Anybody remember this thread ?

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This of course perfect and true - this also is applicable to most (if not all)TPG modern coins, AMSE and silver bullion.
It's a funny thing to me but when gold and silver are way up as they were awhile back you could not get a word in here edgewise about it. What's funny you ask? The fact that the opposite should hold true. When gold and silver are down and getting hammered is when people should be talking about it. That's when and where the buying opertunity is exciting and real.
I've said it before and I'll say it again, "you don't make your money selling, holding, waiting, talking or dreaming - you make it when buying"!!!

There are many different rides at this park called "coins" "the one I do not ride is bullion"! With true nice original collector coins you always have something that will be sought after and remain somewhat stable. With gold and silver you got such a thin margin and so many forces out of your control. That plus it's so high in price to begin with it ties up your money. In fact from an investing viewpoint that's about the only thing it is certain to do most of the time, "tie up your money"!
Sure there is people who hit it right and make money but the majority will lose, (or at least not gain) in the long haul.
If you are holding gold at $1150 or more the chances are very real you will lose as much as $400 easily - that is very likely. It's moderately likely you could lose as much as $550 and it's even possible you could lose will lose $700! Laugh all you want but I've seen it, it's real! I've seen, bought and sold it at $280 not 8 years past.

 

I agree with everything except the above. I seem to recall similar statements when gold was half of today's price. There is no doubt that those people overpaid, but it's too early to assume that the loss will be permanent. Perhaps we can pull-up this thread at sometime in the future and have another good laugh. Nobody knows what the future will bring, but human nature dictates that bull markets run longer and move much higher than anybody could have imagined before they began. Maybe gold will too, or maybe not. We'll have to wait and see.

 

Your points are good and true, pretty much but,,,
Most will lose. The operative word is "most". I'm not talking about the folks on CoinTalk, the ones that go to shops and shows, the ones that subscribe to Coin World. I'm talking about all those thousands of folks who dabble in this on the side and hit the high points of frenzy. The people who are thousands, tens of thousands who like cattle are hearded up on the high points and somehow get that weekend itch to buy/invest in some gold and set it aside. After that they sort of fade around the block for a few years and hearing this, and that then realize "you know that gold I bought ain't doing much", "I'm over it honey, lets sell it". This is regardless of currect price or trend at that point - their just over it!
This is the lions share of most all of it, tons of it, much of it!!! This is just one reason why it's a bad investment.

A few years ago a strange sort of guy came into a local coin shop. He was kind of different as he always wore all white clothing, I mean shirt, pants, jacket, shoes, tie, hair - he was called Mr. White after that. (You know I couldn't make this up don't you?").
Anyway he always had rolls, 2, 5 or 7 of Kugerands and wanted to sell them. He had some story about some family member of friend buying all this gold when it was $800 back in the late 80's. The problem was, and this to me helps predict the future, he was bringing it all on the market when gold was below $290 - every bit of it. He would come in on many occasions and each time bring several rolls of this stuff, each time he would leave with thousands of dollars but,,, what did he or someone else pay for the junk at some point back of this???

This/he is the most that I'm talking about!!

 

Cloud, what I think you're missing in Doug's point is this:

Gold once sold for $1000/oz and went down to $300/oz and within the last few years has finally achieved the $1000 mark again. So, that's even money, right?

wrong! Inflation has eaten most of the money in the intervening years, and had you taken what was left after the price of gold fell, and put it into any one of a number of investments, you'd be far ahead of the $1000.

Just because it's the same price as it was at one time, doesn't mean it's as valuable.

 

wasn't the original thread speaking about silver proofs and not gold Doug?

 

It all boils down to casual investors are stupid people. They buy high and sell low. Always have, always will. But, thats how guys like me who do the opposite make a lot of cash.
Guy~

 

I didn't miss Doug's point, but you missed mine. I don't think it will take anything like the 25 years it took gold to recover from the 1980 bubble for a $2000 purchase price error to be bailed out by the market. And as you pointed out, an inflation adjusted $1000 today is a bargain price compared to the same price in 1980. Time will tell.

 

I agree that most will lose, but this phenomenon is not confined to gold and silver purchases. The same can be said of other investments. About 10 years ago, I read an article that calculated that in total over the life of the Fidelity Magellan Fund, one of the most successful funds in history, more money was lost by investors than gained. How could this be possible? Well, most of the spectacular gains under Peter Lynch were made when the fund was very small. After it became the giant, the outperformance ended and measures of flows into and out of the fund indicated that most of the purchases came near the highs, and liquidations near the lows.

I was just referring to one very specific case where some folks overpaid, but may yet be bailed out by the bull market.

 

Its all about timing!!

 

I am trying to understand not argue so bear with me here...

Isn't it the same market forces that recover the price back to $1000 faster now that drive the other markets?

My point is that although markets may recover previous levels, I don't think that they recover value. As you said, the 1980 $1000 value is much higher than the current $1000 value, but if as you say the markets will now recover faster, the recovery of value happens faster.

I say that if there was a bubble, even if the market re-gains its level, it will never recover value as compared to the other markets. Bubbles build on price that is higher than actual value, hence why they burst. When they finally burst, the value becomes more equivalent to the actual value. $1000 value gold didn't exist in 1980, and probably doesn't now, but people will pay that much for it and so the market gold price is what it is, the value is what it is, and relative to other assets if you retain the gold, you may be forgoing a better ROI elsewhere.

Am I getting your point?

 

Dollar bubble

Any one think about a dollar bubble rather than a PM bubble. There are many items including oil that is dollar denominated.
Printing money at a rapid rate might be the only way the Fed thinks they can get out of the squeeze.
Make someone else pay for spending habits of our Government. Remember the government does not create wealth , they spend it. They have no idea how to run a corporation let alone take care of the items given to them by the States to take care of in The Constitution.

Pep

 

Pep, the federal government does not receive items from the states. The federal government operates under constitutional authority with the remaining rights being reserved by the states.

My point is: The gov't is the big dog at the table, the states get what's left, not the other way around. At least not since the Civil War.

commodities can be valued by many yardsticks, and it is the relative values of each measuring stick against the next that determines relative value, so IMO currencies don't have bubbles because they are not a commodity, but rather a measurement of commodities.

 

I'll be the first to admit that gold will not provide the best long term return compared to other asset classes. But I think it has its place and time. And you are correct that once money is lost, it is difficult to regain compared to other investments that will also be rising. For example, if one person invested in the stock market when the Dow was 14,000, and another invested in gold, the stock investor would be way behind. If the gold investor now switched to stocks, the all-stock investor would never catch up. The only thing you can do is start fresh every day, and ask yourself what you can do TODAY that makes sense and has a high probability of a positive return. It doesn't matter at all that gold was $850 in 1980 or $$300 eight years or so ago. But no investment always outperforms all other. Sometimes stocks, sometimes bonds, sometimes cash, sometimes PMs and sometimes other commodities will outperform for months or years at a time. You don't have to make back the losses in the same way you lost, so there are always ways to recover value.

 

This fellow is no fool......s/he reasons well

I totally agree with cloudsweeper in this particular.
God gave us brains because She wanted us to use them. Do so, and then remain secure in your opinion or judgement and act accordingly. If later, you discover that you were mistaken, then modify as appropriate. That's called learning. It's a process that never ends.
---
BUT, if it happens that you disagree with him, please favor the rest of us with your reasons ( as so many have already done ) that all may compare and contrast, apply each mode of thought to their own particular set of circumstances, derive the benefit therefrom and we shall all flourish, as a society if not individually.

 

agreed, cloud. I also think that it points out why you diversify your investments as a product of your comfort with the risk level and that you should never be "married" to an investment

 

I understand your point and indicated that I agreed with everything you said except one point. Obviously, those people overpaid, as you indicated, for the reason you indicated. I only disagreed with one point -- that they will never make it up. I think there is still a good chance that the market will bail them out of their bad decision.

 

Correct

 

the highest retail selling price is $2,500.00 per ounce. some dealers were bidding $2,000.00 per ounce from the public during december. dealers to dealers price is bid $2,200.00 ask $2,300.00.

currently the proof move up a little bit from its low. somewhere around 10%. now retail selling at $1,760.00 per ounce.