I pretty much agree with everything here. The bottom line is commodities (yes gold is still a commodity) are very volatile. Gold really hasn't had a solid consolidation since the $1000 breakout. When it consolidated below $1000 it was there for like 18 months and it had a huge range between $700 to $1000. Slap a simple 30% discount from the recent highs and you've got gold at $1300 potentially. $1300 also kind of looks about right for gold to potentially bottom at if you look at the chart. I know I'd be a big buyer down in that range if it gets there. I would say that if you aren't comfortable with your investment then get out. I don't see gold being able to breakout to a new high in the next 6 months and it might be best to reevaluate a gold trade after it has had some time to consolidate.
I agree with the blue chip dividend stocks too. I think it's a very good time to look to buy them and it's pretty easy to build a diversified basket that yields over 5%. I try to tell people this who ask me stock advice, but no one really wants to hear dividend stocks when they ask for stock advice.
Yeah I guess it depends what you are looking at. While there may always be more perfect entries I feel like this is good enough...but that's just my opinion. Plus the stocks I am looking at are pretty stable in terms of price action. Also, there is a pretty nice little blog/site I came across the other day http://dividendmonk.com/ where the guy has nice write ups on various dividend paying stocks. Also, he actually provides price levels where they look decent to buy and prices where he feels they are too risky to buy. People looking to build a basket of income stocks should check it out.
<iframe width="420" height="315" src="http://www.youtube.com/embed/OJvprC3eX44" frameborder="0" allowfullscreen></iframe> Gold does have a high value and it has been used as a medium of exchange for a long time, but in the end land is where power and wealth end up coming from. I think Buffett sums up real wealth pretty accurately. I know fiat currencies have many problems, but I can't see how you have an extremely liquid global financial system if you are basing it off the value of gold.
farm land is great so long as there is a govt there to help you keep it in your possession, but otherwise generally speaking, farm land is not movable or liquid and typically carries with it many side risks (ie destruction of soil, natural disaster, etc)
Of course money will not produce more money. This isn't the federal reserve we are talking about. Companies and lands do not equal money, however they are worth money and can produce wealth. Geewiz. Really not sure why Buffet was comparing apples and oranges there. Fiat currencies really only have one problem, they never last.
I see, so Buffet is arguing you should put your money in land/businesses, as opposed to Gold(money). In that sense, fine. All money can do is retain value. Lands/businesses can produce wealth, if you can overcome the risks of course. So this is really arguing investing vs. saving, which again is fine. However, that really doesn't take anything away from, and really has nothing to do with gold. And even for the investing vs. saving argument, there are times in macro economic cycles where saving(in real money) is > investing. Such as times when businesses are contracting and investing will only cost you money. And it just so happens that now is one of those times. Would I rather own XOM for the next 20 years compared to gold? Sure, why not. But the next 5? Nah. The better question is would you want to own real Money or some paper IOU*? Warren? *that pays no interest, and has gone down in value since the day it was created, and every other IOU of its kind in history has eventually become worth less than the paper it was printed on
i wanted to just post a chart of BRKA as tribute to old warren, who as of late has become quite the runnerboy-waterboy-caddy for david rockefeller, but alas, i am computer illiterate and still haven't figured out how to post images :grin:
True and gold carries risks as well. It is historically near the upper end of valuations if you just look at inflation adjusted price. I wish i I could find a chart that goes up to 2011, but I can't seem to get one... And I'm not arguing to jump face first into 100 acres and a herd of cows lol, but I guess my point is you can produce income from land and live on it. Gold is just a long term trade. It's hard to actually call it an investment since it doesn't produce income. I'll continue to trade the hell out of these precious metals, but I just never really understood the hype at these price levels. I mean even when gold back our currency it wasn't this high in inflation adjusted dollars. I dunno....I'll keep buying and starting UPS Stores and you guys can buy gold.
He is just pointing out how all this money is being put into an "investment" that produces nothing. If the money was actually being put to work into things that can produce income and create jobs rather than just sit in a vault then it might be more productive. I agree about the fiat currencies, but I can't see the house of cards crumbling anytime in the next couple decades.
Gold is neither an investment or a trade. It is Money. Comparing those is pointless. Put it this way, I save and preserve wealth through gold. If I want to produce wealth, then I either work, or take on the risks of an investment. The thing is, putting your money to work to produce income and create jobs is not the most optimum thing to do at every part of the macro cycle. In fact, many of the issues the world is having now is due to the natural cycle of over extension and over expansion. It is time to save, not spend or invest even more.
I mean that's fine if you want to call it money, but I guess I don't get the preservation of wealth argument. Like you could apply that same phase to anything you feel is undervalued. Also, the past 500 years of gold prices tend to show that it should not be viewed as a long term way to maintain wealth at these price levels. Something that preserves wealth will first preserve principal. That has not been this history of gold at this price level over the past half a millennium. IMO gold will likely be significantly lower 10 years from now and for me it's hard to call that a vehicle that preserves wealth. For me, I feel it's better to look to preserve wealth by buying small businesses since it produces income. I'm lucky I have a smart, hard working friend and 50/50 partner who knows UPS Stores and shipping pretty in depth, so that allows me to be in this business. Yes, it's not as easy as buying gold since my market is limited to UPS Stores, but when the opportunity presents itself then it is a much better way to preserve wealth. Most small business transactions are gonna happen at 3 or less years worth of earnings and you are able to depreciate your purchase price (assets and goodwill). Further, they should also protect against inflation. Just my opinion and so far things are looking very good since I have cash to take advantage of opportunities others can't since banks simply aren't loaning money.
you keep spamming every gold discussion here w/ this same exact stupid chart whose data points we have no way of determining to be accurate, whose source you have yet to divulge, and which conveniently ends right before gold's bulls run and the worst thing is that even after all our discussions you still refer to gold as a commodity/investment. let me ask you, why do all the central banks of the world + IMF hold thousands of tons of gold? why not just a confiscate/acquire farmland from warren or UPS stores from you instead? i mean afterall, that's where the true power & wealth lie :grin:
in terms of the price it's at now. and lol at gold being up $80 pre-market. good thing i got long calls and short puts yesterday. i love weekly expiration options.
