificates so the coinage isnt even done unless you make a withdrawal. Makes a lot of sense..

 

Silver is probably really the go anyway. It is used for a lot more than just jewellery and electronics, and demand should keep rising. Also likely is that there is no silver bubble (not that I think gold is a bubble either)

 

Question to the gold bubble theorist(s), when did this overinvesting bubble start ? why does 1 oz of gold still buy the same amount of crude oil as a very long time ago ? it never changes except the smaller intra daily sort of fluctuations. When you look at the big picture, the actual value of things measured in gold or oil has stayed equivalent.

 

Inflation will be back. My prediction is for a terrible 2011

[WinstonWare]

I figured you had some savings Mark. I was just joking with you.

[CHABSENTIA]

The Printing presses etc and Speculation are two different things. Speculation may be the Psychological result of the printing presses etc and is a larger percentage of speculation. At any rate, things change from time to time. It used to be that if Gold went up that the Stock market went down. This is not the case today as both the Stock Market and Gold have gone up overall in price. Is it because the Market was too low anyway? Is it because there is more production with a lower number of people?Is it because of what a majority of people see down the line or is it speculation or all of the above. If it is all of ther above then what percentage does each of the factors play?

 

 

Is gold increasing in value because of a decline in the dollar? Will Gold continue to increase if there is a decline in the dollar? Will Gold continue to increase if there is a rise in the dollar or will it decrease? If it decreases then how much will it decrease.? Ten Percent? Twenty percent?

 

I do know one thing. If the dollar declines then there will be an increase in the Price of Oil. Part of it will be speculation on the futures exchange and part will be to adjust for the decline in the dollar. Ther will also be an increase in the price of Oil if there is an increase in demand and there will be an increase of there are larger taxes as is being proposed by the present administration because taxes are usually passed on to the consumer. If the axes are too great then the Oil companies will do as they did in 1973 and will just limit exploration expenses to the same amount as the increase in taxes and the price will even go higher when this limit results in more dependence on foreign oil. Just as the tiippinng point for this economic disaster was 1999nso will this be the tipping point for a larger dependence on foreign oil etc.

 

I know that Oil is used for other things besides gasoline such as Plastics, Rubber and Synthethic Clothes for a few. So I know that the prices will go up fpr things that contain these items. I know that the cost for meat will go up in the grocery stores because it will cost more for the gasoline for the trucker. It will cost more for the rubber on the tires that he eventually has to replace and it will cause more for the plastic wrap that goes around the meat so the customer can see the contents and inspect the package.

 

So things arent as simple as some people would like you to believe.Nobody can tell you the exact price of Oil etc or Gold because of the reasons I mjentioned above and more. How can people understand these actions when they cant tell you the difference between the Tarp and the Stimulus let alone how they are applied etc. How can people understand the under lying movements in the Economic world when they dont understand that the cause of this economic disaster was the result of a a Housing and Credit Bubble and not the tax cuts and/or Deficits that have been going on for some time and that the tipping point was actions taken in 1999?

 

All the Financial Institutions with the exception of the Commercial Banks should have been allowed to fail. GM should have been allowed to fail. They are now asking for and will get another 3.5 Billion. They promise that this will be the last,however, they promised that last time and meanwhile their Auto sales are down an average of 31% across the board. Chrysler who also got a Taxpayer bailout was a Private equity firm owned by an outfit called "Cerebus". The owners of Cerebus refused to inject the money so the taxpayers bailed them out and now they are about to fail and say they will never be able to pay back the taxpayer.

 

When will people realize that they have been and are being scammed? What good is the price of Gold if you can't afford to buy it etc? The unemployment rate of 10% is a joke. People who have been unemployed for six months and longer and are discouraged etc in looking for a job and people who lost full time work and had to accept part time work arent counted, If these people were counted then it would be 17%. It is 20% in some States and 25% during the Great Depression. The Government omits the above and calls them " Under Employed".If you ae one of the more than 16 miilion people unemployed then you can care less about the name they use to forget about and describe you. Ninety five percent of the only 30 percent of the Stimulus that has been spent that was passed in February has gone to wealth re-distribution and not job creation. When the Economy was well it was 70% driven by consumers. Who is going to drive it now with over 16 million unemployed and those that are employed either saving or paying down debt. The amount of Credit card lenders excusinf debt has risen to 10.76% and Moodys who monitors them states that it will increase to12% later this year as unemployment increases it etc.

 

So I am curious about how all this demand etc is going to happen in at least the near term and really how many people understand and are aware of the various economic under pinnings that are down the road and how to prepare for it let alone the number of people that are aware of how we got here in the first place.

[Mark T]

I figured you had some savings Mark. I was just joking with you.

 

I know you just messing with me

[MorganMan]

The Printing presses etc and Speculation are two different things. Speculation may be the Psychological result of the printing presses etc and is a larger percentage of speculation. At any rate, things change from time to time. It used to be that if Gold went up that the Stock market went down. This is not the case today as both the Stock Market and Gold have gone up overall in price. Is it because the Market was too low anyway? Is it because there is more production with a lower number of people?Is it because of what a majority of people see down the line or is it speculation or all of the above. If it is all of ther above then what percentage does each of the factors play?

 

 

Is gold increasing in value because of a decline in the dollar? Will Gold continue to increase if there is a decline in the dollar? Will Gold continue to increase if there is a rise in the dollar or will it decrease? If it decreases then how much will it decrease.? Ten Percent? Twenty percent?

 

I do know one thing. If the dollar declines then there will be an increase in the Price of Oil. Part of it will be speculation on the futures exchange and part will be to adjust for the decline in the dollar. Ther will also be an increase in the price of Oil if there is an increase in demand and there will be an increase of there are larger taxes as is being proposed by the present administration because taxes are usually passed on to the consumer. If the axes are too great then the Oil companies will do as they did in 1973 and will just limit exploration expenses to the same amount as the increase in taxes and the price will even go higher when this limit results in more dependence on foreign oil. Just as the tiippinng point for this economic disaster was 1999nso will this be the tipping point for a larger dependence on foreign oil etc.

 

I know that Oil is used for other things besides gasoline such as Plastics, Rubber and Synthethic Clothes for a few. So I know that the prices will go up fpr things that contain these items. I know that the cost for meat will go up in the grocery stores because it will cost more for the gasoline for the trucker. It will cost more for the rubber on the tires that he eventually has to replace and it will cause more for the plastic wrap that goes around the meat so the customer can see the contents and inspect the package.

 

So things arent as simple as some people would like you to believe.Nobody can tell you the exact price of Oil etc or Gold because of the reasons I mjentioned above and more. How can people understand these actions when they cant tell you the difference between the Tarp and the Stimulus let alone how they are applied etc. How can people understand the under lying movements in the Economic world when they dont understand that the cause of this economic disaster was the result of a a Housing and Credit Bubble and not the tax cuts and/or Deficits that have been going on for some time and that the tipping point was actions taken in 1999?

 

All the Financial Institutions with the exception of the Commercial Banks should have been allowed to fail. GM should have been allowed to fail. They are now asking for and will get another 3.5 Billion. They promise that this will be the last,however, they promised that last time and meanwhile their Auto sales are down an average of 31% across the board. Chrysler who also got a Taxpayer bailout was a Private equity firm owned by an outfit called "Cerebus". The owners of Cerebus refused to inject the money so the taxpayers bailed them out and now they are about to fail and say they will never be able to pay back the taxpayer.

 

When will people realize that they have been and are being scammed? What good is the price of Gold if you can't afford to buy it etc? The unemployment rate of 10% is a joke. People who have been unemployed for six months and longer and are discouraged etc in looking for a job and people who lost full time work and had to accept part time work arent counted, If these people were counted then it would be 17%. It is 20% in some States and 25% during the Great Depression. The Government omits the above and calls them " Under Employed".If you ae one of the more than 16 miilion people unemployed then you can care less about the name they use to forget about and describe you. Ninety five percent of the only 30 percent of the Stimulus that has been spent that was passed in February has gone to wealth re-distribution and not job creation. When the Economy was well it was 70% driven by consumers. Who is going to drive it now with over 16 million unemployed and those that are employed either saving or paying down debt. The amount of Credit card lenders excusinf debt has risen to 10.76% and Moodys who monitors them states that it will increase to12% later this year as unemployment increases it etc.

 

So I am curious about how all this demand etc is going to happen in at least the near term and really how many people understand and are aware of the various economic under pinnings that are down the road and how to prepare for it let alone the number of people that are aware of how we got here in the first place.

 

When you also add the number of employed that are employed by the government, and also add the number that never have been employed (ie...entitlements from birth) you get to around 50% supporting the other 50%, and that is a disaster waiting to happen. We are right around the corner from that other 50% saying "To he%^ with it. I quit!

 

I can speak for my self and say that I am 55, and I am going to be retiring sooner than I planned. Why? Because I saved and paid for what I have (Home, Farm, vehicles...etc). I owe no one anything, and have a nice nest egg. I would keep working, but I am not going to be paying a big hunk of my income to support a money sucking, socialist government. I will just start drawing on my Roth IRA, paying NO taxes, and spending my little nest egg to enjoy what time I have left here on this little ball of dirt.

 

Those of you that sat on your rears, borrowed out the nose, and are living on others taxes, your day is coming soon.....

 

Eventually, you will only get out what you put in......

 

As for gold, I think the best way to collect it wiseley would be to buy it bullion, and use it to make bullets. That way, either way things go, you got a hedge. I call that "double protection"

 

 

MM

[jtryka]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

[Mark T]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

 

 

 

 

You should have been buying the Dow 4000 points ago .

[jtryka]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

 

 

 

 

You should have been buying the Dow 4000 points ago .

 

Let's see, my strategy was to sell the Dow in 1999 at about 11500 to buy gold at $260, and I'll fully admit to missing some gains along the way, but after riding the dow up from 3200 in 1992, I am not going to second quess my own strategy...

[just-john]

I for one agree with Bill Jones and jtryak ,But keep in mind it not what you make it's what you spend . Note you can't eat gold coins or bullion though you could trade some for rice maybe .Paper saying gold is being held for some one or in someone's name SORRY can't trade them for rice.I'm not in the job pool anymore

so sombody can have my old one get first SS check Jan 3 -2010 haven't worked since 2003 been fishing I got mine hope you guys can still get yours.Did you know we made One Million 300 thousand people from Mexico citizens last year ??That's not counting the 20 million already here learn spanish does the unemployment rate change if you get rid of the 20million here that are breaking the law and then were to take the 20 million who hired them to jail think that would give us full employment ?

 

[Mark T]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

 

 

 

 

You should have been buying the Dow 4000 points ago .

 

Let's see, my strategy was to sell the Dow in 1999 at about 11500 to buy gold at $260, and I'll fully admit to missing some gains along the way, but after riding the dow up from 3200 in 1992, I am not going to second quess my own strategy...

 

 

Anyone who purchased stocks in the early 90's, rode the internet tech wave up and held on through early 2000 made good money. Did you have the foresight to buy last October when the market crashed and everyone was running for the hills ??

 

[jtryka]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

 

You should have been buying the Dow 4000 points ago .

 

Let's see, my strategy was to sell the Dow in 1999 at about 11500 to buy gold at $260, and I'll fully admit to missing some gains along the way, but after riding the dow up from 3200 in 1992, I am not going to second quess my own strategy...

 

 

Anyone who purchased stocks in the early 90's, rode the internet tech wave up and held on through early 2000 made good money. Did you have the foresight to buy last October when the market crashed and everyone was running for the hills ??

 

Yes, I bought some more gold when it broke through $800, but the lows in stocks weren't reached until March, but even then, I made most of my money on mining stocks, though for the year here is where I had my money: BGS +143.54%, KO +36.14%, EKX +87.69%, GG +25.17% (the dog of the portfolio, but I've owned it since it was in the single digits so I can't complain), IRR +38.98%, NXG +271.08%, SVM +213.24% and TM +29.77%. For the year, my portfolio was up 111.75%, so you can conclude that my positions we weighted toward the riskier side. So what were your best picks of 2009?

 

[Mark T]

I can only sit back and smile at the experts who are calling gold a bubble at these levels, these were the same folks who couldn't see bubbles in the Nasdaq, or oil or real estate until they had destoyed trillions in wealth.

 

Let's look at the two biggest recent bubbles, the stock market up to 2000 and the real estate bubble through 2007. Let's see, we had mass mania, with people of every sort "investing" in an asset that could never go down. "Stocks for the Long Run" yeah, that worked out well with the CAGR on the S&P 500 down 2.9% for the first decade of the 21st century, get rich from real estate, since that never goes down in the long run. In 1999, cab drivers in New York were giving stock tips, in 2005 everyone was uging me to buy a house, or a second house since real wealth was only built in real estate.

 

So, how many of your co-workers own gold bullion? My office has 25 people and I am the only one. How many ads do you see for buying gold as an investment vs. selling your old gold jewelry? And how many people do you think will be drawn into the gold market with the media touting it as just a bubble. Right now, the smart money is getting into gold, the Rogers and Paulsons of the world. This is way before the mania stage. When CNBC starts touting gold and mining stocks, and everyone in my office is buying gold, then bubble is confirmed and I'll be selling gold and buying the Dow.

 

You should have been buying the Dow 4000 points ago .

 

Let's see, my strategy was to sell the Dow in 1999 at about 11500 to buy gold at $260, and I'll fully admit to missing some gains along the way, but after riding the dow up from 3200 in 1992, I am not going to second quess my own strategy...

 

 

Anyone who purchased stocks in the early 90's, rode the internet tech wave up and held on through early 2000 made good money. Did you have the foresight to buy last October when the market crashed and everyone was running for the hills ??

 

Yes, I bought some more gold when it broke through $800, but the lows in stocks weren't reached until March, but even then, I made most of my money on mining stocks, though for the year here is where I had my money: BGS +143.54%, KO +36.14%, EKX +87.69%, GG +25.17% (the dog of the portfolio, but I've owned it since it was in the single digits so I can't complain), IRR +38.98%, NXG +271.08%, SVM +213.24% and TM +29.77%. For the year, my portfolio was up 111.75%, so you can conclude that my positions we weighted toward the riskier side. So what were your best picks of 2009?

 

 

 

I started buying stocks when the markets collapsed last year. All along I wrote cover call options on all my positions. I was called out on Microsoft and Oracle over the summer but still made about 30 % on each of them. I still have Intel , Yahoo , Applied Materials, and Cisco. I only buy tech stocks. I did not think the markets would move as fast as they did that is why I was called out on Microsoft and Oracle. I also wrote put options on Intel , CSCO and Yahoo , as you know that is another way to bring in money from the put premiums . I will continue to write calls and sell puts in 2010.

I have not figured out how much I am up this year - I think it is over 60 % probably more. Some is realized some is unrealized.

 

[CHABSENTIA]

I have mentioned this before and will mention it again. When I purchased my home in December of 1979 I had to put 20% down and my monthly debt payments couldnt be more then 25% of my income including my mortgage. When I got my paycheck I immediately put 10% into Savings or a Monthly investment plan in the Stock Market. Then I paid my bills. If there was something left over then the famoly might have a pizza etc. If nothing was left over then we did nothing for entertainment. If an emergency developed then it was taken out of savings and I saved more to replenish the spent money to get back to the original amount. Today I am retired and have no debts and dont really worry about tomorrow.

 

At the beginning of last year I predicted Oil would go to $75.00 by Summer and $100.00 by the end of 2009. Well it reached $75.00 by Summer but has never reached $100.00 The forces werent there that drive it such as Speculation, Demand, decline if the dollar etc. Mainly the demand . So it amuses me when the so called experts predict that Gold will go to $2000.00 and soem of these same hypesters predicted Oil at $200.00. There is no such thing as an expert. If there was a person or a group of people that could precist the exact tops and bottoms of anything then all people would have to do is go with them and become wealthy etc. Of course, everybody being right would eventually defeat it.

 

The there are the so called experts who predict a bubble in Gold.. This is also an extreme. I dont invest in Gold in any form and it really isnt that important as a stand alone. . As I mentioned earlier, we are in a deflationary economy and the chances for a rise in the price of Gold over the near term dont exist. Of course, the Stock Market has gone up att he same time as Gold which hasnt happened fpr the most part either in History. Things could change over the next six moinths such as demand and interest rates etc.

 

There is no way that the so called experts can predict a rise or fall in anything because of a changing tide and things yet to come etc within any certainity. Theefore you can follow Roubini who was one of the few to predict this economic situation and has been pretty close up to now or Jim Rogers who has been the perpetual gold bug for some time and predicts $2000.0o and never called the Economic situation.Or you can pick Boone Pickens who made a living and a big siccess in Oil who predicted a $200.00 price in Oil. Even a broken clock is right twice a day and either might be eventually correct. The question is the time frame and how long you are willing to wait.

[BillJones]

I can speak for my self and say that I am 55, and I am going to be retiring sooner than I planned. Why? Because I saved and paid for what I have (Home, Farm, vehicles...etc). I owe no one anything, and have a nice nest egg. I would keep working, but I am not going to be paying a big hunk of my income to support a money sucking, socialist government. I will just start drawing on my Roth IRA, paying NO taxes, and spending my little nest egg to enjoy what time I have left here on this little ball of dirt.

 

You and I are in similar positions, Morganman. My wife and I have paid our mortgage, we saved 20% of our incomes when we were working, and we never spent more than we could afford. By most people’s standards, we could be called “rich,” yet our annual income never came even remotely close to the standard for “rich” that now seems to be in vogue, an income of $250,000.

 

The big kicker now is inflation. Back in the late 1970s, inflation was running at a 15 percent annual clip. Holding very much in cash in that situation is a ticket to the poor house. And yet if the stock market is bad, the only alternatives are real estate, commodities and foreign currencies. At 15% percent inflation, with is modest rate by some standards, it only takes 5 years to cut the value of your bank account in half. To avoid that one must take more risks to keep your head above water. And added risk is something that most older people are NOT equipped or ready to assume.

 

[CHABSENTIA]

You must really be rich as I am doing well and only saved 10%. Of course, my parents paid for college for myself and my brother and our children which did help a little as it as an expense I didnt have to pay.I will bet you that if you compare your assets to those that have made twice as mush are even three times in income that in many cases your assets will be more.

[MorganMan]

I guess it just depends on how you live or want to live. I too have friends that "made" more than I did, but seem to have nothing. Like justjohn said, it is not what you make, but what you spend. I personally have not eaten out at an Appleby's in 4 or 5 months, yet I have friends that eat there 3 or 4 times a week. I drive my vehicles till they are worn out, but have friends that have the latest and greatest SUV or Xover every year. I do not gamble, but have friends that go to the casinos almost monthly. I have pairs of jeans that I have had for 5 years, but I have one friend that will throw his clothes away after 10 or 12 washings and go buy new ones.

 

I have actually asked some what they were going to live on when they retire, and either get "I just won't retire, or "when I get 65, I will get a SS check.

 

I just walk away and think I am glad it is not me.

 

Now do not get me wrong, I am not a hermit. We bought and paid for a new GMC truck and Outback camper in 2008 with some of our savings, and we camp quite a bit (at least until my wife got sick). I also have a boat, and love to saltwater fish. We own 2 Jetskis and take river cruises whan we can. I also make good use of our patio Bar-B-Q grill and I do not have to call friends twice to come eat my ribs.

 

My dad taught me how to save and be frugal. He once told me that if you took all the money in the USA and divided it evenly amongst everyone, that within 10 years, the ones that have money now will have it right back again in 10 years, and the ones that are broke now will be broke again.

 

 

Just a little food for thought.

 

 

 

MM