Gold Prices

Tom-D

Tom-D

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Tom-D
have you been watching?

$$$1966. & change
 
Always buy at the top of the bubble. I just wish I’d bought back in 2011 so I could have watched it decline in value for half a decade before recovering. That would have been fun.

Good times.
 
Gold can be flashy & have some good runs. It’s also had many, multi-year spans of lackluster returns. I like to take some of those spans & compare to the S&P 500. Much of the time, a diversified stock portfolio trounces precious metals.

I have a relative always talking about gold & silver market timing. Looking at historical returns mentioning buying & then selling at the best times. I tell him it’s kinda easy looking back, but how are you on those decisions going forward?

For the most part, a portion of the peak of one’s ‘investment pyramid’ is enough with precious metals. Yes, there can be some special circumstances.
 
I think it’s rational to keep a small portion of one’s portfolio in precious metals - a common, if somewhat arbitrary target is 10%.

But it’s best to view it not as an investment, per sé, but as insurance or a hedge against inflation, or, worse, hyperinflation. I think speculating on gold’s price is a fool’s errand, but it’s a game some like to play, so more power to them. But trying to “time” markets does not have a great track record, though even a random walk in prices will generate some winners - and of course some losers - simply by chance.

I have some gold coins that are now worth roughly 6x what I paid for them - not factoring in inflation. Yay! But in the 40 years or so I’ve held them, a similar amount invested in the stock market with dividends reinvested would have likely outperformed gold substantially.
 
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If you believe these guys, gold is cheap today at any price. [I think that if that's true, 99% of us are already screwed. I'm not rushing out to buy gold]
http://www.gata.org/node/14839 : Gold already is so important that Western central banks -- particularly the U.S. Treasury and its Exchange Stabilization Fund, the Federal Reserve, and allied central banks -- rig the gold market every day, even hour by hour, to control and usually suppress gold's price.
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I guess everyone here believes the US dollar is rock solid.

Gold is a currency hedge, not much else. The miners are another story. A 10 stock portfolio from a paid newsletter is up 40% in less than six months. I'm not a buy and hold believer (but a big bank, ML, UBS, etc. can't send a sell signal to all their portfolio clients, so they sell buy and hold). My long term time horizon is 3-5 years but everything I own has a trailing stop.
 
Gold's currently at 1963.40. Everyone knows I believe in the Efficient Market Hypothesis, meaning...

1) The price right now is exactly where it "should" be, and...

2) For all practical purposes, it's pretty much exactly as likely to go up as down going forward.

So, I'm curious as to why some think its a good time to sell. Everyone can see the same charts and reports and forecasts that you have access to, so it sure seems like all that is already factored into the current price.
 
FastEddieB said:
So, I'm curious as to why some think its a good time to sell. Everyone can see the same charts and reports and forecasts that you have access to, so it sure seems like all that is already factored into the current price.
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There's something to be said for Popular Delusions and the Madness of Crowds. In 2006, in theory (or hypothesis), the market was just as likely to go up as down. But some people looked at irrationality in housing markets and thought, efficient markets or not, something had to give in the next few years. Of course, the market can stay irrational longer than you can stay solvent too.

I don't have a strong positive or negative opinion on gold, just throwing that out there.
 
FastEddieB said:
...So, I'm curious as to why some think its a good time to sell. Everyone can see the same charts and reports and forecasts that you have access to, so it sure seems like all that is already factored into the current price.
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If you bought physical gold in say 2001, now might be an excellent time to sell. Like the old saying goes, "we don't know what we don't know!"
 
wilkersk said:
If you bought physical gold in say 2001, now might be an excellent time to sell. Like the old saying goes, "we don't know what we don't know!"
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The trend is always up.. it may hiccup but it will go up again.
Don't the need the cash now, so wait. the price is lower than I bought So I'm good
 
F01LA said:
There's something to be said for Popular Delusions and the Madness of Crowds. In 2006, in theory (or hypothesis), the market was just as likely to go up as down. But some people looked at irrationality in housing markets and thought, efficient markets or not, something had to give in the next few years. Of course, the market can stay irrational longer than you can stay solvent too.
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The people who thought something had to give were the rational ones. I heard someone say "No, the old rules are dead, these are the new rules". Any time you hear that, get ready for a Big Oops. Young quants inside Fannie Mae rewrote the rules on housing loans, effectively writing all the risk off as systemic. Sure enough, when the risk popped, it nearly took down the entire system.

The previous time I remember hearing it was 1999, just before the 2000 dot com crash.
 
I thought the thread might have been about the prices for used 172 s .
 
As the saying goes, no one ever got hurt taking a profit. The problem is finding the next best alternative.
 
Chip Sylverne said:
As the saying goes, no one ever got hurt taking a profit.
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I hate that expression*, though it’s trivially true.

Buying AAPL for $20 in the 1980’s and selling it for $30 would have been a nice return on investment. But a HUGE lost opportunity.

The real profits lie in buying and holding good companies as they grow. Think AAPL, MSFT, AMZN, GOOG, TSLA, NFLX. Grabbing short term profits here and there is very much “Penny wise and pound foolish”.


*I’ve always heard it as “No one ever goes broke taking a profit”. Same idea, though.
 
frfly172 said:
I thought the thread might have been about the prices for used 172 s .
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I'm waiting for someone to post a 172/ounces-of-gold ratio chart for the last 50 years, so we can understand when each has been the better buy :p
 
FastEddieB said:
I hate that expression*, though it’s trivially true.

Buying AAPL for $20 in the 1980’s and selling it for $30 would have been a nice return on investment. But a HUGE lost opportunity.

The real profits lie in buying and holding good companies as they grow. Think AAPL, MSFT, AMZN, GOOG, TSLA, NFLX. Grabbing short term profits here and there is very much “Penny wise and pound foolish”.


*I’ve always heard it as “No one ever goes broke taking a profit”. Same idea, though.
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It’s more than trivially true. If your goal is to not go broke, it’s all you need to know. Few people in the market have not going broke as their goal for investing.
 
FastEddieB said:
I hate that expression*, though it’s trivially true.

Buying AAPL for $20 in the 1980’s and selling it for $30 would have been a nice return on investment. But a HUGE lost opportunity.

The real profits lie in buying and holding good companies as they grow. Think AAPL, MSFT, AMZN, GOOG, TSLA, NFLX. Grabbing short term profits here and there is very much “Penny wise and pound foolish”.


*I’ve always heard it as “No one ever goes broke taking a profit”. Same idea, though.
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That's the problematic "next best alternative" part of what I said. There may not be one. Even with a buy and hold strategy, it makes sense to do some homework periodically to reinforce how brilliant you were on choosing the stock in the first place.
 
Salty said:
It’s more than trivially true. If your goal is to not go broke, it’s all you need to know. Few people in the market have not going broke as their goal for investing.
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Perhaps more should.
 
Gold prices rise in times of uncertainty. The last time they went up was 2008. The overall price may go up, I really don't know. I never thought of gold as a good investment, as I doubt it goes up enough to compete with other investment instruments.
 
But back to gold. I view gold more as an inflation hedge or indicator of political stability more than a speculative investment. Some are pointing out the current rise mirrors the rise that foretold rapid inflation of the 70's. Makes a little sense when you consider how much liquidity has poured into equities. Makes less sense when you consider how little of that money has made it into M1, and the weak velocity.

That's what makes a market.

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When you compare the value of gold against other investments, it's a pretty stodgy investment.
If you bought a 1957 Chevy 283 4 speed for $2511.00 in 1957, that car would now be worth over $110,000.00.
If you bought $2511.00 worth of gold in 1957 it would be worth $12,188.00 now.
If you bought a P-38L for $5,000.00 in 1946 it would now be worth a minimum of $6,500,000,00.
Just a off the top comparison.
 
Shepherd said:
When you compare the value of gold against other investments, it's a pretty stodgy investment.
If you bought a 1957 Chevy 283 4 speed for $2511.00 in 1957, that car would now be worth over $110,000.00.
If you bought $2511.00 worth of gold in 1957 it would be worth $12,188.00 now.
If you bought a P-38L for $5,000.00 in 1946 it would now be worth a minimum of $6,500,000,00.
Just a off the top comparison.
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Not sure about your numbers. I come up with $140,000 for $2,511 of gold bought in 1957
 
Shepherd said:
When you compare the value of gold against other investments, it's a pretty stodgy investment...
If you bought a P-38L for $5,000.00 in 1946 it would now be worth a minimum of $6,500,000,00.
Just a off the top comparison.
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To be fair, I think you’d have to factor in what it would have cost to store that P-38L for 60+ years and maintaining it, even if not flying.

Gold is relatively easy to store. One of its benefits as a store of value.
 
FastEddieB said:
To be fair, I think you’d have to factor in what it would have cost to store that P-38L for 60+ years and maintaining it, even if not flying.

Gold is relatively easy to store. One of its benefits as a store of value.
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And if you had the choice, which would you rather own? :D
 
Shepherd said:
If you bought a 1957 Chevy 283 4 speed for $2511.00 in 1957, that car would now be worth over $110,000.00.
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I had a customer that always said, '' It is more fun to look at my [collection of classic] cars than it was to look at my gold.''

Fortunately when he passed away his beneficiary sold the cars to folks that appreciated and understood his collection.
 
I wouldn't take my plane buying advice from a bunch investors..... Or visa Versa...

Gold != Investment...
 
I think overall, Gold keeps up with the market, or better?

remember I still have some that was bought pre 1971. but we have rode the market since then. when we can, we still buy.
 
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Tom-D said:
I think overall, Gold keeps up with the market, or better?

remember I still have some that was bought pre 1971. but we have rode the market since then. when we can, we still buy.
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See posts 37, 28, 15. No, gold doesn't keep up with the market.
Tom-D said:
long term yes.
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It's an underperforming investment.
 
All that said, if you like gold jewelry have at it. It will likely at least hold its value over time, and you'll have a nice adornment. I've no plans whatsoever to see my gold watches, I like them and I'm going to keep them.
 
Cap'n Jack said:
It's an underperforming investment.
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In normal times, sure. But I think that's like saying "investing" in a life insurance policy is investing in an underperforming asset. Which it is, until you die!

Best to think of precious metals as a hedge against hyperinflation. If and when things do go to crap, gold may in fact turn out to be an "overperforming" asset.
 
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