Stock to PM's

I own that one too .

It should be OK until interest rates rise.

 

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My view, not that I'm advocating buying anything, is to buy easily liquidated bullion as close to spot as possible. Fractionals and ASE's are generally never the cheapest. People who have money to spend on gold don't want fractionals.

If SHTF, no one will care whether a coin is numismatic ... at least for a while.

 

Well if you want to get fractionals for close to spot you may want to look at NCLT, you can get them at close to spot price in secondary markets and most of these are 999 so easily turn around and sell it at even pawn shops. Thats what i have been doing

 

As are yours. I'll agree with you that if someone is a complete financial idiot and decides to invest in individual stocks, they will probably lose money. And if they decide to invest in an index fund, their profit and loss depends on the price they paid vs today's price. This is similar to gold. Gold is not an earning asset, so your profit and loss depends on today's price and not on any skill you bring to the game. MF Global type events have always and will always occur, just as they have since the beginning of stock markets and banking. I know you are really frightened by the MF Global scare and will probably never invest again. That's your decision to be forever locked into a single investment, just like an index investor. But don't confuse intelligence with a bull market. It is only the people who know enough to sell after a long rise and look for the next big thing who will keep the bulk of their profits. For me, the key to safety is to concentrate on stocks that are good value and to buy them within the framework of a portfolio management strategy that varies the ratio of cash to stocks depending on prices. There is absolutely no difference between you and someone with their money in an index fund. It's just that the two of you chose different horses to ride.

 

I'm not a major investor by any means but this is exactly my viewpoint. I don't agree with this post because I'm "lazy" or "don't read". I agree with it because I HAVE been reading and listening to people who were actually affected by this stuff. I've listened to many people who are willing to face the unsettling reality of what things have become (degenerated to) and what the future looks like going forward. Normally history can be used as a valuable tool to predict future events. I don't think it's valuable anymore to use the past to judge what the stock markets will do. The next 30 years will not remotely look anything like the last 30 years. Not possible. I agree with all points fatima has made and then some.

Anybody who doesn't think that almost every company isn't cooking the books in some way, shape or form, to meet projected earning reports is not being realistic. To varying extents, they all are. You cannot trust these people. As long as somebody hasn't been burned by the corruption, dishonesty, lies and gambling, they will keep promoting it. Just don't talk to the people that have.

On top of that, besides the numerous LEGAL ways people are allowed to confiscate your profits through fees and taxation, I'm a strong believer in the fact that if you don't personally have it in your possession, you really don't own anything. When it comes down to it, that is a fact.
You've got people from NASA developing computer programs and algorithms to analyze internet traffic to make trades in 30 second intervals or less just for the sake of skimming pennies off the top. Over and over again. Everybody has their hands in things, skimming. If people really understood how bad it is now and how much funny business is allowed to go on, they would get out immediately. May as well try Vegas.

Not to mention the government debt time bomb that keeps ticking away, just in entitlement programs alone! Just because things have been able to sustain this long (for 30 years) doesn't mean they'll be able to sustain for another 30 now that the situation is exponentially worse. Far less likely they can. IMO, it's dangerous to view this situation as people simply "crying wolf" year after year. The wolf may actually be here now. Lets remember he eventually does come at the end of that story!

It could also be argued that everybody is in the stock market because it is the status quo. It should be about maxed out where it is already. Relatively very few are invested in PMs so they should have a long way to run. Personally, I think people haven't even begun to seek shelter in PMs yet compared to what's coming. Time will tell though. Good luck to all, whatever your decisions may be. I have no ill-will towards anyone's decision.

 

That's the problem. There really is no safety involved. This isn't the market of the 20s or the 50s or the 70s. There were actually far better regulations in place in the 70s then there is now. The regulators are paid off. They'll go after the little guys to make an easy point but won't go after the big guys because they can't afford to do so. I have seen so much negative information concerning the current state of the markets that I stay away. If the DOW drops to 5k, I might look around for some bargains. Or, maybe not.

Needless to say, I think it would be very difficult to take a lump sum of money right now, in 2012, dump it into the markets and come out ahead in my lifetime.

 

But if you know what the game is, you can play it. However, it does require a massive amount of education and diligence.

For those not willing to put in that amount of effort there's "trend following". The trouble with trend following is that, for most people, the ratio of 'hits' to 'misses' is low, and most people cannot psychologically ride the 'hits' long enough or dump the 'misses' quick enough to make money overall. Too many unsophisticated trend followers focus on being 'right' instead of making money.

 

I'm not sure why you quoted me with such a response. I never said that you couldn't adopt the same kind of nasty tactics, but I'm willing to bet that most people who are posting on this forum and in general have no interest in trying to beat the system by these methods. Instead, they are looking for a chance to protect the wealth they have and to make a little money, as was once possible, by investing in the productive output of this country. When regulators, political officials, and TBTF industry destroy the faith in the utility they once provided to individuals for such investment, IMO, the small investor has no option but to get out. Gold is one of their alternatives and one that has done quite well because of the loss in faith in "paper".

Investing in gold doesn't require a PHD in modern finance to navigate safely nor does it require huge amounts of money to participate in. If, as you suggest, these are needed now to make the stock market work for you, then it's further proof of what I said above. I will continue to suggest that before ANY investments are made, that people first take care of some basic common sense items concerning the elimination of debt and making sure that you have emergency savings standing by.

 

I don't believe many people can honestly lay claim to this status. There's people who can play 'the game', people who think they can play the game and people who don't realize it's a game. It all amounts to the insiders getting rich.

The Wall street insiders who live it every day,work there and are raking in the profits (from who??) are always going to be miles ahead of everyone else. If they get news hours or even minutes ahead of you, you could have a loss up to and including everything. The horses will almost always be out of the barn by the time you get to react. If people even try to react. The wealthy have insiders and people doing the work for them. The average guy with a 401k does not. So is it a game for the average guy?

 

That's the unfortunate truth. It's only called "insider trading" when someone gets caught.

 

I am sorry sir, but I am the CFO of a multi hundred million dollar corporation, and some of my friends are also. One man that I consider a friend is CFO of a multi billion dollar corporation. I personally resent your charge that "almost every company" is lying on their financial statements. That may be your perception, but its not reality. Accounting standards have never in the history of the US been so tight, and I personally have much greater trust in the statements today than in the past. THe major problem is valuation of intangibles and new types of assets, so this is why I stay away from them.

Now, you can go ahead and listen about how "cooked the books" are in corporate America from all of the chicken littles, or actually listen to someone who does this for a living. Your choice. I know Fatima won't because he will claim its my "personal anecdotes". Somehow my personal experience is less valuable than his internet research, because you know of course the internet never has any fallacies on it.

Chris

 

You completely miss the point. Nobody has made the claim that almost every corporation in the USA is cooking their books. It's yet another logical fallacy argument which creates a hypothetical situation and because it's improbable, then the contention itself is wrong. Whether you resent it or not is also irrelevant. It's got nothing to do with the stock market.

The real point is there is no longer a way to judge risk because the system itself has been destroyed by lack of regulation, law breaking, government protecting their cronies, TBTF, Fed QE, and the taxpayers being asked to socialize failure. It doesn't matter if one company is cooking the books or 100s or all of them. If you can't judge risk then you can't properly invest, period. Investment is balancing risk against returns.

 

I think you misunderstand me. You don't have to use any tactics. You just have to understand how their actions will affect the market and ride the trend they create.

For instance, I knew that GM was manipulating the numbers by storing cars on dealers' lots and counting them as 'sold' for accounting purposes.

If you understand their game you can ride their coattails or avoid their traps.

 

Ok. So 100% of them are not, but what percentage are? Is it low enough for everyone to be comfortable? There isn't a road map for people to know what's going on and who's doing what. Its kept secret for a reason. You don't really get to find out what's going on until everything blows up.
Just because somebody is your friend doesn't mean you know the intimate workings of their business. I doubt you would ever know if there was something illegal going on or not. That's not info people are going to openly share if it is going on. I'm sorry if I have offended you but knowing other CFOs doesn't prove anything to me.

 

It is definitely not a game for the average guy. It isn't even a game for non-pros ... in the short-term ... unless you're playing Level II momentum. You're absolutely right that the pros get the information before we do. But in the medium- or long-term you can figure out a few things. Look how often the majority of pros and economists are wrong in the medium- and long-term. From my viewing and reading I'd guess that back in January 2011 80+ percent of pros and economists were calling for 3.5+% GDP in the 2nd half of 2011. Some were saying 4.5-5.0%. They were wrong.

I mean, at a higher level look how many here are buying gold because they understand that the government is cooking the books. I started buying gold and silver and shorting home builders back in 2007 because it just didn't make sense to me that housing prices were doubling, but wages weren't moving. I started reading books about bubbles, noticed how every Joe Blow was flipping houses, and read articles about how lenders were offloading mortgages and retaining all the profits, but none of the risks. I took note of all the "0% interest" offers on the radio. I didn't necessarily know the intricate details of what was going on, but I knew it didn't make financial sense. That's a roundabout way of understanding that the books are being cooked. You don't know how, but you know it can't last. I only wish I hadn't been so cautious and had shorted a lot more.

That's at a macro level. At a company level you're generally going to have to be able to read financial reports, understand a company's market and know where to access information that can lead you in the right direction. You're going to have to understand things like "goodwill" and understand why it's being applied. I took a couple of years of accounting in college and I've read a few books on what to be watchful of in financial reports. Like I said, it requires diligence. The average person isn't willing to commit to that level of diligence.

 

study all your options before any purchases are made. there's a lot to learn about where & when you should buy. I strongly feel PM's is more promising as an investment more so than stocks, but thats just my thoughts. good luck with your decision & purchases.

 

Excellent example above. You really don't need any type of degree to figure out that aggregate housing prices rising 87% in 7 years where during the same period, real income was actually falling wasn't sustainable. Yet "economists" with fancy Ivy League degrees either were outright lying, or were totally clueless. They were building a house of cards reaching to the stratosphere and it became obvious to me, that a singular event would bring it all down. That event turned out to be oil prices and when they crossed $100/barrel, and started heading to $150, I knew bad times were coming. I pulled almost everything out of the stock market at the beginning of 2008 and that turned out to be a great decision. I made this decision with just a novice level of education and despite the fact that at that time, I still "trusted" the system.

This is just one part of it. Spend a little time with it, and the pieces start to fall together.

 

I was responding to your assertion that almost all corporate books are cooked. I, for one, am personally responsible for the books of a corporation of sales around half a billion. Therefor, you were accusing ME of lying in my financial statements. I included my friends since you were accusing them of being liars as well.

Regarding companies that blow up, almost all of them have operations that I bet you do not understand. DO NOT ever invest in something you do not understand. I do not invest in a lot of firms since too much of their income is based upon some valuations of intangibles, financial instruments hard to value, etc. Throwing money blindly at any investment is foolhardy. However, having a few firms go bankrupt in a time of financial struggle is not unusual, and further is not cause to be personally calling me and men and women in my job around the country thieves and cheats. I was personally attesting that the financial rules for GAAP accounting have never been stricter, so I strongly disagree with your characterization that reported financial statements are the worst in history.

Btw Vess I didn't mean any offense by my strong reaction, its just I took your comments personally. Its easy to say "those guys are liars and cheats", but when I am one of "those guys" you are referring to, I take it personally. Please feel free to believe all equities are rigged and not invest in them, no one has ever said every investment is for everyone. I do believe a few companies have some issues with reported numbers, and if I do not agree with the way they present their results I stay away from the company. To say globally every CFO of a large corporation is intentionally lying, though, is just an exaggeration at the least.

 

What I do is safer than lump sum investing in gold, and the method has been adjusted over time to match my personal tolerance for volitility. It may not be for everyone, but it works. Nobody should invest in the stock market without an investment philosophy and plan for what they will do in response to market fluctuations. Fear and uncertainty create bargains. Confidence and greed are usually associated with overvaluation. The more people there are with your viewpoint, the higher the probability becomes that I will make money. It is perfectly okay for you to avoid stocks, but all of the talk about rigged markets and permanently low stock prices are just fantasy, and I don't like to see the younger investors here frightened off of the best investment vehicle available to most people for making money, which is the stock market.

 

seriously look into real estate- houses are cheap right now and metals are just shy of all time highs. I am interested in metals because of numismatics AS A HOBBY. I read about it for FUN- and sometimes I pull the trigger on a sure thing like the 2011 silver eagle set. You have to wait for a sure thing and sometimes you go years without one.