what signals the end of the bull market right before it crashes?

Rising earnings per share and stock buybacks are two of the greatest wealth generators available to the average person. So what you condemn, I have sought out for the past few decades with results that have surprised even me. That is why I defend common stock investing while you and a few others only see fraud. But for every Netflicks there is an Apple. It is very easy to avoid this type of problem with just a small amount of training or by purchasing index funds, particularly after a big drop in the market. Right now you have the comfort of being able to compare PMs deep into a bull market to stock performance more than a decade into a bear market. The intelligent investor will recognize that neither condition will persist indefinitely and take advantage of the situation.

 

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Personal anecdotes do no make much of a compelling point.

I do agree however that an intelligent investor may very well conclude that a condition doesn't persist indefinitely. Yet time after time, you make the argument that because stocks did well decades ago, they will continue to do so. i.e. indefinitely.

:too-funny:

 

Not at all. My argument is that as long as a company has rising earnings per share from the reinvestment of earnings and other sources, this will push the stock price up. Not every year but over time. And stocks can be valued, avoiding most of the problems you worry about. This isn't a belief that stocks will go up because they did in the past. It is an argument that stocks possess characteristics that cause them to rise over time. This makes them a good inflation hedge [and often better]. If this condition no longer persists at some point and companies cease to grow, this will change. But no such conditions exist.

 

I understand I had brought up 1980, but also used longer time frames. They work both ways, and everyone on this board knows the 1980 date for PM, but many probably do not understand why you chose the dates you did for the stock comparison. I believe the only time I have brought up 1980 is when someone, (cough, cough) stated that buying gold has ALWAYS has been good to buy. I was simply naming some dates where that was not completely true.

I do not say people "casting derision" against PM ownership are right, I am simply trying to play fair in comparisons. I was on the other side in the 90's before websites like these telling everyone I knew they should look at silver at 4-5, and being ignore and derided as a simpleton. PM always has a place in a portfolio, I think we all believe that, its just to what extent at what price point.

Like I said before, I am not saying the point you were wishing to make was invalid, I simply believe you can make it by not accentuating your dates. Your general point about the mainstream media reporting PM owners as kooks is very valid, if that was part of your point. If a second part was the mainstream media believing Wall Street is the only respectable place to invest, that is also a very valid criticism.

Chris

 

Thanks Lucy. I am glad I could help. I think if you start paying attention to the dates, and looking up why people choose them, you will see more "shenanigans" than you realize going on. This is why I characterize financial media as full of "half truths".

 

One thing to notice is that whenever someone here throws out an old date to "prove" that common stocks are a bad investment, if you go back and calculate the total return, it usually ends up being a positive number. So I would say that without picking any particular date range, the stock market is USUALLY a good place to put money, is rarely a terrible place to put money [except in the short run], and occasionally can be a great place to put money. This isn't to say that it is always the BEST place to invest, but no investment ever is.

 

There is a best place to invest, that would be in oneself. In education, self sufficiency, skills, etc. But that's just me taking what you said out of context ;]

As far as a retirement plan, I think that stocks are safer than a lot of other places, but they still carry a longshot risk that precious metals do not which is that they are dependent upon the power structures that exist today. Gold and silver would retain their value on the bottom of the ocean for the next millenium and beyond, in any civilization, in any situation. That's why I like them. They may not have the most upside, though I have argued for silver many times, but what they do have is the least downside because they can never go to zero no matter what.

 

Fair point sir, yet they can go to nearly zero. Not saying it will happen again, but $4 silver if you had bought in 1979 at $25 and factoring in inflation is about a 96% loss in value. To me losing 96% of my purchasing power is effectively zero.

I believe PM has a place in a portfolio, but the danger with them is they have no return besides principal appreciation. This makes them different than many other investments. You are right they will sit on the bottom of the ocean or in the ground for eons and still retain value, but that doesn't do any good for the owner, right?

Not disagreeing with you sir, just expanding on your point. PM is great as a contra asset to other assets, and have done great in that role the last 5-10 years. However, there will come a point at which their return is again substandard to traditional investments. That is fine with me, since they have done their job and evened out my portfolio's return. Is that point today, 2 years, 5 years away? I seriously do not know, I only know I am investing "new" money in other areas currently.

Chris

 

I agree that personal improvement is most important.

I don't find the argument pursuasive that PMs are best because they can't go to zero. A decline in price can be steep and prolonged, which can be almost as bad. PMs have a time and place, and the last decade has been it. But if I had to choose one asset class to own for the next 20 years it would be common stocks because of the compounding that just won't occur with PMs. But my financial goal is to beat inflation, not match it. Everyone has to decide for themselves what their situation calls for. In the meantime, I still own PMs because the probability of gain still seems to outweigh the probability of loss, but the day will come when this won't be the case.

 

I still own PM because I was too lazy to sell.

J/k, no matter what price they will always be a part of my portfolio. Its just what percentage is always the juggling act.

 

Most of my PM investing has been through CEF and a variety of gold stocks. All of that will be sold at some point. The coins I'll probably keep and eventually give to my sons.

 

Is that so?

Indeed.

None taken. :devil:

 

I understand the point of your post Fatima, I could take silver price in 1965, silver price in 1985, many many other time frames and showed a decrease in purchasing value compared to other time frames. I intentionally only stated $25 in that timeframe trying to be fair, and not repeated the $50 figure bandied about. With inflation silver has not always kept its purchasing power was my point, and at times that purchasing power decline can be severe. Same is true for gold, but not as wild of swings as silver, since silver tends to be more volatile.

I am very glad you took my timeframe warning to heart though. At least we both understand the power of authors picking and choosing timeframes.

Btw sir disecting two of my posts and making them appear to be a part of one post you are answering is a little misleading don't you think? I could dissect multiple posts of yours and make people believe you are saying anything I wish, no?

 

It's not really about what good a metal will do for the owner at the bottom of the ocean. It's that no matter what happens, come heck or high water, precious metals will have value until the end of time. Under the assumption that the established order of markets will remain intact indefinitely I would agree that a diversified portfolio is a sound strategy. I am not as confident as most others that this will be the case. Portfolios are managed by entities that have more debt than can possibly be repaid. I find it too risky to trust that they will be able to provide me with a tangible return if that debt is called upon, since they have already invested their customers money elsewhere and are underwater themselves. Essentially it would be like a bank run. This is the inherent flaw in fractional reserve [fill in the blank], as in loaning out the money you are the steward of to make additional profits. The derivatives bubble is going to eat all that up. I for one don't plan on being one of the people hung out to dry.

 

No.

 

this is why I have a hard time believing fatima...sure he might be a smart guy...and hey he might even know everything and be right 100% of the time...BUT and a BIG BUT...he reminds me of a used car salesman with hair slicked back and a 70's era blue disco suit with a few gold chains around his neck and more gold and silver in his teeth trying to unload...urr "sell quality automobiles at the best price EVER"

no insult intended in this but he's just hard to believe for me when he takes words you say and twists them around to what he chooses...

 

It's not uncommon for information to be discarded based on who is presenting it, and a person's character is often used as a means to discredit the information being presented, but in my view this is a stumbling block because it is limiting the scope of one's perspective. I prefer to ignore the merit of the messenger and examine the message for what it is. It can either be verified or not, and if not then it's up to the individual how much merit they want to give it, but I don't take what anybody says as gospel, and I don't discount what anybody says without first considering the information at face value. Even the most brilliant of minds can only make decisions as good as the information provided. To limit your input is to put yourself at a disadvantage.

 

Congratulations! You've cracked the code!

 

I'm pretty sure that WAS an insult. I'm pretty sure you didn't mean it kindly. When did we become so 'personal' on this site, as to sling at people we disagree with? It seems a computer and a keyboard, and an anonymity that goes along with it allows people to write things to others that we wouldn't have the guts to say in person, eye to eye. Almost like a bullying tactic. It seems there must be a rule about this..., trash the coin, not the person.. or something like that.

I am interested in the different viewpoints that are being expressed in this thread. I appreciate the fact that there are some 'experts' willing to take the time to put their thoughts here into this thread. In fact everyone has done so. The quickest way to lose participation is to trash people. In my opinion. I hope no one leaves.

Please take some heat out of this thread. It is uncomfortable.

This is just my opinion.

Lucy

 

I doubt Fatima's offended...I'm rather certain he enjoys the attention. :secret: