Stock to PM's

Sure didn't take long...

Followed by

Case closed. :dead-horse:

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Nothing personal is meant by my posts either. However, for those who really are interested in gold investing, I congratulate you. By asking about it, you have at least seen through the cracks in the fence of the pen the status quo hopes you will remain in. Keep looking. The answers are there.

 

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Then you are expecting PMs to continue to climb. If silver (or gold) takes a big hit when the next bull market in stocks and bonds, you won't be doing so well. The "hedge against inflation" theory only holds water if you actually feel hyperinflation is coming and/or the country is going straight down the crapper for good. That's how the shady investment companies advertise it, and scare the heck out of many people.

 

So, me pointing out that the EXACT THING you protest PM naysayers as doing is IRRELEVANT when I simply point out PM pundits do the same? How is that beating a dead horse? You brought up naysayers predicting the death of PM for years Fatima, not I. I was simply saying the EXACT THING you say naysayers do, the pundits do.

That's all.

Btw, I also encourage anyone interested in investing in anything to do their own research. There is always people on both sides of the fence, and you listen to them at your peril, since especially in the internet age there is nothing stopping anyone from predicting anything.

 

Very sound advice. Do not forget that most of the information that get people on a PM buying kick comes from companies that have a financial stake in selling PMs, usually using unsupported scare tactics of worst case scenarios, such as a complete economic collapse.
I am an electrician, if you do not get your house re-wired, it will burn down. Act now, my number is...

 

Lol, good analogy. To be fair, there are also idiots out there, "No, no house ever needs rewired, there is not a house in the country that has deficient wiring. You need to upgrade your plumbing, though, my number is......".

 

You seem to take pleasure in belittling other people that express an opinion.

Being selective is when someone, like yourself, takes a quote from another member and then speaks small of it.

Comments like yours add nothing to the original post.

 

I agree. There are many people out there who believe that just because gold has been in a long term bull market, it will always go up -- and they can make up all sorts of reasons why [just as people did for tech stocks in the 1990s]. The time will come [probably not this year] when this attitude will cost them a small fortune. The secret to understanding markets is to understand that nothing is permanently good - or bad. Gold is having its day in the sun. So are long term bonds which are also in a historic bull market that has lasted longer than gold's. The stock market and real estate are down. It is incredibly naive to believe this situation will not be reversed someday. :dead-horse:

 

What it adds is reality. But I'll try to soften my language next time.

 

If they believe this, then they didn't listen to what I said. However....

Anyone who says that PMs and gold in particular is over bought and over priced and that they should instead put their money in stocks better be able to back that up with something other than "Warren Buffet did it" or "look at the S&P when my Dad was investing" etc etc. has not done their homework.

The only thing that matters is what drives these investments today and ANYONE who doesn't consider the number of laws being broken, the outright fraud, the constant taxpayer bailouts, (I could go on), of the Finance Industry including Wall Street is simply deluding themselves. This collapse of trust in faith is a huge aspect to what is going to drive price and anyone contemplating it these days, would be better off going to Las Vegas were at least, the odds are known.

 

I've explained the case for stocks before. So here it is again for everyone else but you. The stock market has gone nowhere since 1998. But in the meantime, earnings and revenue for many fine companies have continued to grow. Now it is possible to purchase stocks in companies with (1) little or no debt, (2) with positive cash flow, (3) a significant dividend that is growing in the high single digits or low double digits every year, and (4) you pay only about 10-12 times earnings. I'm not talking about investing in banks or other financials. In the long run, stock prices track the growth in earnings and there is an opportunity to buy them now below that long term trend line. This presents a situation where an investment today has a high probability of significant gains over the next decade with less risk than gold or silver which are already up 6X in price. Over time, the average person has a better chance of accumulating significant wealth through the stock market than with any other passive investment. Gold is okay too and has about doubled in price since 1980 while stocks are up about 14X not counting dividends. Nothing is always good to buy. Gold was a much better purchase than stocks in 2000 after a long run up in the stock market and long bear market in gold. But now the positions are reversed, and this should be considered by everyone when constructing a portfolio. The day will come, nobody knows when, when gold and silvercoins will again be for collecting and not investing, and that isn't a bad thing for collectors. To believe that the gold bull market is permanent and that everything else is bad is folly.

That't the case for stocks and not the stuff you posted.

 

This is of course an obvious statement, but few follow it. Some do not have the reading and analytical ability to look at the internals of a company ( or a commodity supply/demand ) and be able to see future directions more reliably than someone who just listens to biased predictions from those who feel they are blessed with "vision". Most wait until something is hot~ Housing , stocks,bonds, Yen, silver,gold,platinum~ and then jump in, without knowing why those were hot and what factors can change it.

Some do not have the inclination to do the studies, basically they are just lazy, and will be susceptible to scammers and schemes. How can one determine if a stock or sector is poised for gains if you don't know their debt, cash flow, AP/AR, etc. All of this is available in SEC documents. There are software platforms that can do much for you, if you are really interested.

Some attach their finances and beliefs to certain bias of political or even religious rhetoric, rather than the current market.

For instance, one stock I own, a REIT, I purchased at 16.00 (approx). a couple of years ago, and currently it is about the same ( 16.50) It has varied up and down a couple of bucks during that time, but it has also returned about 14% interest each year. I realize that changing interest rates and real estate legislation can alter that, but I feel there will be a sufficient time to re-evaluate at that time. I appreciate the study income into my accounts. So anyone who is just depending on interest from bank accounts and CDs are not looking for other situations.

I have both stocks and precious metal interests, and wish the best to all, but knowledge is the key for numismatics as well as investing.


Ha, you beat me, and with a better post

 

Sounds like NLY.

 

No it's not the same. You completely didn't consider, which I mentioned, the outright corruption that surrounds all of the reporting, risk taking, governmental interference, fraud, lack of regulation that surrounds the financial system including any stock traded on it. When a person can no longer judge investment risk because the system can no longer be trusted, and furthermore, the government now socializes business failure, then there is no point in investing in stocks. How can anyone trust earnings, rating agencies, etc? MF Global was trusted, completely, until it wasn't. If that wasn't bad enough, here we are almost 5 months later and nobody has been brought up to answer for it.

There is no longer any way to judge any number published by any company listed on the US Stock market. They are all fine companies until they aren't. This is the point. Until these issues are clearly addressed by the political and criminal justice systems then stocks are never going to preform as they did in the past because we no longer have the stock market as we did in the past.

This is of course, why people are moving to Gold and other assets that don't require it.

 

I would say that's your view Fatima. Personally I have never invested a cent in any of the companies that went bankrupt. The closest is probably my small investment right now in BAC since I believe if the economy recovers it will have outsized returns on this low base. Most of the firms that blew up are ones with opaque operations. I have never trusted them. If my simple mind cannot easily see how they generate profits on products/services sold, I refuse to buy at any price. I "missed out" on internet stocks in the 90's because I simply didn't understand how they would make money. Same with Enron and others. I want to see that Coke sells soda worldwide therefor makes money. Every stock I own I understand how they make money, and have placed a long term value on what I think they may be worth.

I guess I understand your perspective on some recent scandals, but many have either not been firms, (Madoff, etc), or the Fed money thrust upon them. I know many share your view, and as a contrarian its music to my ears. The last time public sentiment was so negative against stocks was 1974 in my view. Look up stock performance in 1975-76.

Just my opinion.

 

You've made your case, and I've made mine. I don't consider the risks you've listed to be large enough to outweigh the potential rewards, and you believe the opposite. So there is enough information for people here to read and decide for themselves. I just want other people, particularly younger investors, to realize that it is possible to still do well over a lifetime with more conventional investment approaches than you advocate. Everyone has to decide for themselves how much gold and stock equities is appropriate for their situation. I still like gold and own gold, but not as much as I did when prices are lower.

 

I never said I was very deep Jim.

I find a lot of investing is being able to be "simple" and not get overcome with salesman talk, or be dazzled with pretty graphs. You may not maximize your returns, but I believe you can sidestep a lot of cow patties.

 

On the first point, anyone who had money in a S&P 500 index or had money in bankrupted firms. On your second issue, MF Global was a primary dealer for the Federal Reserve I'll say this again, they were a primary dealer for the Federal Reserve which means they get special direct access to the Fed and are responsible for handling the Federal Reserve's business on the open markets. There are only 21 of them in the world. You don't get any bigger or closer to the ones controlling the system than this, yet so far, not one criminal indictment. At least a couple of billion is missing, and 50,000 investors are coming to the realization their money is gone.

You guys may choose to ignore this, but this falls back into the category of defending a static view of the universe that never changes. The universe has changed and anyone who faithfully puts money into the stock market is going to get taken. This is why the vast majority of people end up with a net loss in their stock holdings.

 

Yeah, buying equities in publicly held firms is an antiquated view of investment, but hoarding a metal and burying it in your backyard is a BRAND NEW IDEA!

I have invested in stocks for 25 years, I am pretty sure I have much more in them than I have ever put into the account. I also have much more value in silver than I paid for it, both are wins for me, and hopefully both will continue to be.

 

Buying equities in publicly held firms is not an antiquated view of investment. But such a thing absolutely requires that faith is established and maintained in said markets by rules and regulations that insure everyone gets a fair chance and that those in a position of power don't use that power for unfair gain. Destroy that faith and all bets are off.

When the CEO of a several hundred year old brokerage house, one with impeccable credentials, one that had the full trust of the Federal Reserve, can bet customer's money, loose it, and not face any repercussions, then this is a huge issue. They broke the law. Where are the regulators? Nobody can now know that their own brokerage house is not up to the same tricks. Anyone, who does their own research as you advised further back simply can't ignore this. If they do, either they haven't done that research, or they won't go places that contradict their view no matter what their eyes tell them.

Your personal anecdotes are irrelevant to this argument.

 

I didn't mean it harshly, just that every investor should know that.

And yes cloud you guessed correctly.

Jim

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