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<p>[QUOTE=&quot;Blaubart, post: 2092638, member: 37498&quot;]&quot;Worst investment in history&quot; is a pretty strong statement.&nbsp; As I read it, if I can find one investment that was worse than gold, then the statement is false.</p><p><br /></p><p>First, the author compares many different asset classes to gold, which is not an asset class.&nbsp; If he wants to single out gold from its asset class, then I should be able to single out MCI WorldComm or Enron from their asset class, which of course would prove him wrong since growing $1 to $1.95 is much better than $1 to $0.</p><p><br /></p><p>Second, why examine the performance of gold and other investment vehicles over a period of 204 years?&nbsp; Probably because he based some of his analysis on the book &quot;Stocks for the Long Run&quot;.&nbsp; But, has any individual held any of these investments for 204 years?</p><p><br /></p><p>Third, since he assumes a person bought and held gold, which is one particular commodity, for a period of 204 years, why not do the same with stocks?&nbsp; The conclusion that the author of Stocks for the Long Run reached was based on the averages of dividend yields and equity growth of the entire market.&nbsp; However, if we had to limit ourselves to one company, there&#039;s a very good chance that our stock would be worth $0 since there aren&#039;t many stocks from 204 years ago that could be redeemed for anything today.&nbsp; For example, there are only two companies that were founded in 1802 that are still in business today: DuPont and Scovill.&nbsp; No companies that were founded in 1803-1805 are still in business today.&nbsp; Of course some of those companies would have paid dividends before eventually going under, and some of them were acquired instead of going bankrupt, so you wouldn&#039;t necessarily be at $0.</p><p><br /></p><p>However, the article does seem to assume one buys gold and sits on it for 204 years.&nbsp; I think it&#039;s only fair to assume the same should be true of all the other investments.&nbsp; How much would a government bond from 1802 be worth today if one never renewed it when it matured?</p><p><br /></p><p>Of course, there&#039;s also this:</p><p><br /></p><p>&quot;But the problem with that thesis is that the U.S. government has the right, any time it wants, to confiscate gold owned by private individuals.&quot;</p><p><br /></p><p>How much gold did the government &quot;seize&quot;?&nbsp; Has the government ever seized anything besides gold?&nbsp; Have other entities ever seized assets?&nbsp; How about secured creditors and bond owners in the event of a bankruptcy?&nbsp; If you picked one company to buy stock in and it goes bankrupt, it doesn&#039;t really matter how much was seized by the government or private entities, the end result is much the same.&nbsp; In the event of a large scale financial collapse, how much gold do you suppose the government might seize?&nbsp; How much money do you suppose would &quot;evaporate&quot; from the financial markets?&nbsp; How many companies might go bankrupt resulting in ordinary shareholders receiving $0 for their shares?&nbsp; In the event of a government bankruptcy or collapse, how much are those bonds usually worth?</p><p><br /></p><p>I&#039;d be willing to bet that the value of assets seized under such circumstances vastly outweighs the amount of gold &quot;seized&quot; by the government under FDR&#039;s executive order.</p><p><br /></p><p>Here&#039;s a good project for the author:&nbsp; Since index funds, sector funds, mutual funds and most other such investment vehicles didn&#039;t exist in 1802, and since he picked gold and compared it to other asset classes, why not do a similar experiment with stocks?&nbsp; Take a look at each publicly traded stock that existed in 1802 and see what a $1 investment in each particular stock would be worth today.[/QUOTE]</p><p><br /></p>

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