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Investing in Gold?

djs13

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Does anyone on the board invest in gold? In past years it hasn't been very fastlane, but from what I've heard and read recently, gold and even silver are safe investments that offer good returns. This is mostly due to our falling dollar. Does anyone recommend any books on this subject? Did anyone have success with gold?

Thanks.
 

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Runum

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Not trying to be ugly here, wouldn't that be like chasing the train now? It's already run up. Do you expect it to go up in value or down and why?
 

EasyMoney_in_NC

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I've been buying silver. Just piddling right now. Been buying the last 2 months and its gone up $5 an ounce in that time. Stayed pretty stagnant for years and now is on a run. Considering the gold/silver ratio is around 50 and has historically been 15-16 range, I'm hoping there will be A LOT of upside in the future. Silver is sort of flying under the radar. Wheat and gold are the hot topics right now because they are at historic levels (wheat, corn etc anyway. gold still needs to get to 2300 an ounce before its hit a historic high). I don't have the stomach for $1000 an ounce anything, so Silver is easy and affordable :)

There's a million ways to own it, but I like the physical product myself. Not fastlane money every day making kind of investing, but a great bet against the dollar being worth nothing (someday, and silver is spendable as currency). And I can control it, as apposed to ETF's, funds etc...
 

kidgas

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I have a few ounces of gold purchased between $400-500, and some silver between $7-9. I have not purchased physical in awhile now, but do own GG. At various times, I have owned ABX, KGC, PAAS as well. You can see what I doing with GG in the collar thread. Bottom line is that I have about 28% of my retirement portfolio in GG currently.

I believe in the long K-wave (Kondratieff cycles) since it make sense that, as human beings, we would tend to not invest in mining infrastructure when the stock market is hot. Eventually, over allocation of resources brings in new supply and new investors while other asset classes are being shunned. The cycle repeats itself. I feel that we have a few more years on the commodity bull (3-10 years) but I couldn't possibly call a top. I also feel there is some merit to the Dow:Gold ratio. I feel that it will bottom somewhere in the neighborhood of 7 but of course that is just my speculation. Anything in the single digits and I will start looking to get into Kondratieff spring investments.

Any other thoughts on Dow:Gold ratio on the board?
 

andviv

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I have a few ounces of gold purchased between $400-500
Isn't it time for you to sell half so you get your money out and enjoy the ride without risk?
Although I see you consider there are 3 more years of prices going up and you may think it is too early, I just wanted to float that idea out here.
 

hakrjak

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In the words of Warren Buffet, "Be greedy when others are scared, and be scared when others are greedy"

Based on this philosophy, I'd be bailing on metals now and being greedy somewhere else where people are scared, like Real Estate :)

- Hakrjak
 

kidgas

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andviv,
That is certainly a consideration, but is not the reason I invested in gold in the first place. As mentioned, I have a few ounces of gold and several of silver. The main reason for holding these is in the event of a complete collapse of the financial system. It is part of my "escape to Canada" fund. It is to be used to barter for food and shelter should it be necessary. Or to trade for new money if everything else becomes worthless. One just has to look at the history of paper money to realize it is inevitable. I hope not in my lifetime and can pass along to my kids. But, I want to be prepared.
 

EasyMoney_in_NC

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andviv, The main reason for holding these is in the event of a complete collapse of the financial system. It is to be used to barter for food and shelter should it be necessary. Or to trade for new money if everything else becomes worthless. One just has to look at the history of paper money to realize it is inevitable.
Right there with you! I'm not so sure in this and age that the powers that be would completely destroy the monetary system or allow it to become completely worthless, but its a nice hedge and a good back up.
 

PEERless

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..."Be greedy when others are scared, and be scared when others are greedy." Based on this philosophy, I'd be bailing on metals now and being greedy somewhere else where people are scared, like Real Estate
I LOVE this point!

One just has to look at the history of paper money to realize it is inevitable.
Inevitable? Or just probable?

an AK-47 would be a better investment.
As I said here, you might want a bomb shelter and a 50-cal.
 

EasyMoney_in_NC

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As I've been preaching all along, in a meltdown, an AK-47 would be a better investment.
I think you're talking about a complete nuclear anarchy kind of melt down :) no?
I would agree, but I'm not a gun man......not to say I could be easily swayed :D I hope we never see a MadMax time when we need stocks of weaponry and barricaded homes etc....
 

PEERless

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It's happened to some of the greatest civilizations. Something to think about.
 

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PEERless

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ANYway... Is anyone investing in gold? MSNBC ran a segment on Gold Buying Parties (think Tupperware parties). This smacks of the second half of Buffett's quote:
"Be greedy when others are scared, and be scared when others are greedy"
 
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andviv

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And this is how the Fastlane forum became as useless and politics/bs driven as the RD forum.
 

EasyMoney_in_NC

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And why is that? What did I miss?

There may be some lighthearted comments here about the future, but there is plenty of validity in the possible outcomes for the US given the history of other great nations and people throughout time, and given the current political position this country is in now. And this is why gold and silver should be bought.......and maybe an A-K if you really feel paranoid about the future.
 
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andviv

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Thread title: Investing in Gold?

Def of Investing: To commit (money or capital) in order to gain a financial return

The original post was very well intended. Comments about AK-47's and how the world as we know it is ending are very well received at http://www.richdad.com/Forum/forum.aspx?g=forum&c=2
Also comments about the current politics, the next MLM, and the wonderful campaign of this or that candidate. If I am not mistaken, that is not why we are in THIS forum. There are plenty of other spaces for that.
And that is my personal opinion, I am NOT speaking as a representative of the Fastlane forum. If I had it my way I'd lock this thread as there is nothing good coming from it anymore.
 

EasyMoney_in_NC

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Come on please........loosen up a bit, its Easter. The thread was going nowhere and a little light hearted discussion is going on. Considering the original poster is nowhere to be seen, its become a fairly dead topic.

BTW I am firmly aware of what the definition of investing is. See that car in the avatar and where it is? That's what knowing how to invest affords one time to be able to do, while still getting paid.
We are supposed to be here (I thought) to learn from people that were well versed in their respective fastlane fields. Now I'm reading about investments bought with no due diligence and no reserve money, and no prospects for getting out of the situation........and people pacifying to try and find a solution............I have one! but I digress.

I tried interjecting a true discussion about ratios of the different commodities to one another etc, to no avail. So apparently investing for dummies is more topically correct than a bit of reality humor.

Ok I get it, I understand, thanks :thumbsup:
 

PEERless

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As a mod., you do speak for FastLane, so we're feeling a little chastised.

Metals are considered a hedge against the collapse of our economic system. Why shouldn't we discuss different ways to invest in preparation for a change in the economy?

Hardly political, this issue is economic and worth discussing. So...

A friend of mine owns a few hundred grand in gold coins. He enjoys them for their historical context as well as their value. I made an off-handed comment about how he should sell them now that gold is at $1000. He scoffed, saying "gold is really worth $1600." What do you make of that?
 

hakrjak

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As I've been preaching all along, in a meltdown, an AK-47 would be a better investment.
You know, joking asside -- I have noticed that the value of a lot of my guns have gone up each year since I've purchased them. Depending on who gets into the whitehouse, and what gun bans are put in place and what is "grandfathered in" (i.e. you can keep what you have, but they won't allow any more to be made or imported) -- Some guns might turn out to be a great cash investment.

- Hakrjak
 

lightning

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GG (Goldcorp) has been very kind to me in the past couple of months. :) (purchased it on a low at $31).

By the way Hakrjak, I have a friend that shares a very similar viewpoint to yours regarding guns and thier "long-term" value while being a hobby as well. :) You could definitely be on to something.
 

PEERless

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I did a thesis on the correlation between the local price of an AK47 as an indicator or a region's overall safety. It seems direct.

What correlates with gold prices in the same way? Fear on Wall St.?
 

nipsid

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If your planning to invest in gold you might want to consider that up until recently South Africa has been the world's largest gold producer. Now every other day in South Africa the electricity is cut off for 3 hours, which means they have to stop mining, this has caused a 30% decrease in the past 2 months. From what ive read one-quarter to one-third of the world's annual gold production is from South Africa.
 

andviv

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SO they can't keep the mining going by using generators?
wow
that is a shocker (and yes, I'm totally ignorant about mining) as I'd assume these companies would invest heavily in the infrastructure that allows them to keep producing.
 

kidgas

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I read an article about another consideration: There is a shortage of the big (12 ft tall) tires on mining equipment that carry ore such that companies are digging up the ones that they buried to have them retreaded.

Also, consider that as the price goes up, the actual supply goes down. That is because lower quality ore becomes profitable and so miners go after this while saving the higher quality ore for the lower price cycles. There is only so much refining capacity, so for the same amount of throughput, the gold yield is lower.
 

randallg99

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SO they can't keep the mining going by using generators?
wow
that is a shocker (and yes, I'm totally ignorant about mining) as I'd assume these companies would invest heavily in the infrastructure that allows them to keep producing.

andviv - don't forget that commodities were in a dry spell for about 20 years and profitiability was hard to find especially at the price levels they maintained. to sustain positive earnings, miners resorted to low costs thus low mining outputs. miners investing in infrastructure while gold was at $325 is like opening snow plow company in Florida....

the commodity boom has everyone with any remote chance of striking gold underground scrambling for exploration resources now that the return on investments are worthwhile again.

the same analogy also applies to the oil industry who couldn't rub two nickels together just a few years back are all now scrambling (and paying top dollar) for exploration teams, equipment and development just to find new supply now that the prices justify the expenses.




kidgas- I agree 110%.... none of the macrodynamic shifts in the economy have changed. not one iota. nice opportunity coming up to pick up some gold on a dip.
 

andviv

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randallg99, thanks for the explanation. Yes, that does make sense. Still, if I were the manager for one of these places I'd probably buying generators left and right.
 

andviv

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I couldn't read it, it is kind of blurry...
 

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