GoldWeTrust.com
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Stocks vs. Precious Metals vs. Bonds vs. Real Estate

Page 1 of 2 1, 2  Next

Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Buffet does not matter to you

Post  Shelby on Sun Apr 19, 2009 5:51 am

http://financialsense.com/fsu/editorials/stathis/2009/0416.html

...One way to see through the smoke is to realize that what Buffett buys has no bearing on you. Certainly, Buffett is great value investor. But once you understand a few things, you might not be that impressed by him. You see, Buffett invests in businesses that generate large cash flows. This provides Berkshire Hathaway with cash on-hand to take advantage of buying opportunities. Every time his favorite stocks go down he buys more, lowering the cost basis. But he doesn’t buy risky stocks. He doesn’t need to. He buys well-known, conservative blue chips. He doesn’t know how to use market timing strategies. He doesn’t need to (although he would be a much better investor). He just buys more of his favorite gems when they decline in price.

Buffett might buy Johnson & Johnson at $70. You might follow his lead and buy some for yourself. But what happens when the stock falls to $35? Buffett will be able to buy enough to lower his cost basis to $36 if he wants. You can’t do that. Even if you had enough cash to do it, it’s unlikely you would because you hadn’t prepared for that possibility in advance.

The insurance industry is one of the best cash flow machines in the world. Now you know why Berkshire owns Geico. This cost-basis lowering approach is similar to that used by large mutual funds and pensions. Similar to Buffett, they also focus on buying large, conservative companies. Mutual fund managers aren’t able to get out of the market during sell-offs. In other words, they really don’t have any ways to reduce market risk. Instead, they use their continuous supply of cash to lower the cost basis of their holdings. During a bull market anyone can do well using that strategy. All it takes is a large pool of cash, some common sense and a conservative approach. The only problem is this strategy can be disastrous during bear markets because their supply of cash declines because investors tend sell.

Buffett also gets exclusive investment deals. Instead of buying a stock, he might purchase the convertible bonds with warrants. This is usually a much better deal than a direct purchase of the common stock. It certainly has less risk. Or he might pay below-market rates for securities. These transactions are done privately or out of the market, shielding these opportunities from individual investors.

Buffett also buys entire companies or takes controlling interests so he can influence managerial decisions. That makes Buffett an active investor because he has direct control over the companies he invests in. We can’t do that. We are passive investors. Therefore, it’s critical for us to actively manage our securities positions. One of the best ways to do that is to reduce market risk by selling in the early stages of a bear market.

Finally, what Buffett invests in might not be suitable for you or me because our investment objectives, horizons and financial resources are different. If you had an infinite investment horizon and hundreds of businesses that generated huge cash flows, you’d probably deliver nice returns if you were offered exclusive deals and used dollar-cost averaging for a portfolio of safe stocks like Coca-Cola, Procter & Gamble and Johnson & Johnson.

All of these considerations aside, let’s concede that Buffett is a great value investor. But he’s not so good at tech investing, derivatives, foreign currencies, emerging markets. And his investment management skills are limited to diversification and lowering the cost basis of his positions. He certainly doesn’t have expertise in shorting or market timing techniques. But remember, he doesn’t have to.

In all fairness, Buffett is very good at distressed securities analysis. Most important, he knows what he does not know and (usually) stays away from uncertainty. But even Buffett has made some big investment mistakes, as history shows. He’s only human after all. But there is one very valuable thing to learn from Buffett. Stick with what you’re good at and don’t wander into territories you’re less knowledgeable in. If you’re able to do that, you’ll have many more winners than losers over time. This approach will help you develop consistency – one of the keys to investment success.

If you have confidence in Buffett, just buy Berkshire Hathaway, plain and simple. I have no interest in Berkshire for a very good reason. It’s a value fund but it doesn’t distribute cash dividends. This violates one of the basic tenants of investing...

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Time to buy precious metal stocks?

Post  Shelby on Mon Jun 01, 2009 11:50 am

> What is your opinion on investing in gold & silver stocks at this point?
>
...
>
> Will shares of metal stocks hold up during the coming mayhem?
>
> Just trying to figure out what to do besides buying physical.

I see that precious metals stocks have being moving up lately (I was finally able to cash out of TK.V and NW.V), which is getting people to think that precious metal stocks may jump back to their pre-2007 levels, for some potentially spectacular gains.

I can not possibly give a completely thorough and balanced response to this, due to limitations of the time and to minimize verbosity. So I will just give my summary opinions, and fail to mention some counter-logic.

First, please re-read this entire thread, and also these specific posts from 2 threads:

https://goldwetrust.forumotion.com/stocks-f2/junior-mining-companies-t15.htm#544 (mining stocks performed horrible in Great Depression)
https://goldwetrust.forumotion.com/stocks-f2/junior-mining-companies-t15.htm#392 (come back to stocks when dollar is toasted globally)
https://goldwetrust.forumotion.com/economics-f4/stocks-vs-precious-metals-vs-bonds-vs-real-estate-t11.htm#17 (read entire thread, stocks are mathematical theft mechanism)
https://goldwetrust.forumotion.com/economics-f4/stocks-vs-precious-metals-vs-bonds-vs-real-estate-t11.htm#30 (Gambler's fallacy is that there will always be examples to make one jealous, but statistically these successes are not what happened to most people who tried)

If you simply want more leverage to the metal prices (risk cuts both ways, as mining leverage can also!), then you buy the AGQ, then you avoid all the numerous additional risks of failure/theft of the mining concern (mine the shareholders). If you think the Comex will bust, thus afraid to hold AGQ, then I think you should be just as afraid of entire brokerage failure and/or tax changes/theft. The concept of buy and hold long-term of stocks is nonsense. All investments (even bullion) are a wasting asset, where you must extract return and move on with timing.

So the short answer is that nothing is free. If you want to gain leverage, you need to have additional insight/work/effort. And it is hard to find good risk vs. reward advantanges. There is no free lunch.

I am dabbling in a bit of speculation with the AGQ, but I know if I play with fire too long, I will get burned. So I will only make a near sure bet once and a while, and I won't gain that much overall.

This is why Wallstreet steals. The only way to get more wealthy is by effort (intelligience) or theft. WHen one invests in real businesses, it takes effort (intelligience). This is why Buffet has become corrupted as his capital has grown too large. He has no choice but to buy into anti-Biblical, theft (socialism decay) businesses (e.g. insurance business, which requires licenses from TPTB).

A true diversification (hedge) away from bullion, would be a business you invest in personally and have personal effort/intelligience in. Mining stocks compound the risk of bullion.

As for timing, I think later this year comes another downleg in the stock market, and I think the mining shares will not be entirely immune, especially to the degree they have been run up exponentially before them. The time to buy mining stocks was the same time to buy silver, late last year at $9. If you bought the AGQ then, you would be up 155% (2.5x value).

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty re: Time to buy precious metal stocks?

Post  Shelby on Mon Jun 01, 2009 4:52 pm

Shelby wrote:...As for timing, I think later this year comes another downleg in the stock market, and I think the mining shares will not be entirely immune, especially to the degree they have been run up exponentially before them. The time to buy mining stocks was the same time to buy silver, late last year at $9. If you bought the AGQ then, you would be up 155% (2.5x value).

http://www.gold-eagle.com/editorials_08/brochert053109.html

...buy and hold a basket of Gold mining stocks or buy a Gold stock mutual fund or ETF (like GDX). There's only one catch, and it's a minor one: you should wait until the price comes down from current lofty levels...

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Valuations (P/E ratios) are not a valid short-term trading timing indicator

Post  Shelby on Sun Jun 14, 2009 4:18 am

http://www.gold-eagle.com/gold_digest_08/hamilton061209.html

...this chart, it utterly shatters the popular notion among traders today that a stock bear can't end until we see 7x earnings. While a secular bear won't end until such low valuations are seen, cyclical bears can end regardless of where valuations happen to be because valuations are not what drive these cyclical moves within secular trends...

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Zeal0610
Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Zeal061209B

Especially when we have already hyperinflation:

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-165.htm#1494

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Investments decline faster due to fear being stronger emotion than greed

Post  Shelby on Mon Feb 15, 2010 6:00 am


Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Buffet bets that S&P index will outperform stock picking over the long-term

Post  Shelby on Tue Apr 27, 2010 10:20 am

Buffet agrees with the theories I made at the start of this thread back in 2008 and where I explained Gambler's Fallacy:

http://money.cnn.com/2010/04/27/news/companies/buffett_protege.fortune/index.htm

Buffet invests for income and compounding, not for the gain in share price:

https://goldwetrust.forumotion.com/economics-f4/stocks-vs-precious-metals-vs-bonds-vs-real-estate-t11-15.htm#1323

In short, Buffet bets that only income and compounding win in long-term (not timing asset selection or equity value rise and fall), and that is why he says his favorite holding time is "forever". This is why he does not favor holding gold as major investment.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Gambling vs. Speculation (no difference)

Post  Shelby on Sun May 02, 2010 4:29 pm

http://investophoria.blogspot.com/2010/04/opportunity-in-making.html?showComment=1272817659642#c8685869492571308973

Shelby wrote:About gambling vs speculation, there is no mathematical distinction in these paper markets. And the inability to know this, is what suckers in many sheep for the slaughter by Wall street.

I will attempt to explain to you mathematically why any one who bets on Wall Street, is a loser in the long-run to the casino house.

In Las Vegas, the variables of a card game are deterministic (they were before they moved to multiple decks, shuffling the cards before each hand, etc), and if you were smart enough to count all the cards, then you were banned from the casino. Ditto on Wall street, if you are somehow able to count the probabilities (Martin Armstrong?), then you will be defeated in some other way (e.g. a planned take down at some point). But more salient, it is nearly impossible for you to count the probabilities in these markets, because the world is a very complex and random house.

There are those who think they have a formula, and they consistently are making say 20 - 40% per annum gains at this time. The problem with that is that the fiat is being debased at about the same rate, so they are not getting ahead. And worse, when the moment of truth comes, they won't be holding physical gold, and they will lose everything by decree, as will everyone else invested in the paper casino.

No I am sorry, nature will not reward you for the production of speculating on paper. And if we had time to do a thorough research paper on this, I could prove this to you mathematically.

You are chasing folklore, just as the banksters want you to do. You do not understand what Buffet knows, which is only income from production and compounding, will truely amass wealth. He started as a newspaper boy and he does not invest in speculations. Unfortunately most are not smart enough to understand this.

http://investophoria.blogspot.com/2010/04/opportunity-in-making.html?showComment=1272818293287#c2268155056676879328

Shelby wrote:Sorry for triple post, I do care about the gold bugs, and I urge them to study and think about the Gambler's Fallacy:

https://goldwetrust.forumotion.com/economics-f4/stocks-vs-precious-metals-vs-bonds-vs-real-estate-t11-15.htm#2967

And to consider what I wrote above. All the traders are capturing mathematically over the long-run is the debasement of the fiat. You do not earn real money (gold), by speculating in the paper casino (over the long-run, you might have a good year, then a bad year). If you can find one speculator with a consistent return above the true monetary inflation over many decades, then I will eat my words. I am not referring to speculations on real estate and hard assets (e.g. Doug Casey), those are investments. For example, if I can buy prime land near a city of 2 million people in Asia for $500 per acre, then that is not gambling. It is a fact of nature, that the land values much go up here.

http://investophoria.blogspot.com/2010/04/opportunity-in-making.html?showComment=1272818674383#c5201758785616856948

Shelby wrote:However if someone was buying copper right now, I would call that gambling, because it is dependent on China's bubble continuing. What I meant to write, is that buying highly undervalued tangible assets for the long-term holding, is not a speculation. Silver would be a prime example. But you must have a long-term view. Ditto gold. Ditto land in an overpopulated asian country that does not yet allow foreigners to buy land (if you are wise enough as to how to lock up this land).

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Silver chart

Post  Jim on Wed Aug 25, 2010 6:16 am

Looks to me like it's getting ready to rumble. Point and figure bullish price objective is $29.

http://stockcharts.com/charts/gallery.html?$SILVER

Jim

Posts : 963
Join date : 2008-10-23
Location : California

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Bond funds have outperformed gold!

Post  Shelby on Wed Aug 25, 2010 5:19 pm

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 BondBoom1

But that is expected by Exter's Inverted Pyramid:

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Exter_inverted_pyramid

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Gold bubble nonsense

Post  Shelby on Sat Aug 28, 2010 8:17 pm

http://www.marketoracle.co.uk/Article22252.html#comment94196

Shelby wrote:Herb, the price of precious metals may dip (even severely), but the top of this secular bull market in PMs will not occur until the REAL interest rates are positive, which won't be until after the western economies implode:

http://www.marketoracle.co.uk/Article20327.html#comment94202

Go out into the street and do a survey of how many people own PHYSICAL gold and for that matter SILVER, and you find that less than 1 in 1000 own physical gold bullion and less than 1 in 10,000 own physical silver bullion. People own jewelry but in insignificant quantities relative to their networth.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Re: Stocks vs. Precious Metals vs. Bonds vs. Real Estate

Post  Shelby on Fri Sep 24, 2010 3:29 am

http://esr.ibiblio.org/?p=2556&cpage=8#comment-279815

Shelby aka Jocelyn wrote:> recruit the work force of countries with a “surplus” of workers.
> How to get the people who work for us in 30 years to accept our currency?

Buy gold, effectively leveraging global labor. Gold has the highest stocks-to-flows ratio, thus has highest marginal utility of any commodity on earth. Next is silver. Platinum, Pd, Cu, etc have very low stocks-to-flows ratio and are not suitable for store-of-value function.

Problem is the nation-state doesn't like capital flight, and is "cooperating" with G20 to shut out tax havens. In USA at least, gold is taxed on capital gains, yet gold's function is only the remain level with the per-capita production, i.e. purchasing power. Thus gold can lose purchasing power parity value after taxes.

> That means that the retirement money must be invested in production capacity

The best strategy is to invest in productive assets that have pricing power in inflation and deflation. Buffett wrote about this criteria.

The best investment is in knowledge. It is portable, doesn't suffer from inflation, and can not be taxed.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Boomers are liquidating stocks, becoming more conservative as they close in on retirement

Post  Shelby on Fri Oct 01, 2010 9:17 am

After 2008 everything changed forever. Boomers are pulling money out of stocks:

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Gallup10 <--- click for article

It will only get more and more difficult to make money in stocks.

The real estate line is very interesting. The 2007/8 crisis didn't affect it all. The trend since 2003 is linear, and basically shows that about 5% of the population (2.5% of real estate investors) wise up per year, to the reality that real estate investment is hopeless.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty tax reaper cometh

Post  Shelby on Fri Oct 15, 2010 8:56 am

http://www.marketoracle.co.uk/Article23494.html#comment95492

Shelby wrote:Rick, I agree with you on tax risk, and of course the retirement accounts will be raided by the bankrupt governments eventually. Remember I wrote an article about that, "End Game: Gold Investors Destroyed":

http://www.marketoracle.co.uk/Article20327.html

However, TIPS will not help you in the end game, for two reasons at least:

1. They underperform the actual price inflation, because CPI is underreported: http://ShadowStats.com

2. At the end game, all bonds will be rendered effectively worthless, as will all fiat.

There is going to be a period of chaos between when the new world order gold-backed currency is established, and during that time, it is likely that gold will be expendable in black markets wherein people might choose to not report sales to tax authorities. I am not advising people to do that, it is an individual decision.

Of course, eventually the tax man will come looking at your assets (houses, etc) and try to determine if you avoided reporting taxes. There is even talk in UK now of accessing people taxes at what ever level the UK tax agency deems to be the "fair share" of that individual, regardless what the tax law actually says is due.

The bottom line is we are sliding into socialism with some fascism and theft and fraud is on the rise. This is the environment where individuals have to fight to survive and retain their net worth. Gold is the only way to do that, not even silver can be compactly hidden and transported.

We are all going to be illegal in the eyes of socialist and fascist slide into failure by the masses:

http://www.marketoracle.co.uk/Article23427.html#comment95419

This is a slide into war and chaos. This is the time you must own gold and pray.

The other suggestion I have is to leverage up on communications technology and try to have a cash income business on the internet which is based around some aspect of the social and fascism trend.

Mankind is going to have to fight his way through this period. TIPS are just paper from the socialist and fascist government. Don't expect your country to love you Rick. Your country is going to eat you up and spit you out. It is not personal, it is just that the citizens are bankrupt and will demand the government steal in order to maintain their retirement. I also suggest you read Gary North's latest article, he got most of it correct:

http://www.marketoracle.co.uk/Article23493.html

What he may not grasp is the level of chaos, teeth gnashing, fighting, stealing, etc, that he is writing about, that will occur before we come out the other side into renewed prosperity. That renewed world order is going to be from a much lower level, as the global economy will reset with a implosion of China due to their Yuan peg mis-allocation of capital, etc.. North is correct, we have about 1 to 2 decades of chaos ahead to correct the imbalances in the global economy and the youth to push the boomers over the cliff. I expect universal health care will turn into a form of universal euthanasia, which is basically what happened in Nazi Germany:

http://thegoldspeculator.blogspot.com/2009/09/case-for-killing-granny.html
http://www.shtfplan.com/howard-katz/socialized-medicine_03292010

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Diamonds were made "rare" to give bankers a competitor to gold

Post  Shelby on Thu Oct 21, 2010 12:06 am

http://www.theundergroundinvestor.com/2010/10/inside-the-illusory-empire-of-the-banking-commodity-con-game/

[URL="http://www.theatlantic.com/magazine/archive/1982/02/have-you-ever-tried-to-sell-a-diamond/4575/"]Though the well-documented 1870 discovery of thousands of pounds of diamonds at the Orange River[/URL] in South Africa stripped the diamond of its status as a precious stone, millions of people worldwide today still willingly pay a price for diamonds that reflect their erroneous belief that it is a precious stone. Just as the diamond cartel sets false artificial prices for diamonds in the world market, bankers set false prices for many of the world’s most actively traded commodities.

Bankers can generate an endless supply of diamonds. This pulled westerns away from owning gold as jewelry and siphoned off a big portion of their wearable personal portable wealth.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty re: gold vs. fiat (How the NWO will come about)

Post  Shelby on Sat Oct 30, 2010 7:30 pm

http://www.marketoracle.co.uk/Article23862.html#comment95948

Shelby wrote:Michael B. that is an excellent question. Nadeem may have a different opinion than me.

The backward-looking metric is when the interest rate paid on fiat sovereign bonds (an entity backstopped by the central bank printing press that can not default), is greater than the appreciation in the fiat price of gold.

So roughly 20%, although that has been 40% during past 2 years. This is why I wrote that at the "End Game, the Gold Investors Destroyed", the level of interest rates required to arrest the gold bull would be catastrophic to society and the compounded relative losses for gold investor who do not pay the taxes so they can't re-enter sovereign bonds at that time, would be extreme. And my thesis is that the level of taxes at this end game, will probably result in a loss of purchasing power greater than the appreciation of purchasing power during the bull run of gold:

http://www.marketoracle.co.uk/Article20327.html

However, that backward-looking relative metric (interest rates vs. appreciation of gold fiat price) may not help tell you when to sell gold, because by the time the metric gives a sell signal, any parabolic increase in the gold price may have reversed into a crash in the gold price.

Normally I would say we will be near the top when I will hear common people talking about buying investment gold at places where they are now oblivious (e.g. at the mall). However, in order to raise interest rates (whether it be via domestic currencies or a new international one, e.g. SDRs), it will be necessary for the global economy to implode (all the misallocation of capital will be erased).

Thus what I see likely is that SDRs will be (at least partially) backed with gold (recent BIS gold swap may be for this purpose), and that the domestic currencies will become like banana republics. The way the NWO currency will start is as an alternative to the broken (perpetual QE and halving of the interest rates) domestic currencies. Thus I can see interest rates rising for SDRs, while interest rates continue to fall for domestic currencies. In order to invest in SDR bonds (or national bonds indexed to SDRs), you will have to pay your taxes (prove where your cash came from). Initially SDRs will not be available to the average person.

Over time as more capital moves into SDRs, and as national govts are forced to borrow in SDRs (i.e. inflation or maybe even hyper-inflation relative to SDRs and gold), the SDRs will gradually become the world's reserve currency. At that point the world's central bank will have complete control over the world, as every person will be preferring to buy and sell using SDRs instead of the nearly worthless local currencies:

https://goldwetrust.forumotion.com/economics-f4/shelby-s-newsletters-t38.htm#3834

Then as the interest rates paid on SDRs come down, and the appreciation of gold relative to SDRs stagnate, it will be time to trade gold for SDRs, but you will still have that huge tax loss problem. The SDRs will also be debased over time, stealing from the world in inflation. This will be the death march for humanity (as predicted in Revelation).

My philosophy on this is different. Gold is money and nothing more. My ideal period of time to hold gold is never. As the Bible says, wealth grows wings and flys away. Never do I want to feel secure in wealth. The point of having wealth is as per the Parable of the Talents, that more wealth is given to those who know how to put it to productive use and enrich the lives of the most people. The Bible is clear about this, don't plant a single fruit tree, it implores us to plant a whole acre and trade.

Thus ideally we want to constantly be recycling our wealth as investments in productive businesses. In that case, you really don't care what is going on with the currencies (especially if you are in software development like I am where the incremental changes in currencies are irrelevant to the bottom line).

For any insurance savings, then I never want to sell it. My holding period for that gold and silver is forever.

So the answer to your question is you should sell gold as soon as you can find a productive use for your wealth. This is why Buffett said he thought digging gold out of the ground to bury it again in a vault, was stupid.

However, I will never again invest my money in interest bearing fiat instruments (and insurance) as Buffett has done, because it is very clear from the math, that such actions by society lead to slavery and socialism:

http://www.marketoracle.co.uk/Article21650.html

The man who becomes so wealthy that he can no longer invest his wealth in productive business, but rather has to rely on the slavery system of usury compounding (insurance and futures contracts are similar), has sold himself and society to slavery.

Rather if I am getting wealthier than my ability to reinvest in productive business (and I am already so), then I will structure my businesses to share more of the profit with my employees and customers. In that way, making the world more prosperous, as they can invest the money more rapidly and wisely than I can. A centralized decision maker is the antithesis of success, prosperity, freedom, and free markets. Are you reading this Warren Buffett?

It is really just the Henry Ford principle:

http://en.wikipedia.org/wiki/Henry_Ford#.245_day

Hope that helps.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Mortgage fraud is worse than I thought

Post  Shelby on Fri Feb 18, 2011 6:45 pm


Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty stock index vs. gold (re: stocks are high risk)

Post  Shelby on Sat Feb 19, 2011 1:47 am

http://www.marketoracle.co.uk/Article26386.html#comment100931

Shelby wrote:
re: stocks are high risk

...and any western stock index plotted again gold since about 2001 or so, show gold outperforming.

Remember in secular cycles of negative REAL interest rates, DJIA/gold ratio returns to 1 (or below). It is now around 9 and has been falling since the secular peak of stocks in 2001.

Diversification into a stock index won't help, just buy gold instead. And if you have a long term frame, silver is even better (silver is not better if you hold short-term, because the volatility can murder you). Traders who think they can trade silver better than a long-term hold of silver, are going to get an education into the value of gambling. One might be able to trade the gold/silver ratio effectively (one trade every year or two), but not the silver fiat price. You can prove this to yourself by comparing the increase of your networth since 2003, as compared to if you had purchased silver and held it with no trades.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty $1 million of food

Post  Shelby on Sun Feb 20, 2011 3:59 pm

http://www.marketoracle.co.uk/Article25914.html#comment101042

Shelby wrote:
Brian,

What would I do with 2 million lbs of beans in times of crisis? If there was really a crisis that caused food production to shut down, then many forms of transportation and distribution would also shutdown. My 2 million lbs of beans (or whatever mix of food stuffs) would be illiquid.

Ditto farm land, illiquid.

Yes enough unperishable food for 6months is not horrible idea. I have 500 lbs of beans stored, etc.. But that hardly helps me with the other $999,500.

Becoming a farmer is extremely inefficient. It is a waste of precious years, when I could instead be developing a new computer language, and potentially raking in another few $million. Look at Google Android sales growing 800% per year compounded since launched in 2009. In 2 years that has been 6400% sales growth to now the #1 market share smartphones in the 100s of millions of unit sales per year.

Besides there isn't going to be any shortage of food. There is going to be plenty of food, but most people won't have any money to buy it, because they didn't buy gold & silver.

All these Mathusians are going to be sitting in their bunker or farm waiting for the attack that never comes, and instead they will be watching gold go to $5000 and silver to $500 by about 2021 or so.

Life does not reward people who waste their talents or waste capital on things that don't help society become more productive. The most efficient thing to do now is to work hard in your area of talent, knowing full well the huge opportunities as 6 billion people are joining to the modern world. And taking your excess profits and buying gold and especially silver, in order to halt Bennie before he burns down all the Jets.

Lets sing a toast to that:

https://www.youtube.com/watch?v=QjUk3Bp16zs

P.S. I agree that money is not the answer to salvation. The globalists have too much of the gold, it won't hurt for us to call it back it in (as they did to us in 1934).

Cheers.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty why the metal is better investment

Post  Shelby on Mon Apr 11, 2011 6:38 am

http://www.kitco.com/ind/Thomson/apr082011.html

Harness the volatility, and you can consistently grow your accounts. Operate in a crisis that will last for decades with only with the gold stocks leverage tool is dangerous and could be financially fatal. The gold stocks leverage tool has failed to work properly because we are in a crisis, not a boom! All crises are about destruction of wealth through destruction of leverage, and that means destruction of “houses on a credit card” leverage, as well as destruction of “gold stocks to bullion” leverage. All leverage is hammered, with no exceptions.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Stock markets are dying, because gold standard is returning

Post  Shelby on Fri Apr 22, 2011 6:11 am

shelby in 2008 wrote:Let's review the logic I presented in this thread. Is there a net divestment of capital from juniors along with a dilution as number of juniors proliferate? If yes, then when and why will that change?

shelby in 2011 wrote:If there is cash flow, agreed that won't be ignored. But you are likely to see P/E ratios fall to historic lows, as the boomers have no more leverage nor cash to invest. And imo we must factor in a $200 oil price and every thing 3 or 4 times more expensive too. And factor in increased taxation and nationalization of mines, possibly labor strikes, etc.

I think most of the moves in stocks will be liquidity based. When QE increases, stocks increase, and vice versa. Because the P/E ratios have always been sustained by leverage in the fiat system. What most people don't realize is that on a gold standard, there is no appreciation of stocks above the return on capital in a bond! Bam! It just hit me why stocks are failing!

From Howard Katz, who passed away suddenly Dec. 23, 2010:

http://www.kitco.com/ind/katz/mar222010.html

The first real time stock index in American history was an index of rail stocks constructed by Charles Dow in 1885. This index moved sideways from 1885-1896, when it was replaced by the Dow Jones Averages. From 1896 to 1933, the Dow Jones Averages also moved sideways (the bull move of 1922-29 being offset by the bear move of 1929-32). That is, for almost half a century real time stock indexes moved sideways.

This is indeed what stock indexes do in a free market economy (which includes a gold standard). The wealth created by the productive geniuses of the country flows through to the average person. The large gains in the productive genius’ stock are offset by the declines in his competitors’ stocks. The people get richer, and the stock market goes sideways. The only reason that the stock market has gone up since 1933 is that F.D.R. introduced the printing of money and the easing of credit. As [REAL] interest rates go down, stock yields go down along with them, and this of course means that stock prices and P:E ratios have to go up. (F.D.R. knew this. His motive was to rob from the poor and give to the rich. So you see, pretty much everything you have been taught is a lie. And we are now very close to the point where that lie is going to cost you dearly.)

So you are buying into a very overbought stock market. If Bernanke has to tighten, then it will drop like a stone.

Under a gold standard, stocks (on average) return only a dividend, no appreciation. The return on stocks will not exceed the return on treasury bonds. The only reason stocks appreciate into a greater fool game, is the presence of credit at REAL interest rates which are too low. Since we already have negative REAL interest rates, there is no more gas to pump up stocks. They are finished. They will be depleting and dying (on average). And further diluted with more and more new issues (5000+ juniors).

I learned it from Howard Katz, and I keep that article in my mind all this time.

Here is more evidence, mining stocks performed horribly (on average, only Homestake did well) at the start of the great depression:

https://goldwetrust.forumotion.com/t15-junior-mining-companies#544

They didn't do well on average until after FDR destroyed the gold standard in 1934.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Re: Stocks vs. Precious Metals vs. Bonds vs. Real Estate

Post  Jalec13 on Sun Apr 24, 2011 11:21 pm

Shelby,
I would appreciate if you could send me a private message. I am new to the site, and have been reading through the vast amount of information, but have some questions I was wondering if you could answer for me. Thanks.

Jalec13

Posts : 1
Join date : 2011-04-24

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Buffet's criteria

Post  Shelby on Fri Nov 18, 2011 8:08 pm

http://finance.yahoo.com/news/buffett-ibm-buy-says-next-050119989.html

• Free cash flow, or cash on hand after covering costs, of at least $250 million. Without strong free cash flow, a company would find it tough to expand its business, develop a new product, pay dividends, or reduce debt.
Net profit margin of 15% or better. Net profit is net income divided by revenue, and can indicate whether a company has control of its costs.
• Return on equity, which is the amount of profit returned as a percentage of shareholder equity, or a firm’s total assets minus liabilities, of at least 15% for the past three years and including the most recent quarter.
• A dollar’s worth of earnings creating at least a dollar’s worth of shareholder value over the past five years.
• Ample liquidity — meaning only stocks with a market capitalization of $500 million or greater, though the American Association of Individual Investors believes that number should be greater than $1 billion.

Buffet's moat:

https://www.youtube.com/watch?v=4xinbuOPt7c#t=385s


Last edited by Shelby on Tue Nov 06, 2012 3:08 pm; edited 1 time in total

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty House prices to decline -75% or more

Post  Shelby on Tue Jan 31, 2012 12:57 pm

http://www.marketoracle.co.uk/Article31926.html

http://www.financialsense.com/contributors/lance-roberts/2012/01/26/why-home-prices-have-much-further-to-fall

As gold returns as money, if we assume Mortgage payment as $ of DPI must decline to pre-1971 level of 7% (before dollar was detached from gold), then house prices must fall -50%.

If we assume the interest rises return to norm, then house prices must fall another -50%. So that makes a -75% price decline possible. Interest rates must rise to finally arrest the rise in the gold price (as in 1980):

http://www.financialsense.com/contributors/bruce-krasting/2012/01/26/bernanke-goes-all-in

Tangentially, Fed targets the incredibly shrinking prices of personal products:

http://www.google.com/search?ix=heb&sourceid=chrome&ie=UTF-8&q=shrinking+size+of+grocery+products

To the extent that inflation raises the cost of materials (which is a small % of cost of home), it will be offset by declining wages and demand as UNemployment skyrockets.

Rising property taxes will further increase the mortgage payments and thus decrease the amount of available (7% of) DPI, thus further declines in house prices.

Thus I maintain the conclusion of\ the original title of the article on this page. See the link to the gold-to-house price charts in the article on this page.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty resposting with further explanation (first was censored)

Post  Shelby on Thu Feb 02, 2012 4:26 am

http://www.marketoracle.co.uk/Article31926.html

Shelby wrote:
House prices to decline -75% or more

Sorry couldn't find the following articles on marketoracle, so will link the versions that appeared at another site.

I understand that Nadeem thinks inflation will lift all boats including houses, but the math below is fairly convincing. Perhaps the only factor I didn't include below is Asians coming in to provide additional demand.

As usual, this is written in terse style, good for people with a high IQ that can connect the dots. Not good for people who have less than 130 IQ.

http://www.financialsense.com/contributors/lance-roberts/2012/01/26/why-home-prices-have-much-further-to-fall

As gold returns as money, if we assume Mortgage payment as $ of DPI must decline to pre-1971 level of 7% (before dollar was detached from gold), then house prices must fall -50%.

If we assume the interest rises return to norm, then house prices must fall another -50%. So that makes a -75% price decline possible. Interest rates must eventually rise to finally arrest the rise in the gold price (as in 1980):

http://www.financialsense.com/contributors/bruce-krasting/2012/01/26/bernanke-goes-all-in

Tangentially, Fed targets the incredibly shrinking prices of personal products:

http://www.google.com/search?ix=heb&sourceid=chrome&ie=UTF-8&q=shrinking+size+of+grocery+products

To the extent that inflation raises the cost of materials (which is a small % of cost of home), it will be offset by declining wages and demand as UNemployment skyrockets.

Rising property taxes will further increase the (total) mortgage payments (costs) and thus decrease the amount of available (from the historic 7% of) DPI, thus further declines in house prices.

Thus I maintain the conclusion of the original title of my article on this page. See the link to the gold-to-house price charts in the article on this page.

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Armstrong is master of longer-term cycles

Post  Shelby on Mon Feb 20, 2012 6:09 pm

We should listen to Martin when he applies his long-term cycles, not when he is applying short-term "reading the tea leaves" (where he colors his analytical thought process too much by his recent emotional prison experience).

http://www.marketoracle.co.uk/Article33216.html

Martin Armstrong has also had a terrific track record. Here were his predictions he made in 1998 (see the [URL="http://www.martinarmstrong.org/files/1998%20fall%20Seminar%20Tour.pdf#page=38"]last slide of this presentation[/URL]):

1998 = Collapse of Russia
1999 = Low Gold & Oil
2000 = Technology Bubble (Like Railroads in 1907)
2002 = Bottom US Share Market
2007 = Real Estate Bubble, Oil hits $100
2009 = Start of Sovereign Debt Crisis
2011-15 = Japan Economic Decline
EURO begins to crack due to debt crisis
2015.75 = Sovereign Debt Big Bang

All of those predictions up till 2011 have come true. If the last one also comes true, then the above targets for Gold and Silver would become extremely likely as faith in paper currency would likely smelt like snow in the sun.

Looks like 2018 will be the launch of the new global Phoenix currency, which appears to coincide with when the USA stock market will get ready to run up and the PMs will peak sometime before 2020:

http://www.financialsense.com/contributors/chris-puplava/can-you-tell-the-difference-between-gold-and-the-s-and-p-5000

https://goldwetrust.forumotion.com/t174-big-picture#4590
http://www.google.com/search?q=site%3Agoldwetrust.forumotion.com+Phoenix

Shelby
Admin

Posts : 3107
Join date : 2008-10-21

http://GoldWeTrust.com

Back to top Go down

Stocks vs. Precious Metals vs. Bonds vs. Real Estate - Page 2 Empty Re: Stocks vs. Precious Metals vs. Bonds vs. Real Estate

Post  Sponsored content


Sponsored content


Back to top Go down

Page 1 of 2 1, 2  Next

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum