Gold quietly goes above $1900 again

Lol. Sorry but that is funny.

Go back to 1960 and buy either an ounce of gold or invest it in Berkshire. Get back to me when you calculate a yield difference from that time. To use a short time frame to "prove" he is incompetent is simply shortsighted. 90% of any time period Berkshire outperformed PM, cumulatively Berkshire has outperformed PM, yet people still wish to throw stones and think they are smarter than he.

Long term investors in Berkshire are millionaires today, investors in gold are thousandaires. Even after the recent events.

Chris

 

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I would agree with you in the long run, but since 2001 gold and platinum have done well. I bought silver last year and that has doubled.

In a sense Buffett is right about the pms coming from the darkness and heading back there. I don't know anyone who has grow lights in their safe.

I would rather have a productive farm than a pile of pms; it would be nice to have both.

 

In a sense sir that is what a company should be, and it is what Mr. Buffett tries to identify. If you read his books you will see he tries to identify firms that are using their assets in a productive way and producing cash. I view it in many ways like the farm you mention.

I am not one of those Buffett gurus. I do not think he is infallible, I am simply talking about him and his philosophy since he was brought up here. I believe in his value oriented philosophy though.

Chris

 

Red Herring argument. Gold was not an investment in 1960 because it's value was defined by the goverment to be $35/ounce. I was not allowed to change from this mark.

Try to address the points I made instead of distracting from them if you wish to be taken seriously. Remember, it was you who brought Buffett into this. So I would have hoped you could have defended him better than that.

 

Looks like we're seeing a nice dip again after touching $1900, and a more sizeable dip in silver. Just goes to show the difference between international and US markets. Does anybody have any info for why the dip? Prices have dropped in Euro terms as well so I don't think it's that. The stock market is down which seems contrary to what I would expect, although the USD index is stronger than it has been lately.

 

Strange that gold is dropping in both USD and EUR since the EUR does seem to be the reason for USD strength.

http://www.marketwatch.com/story/dollar-gains-amid-heightened-europe-worries-2011-09-06

 

There isn't just one thing going on. There is a pretty good selloff in the US equity markets driven by the bankster meltdown and continued bad economic data that are causing people to liquidate their stock to cash. (oh, and I'm guessing a huge exposure here to the state of the Euro) It went without a lot of fanfare since it was announced late on Friday, but the Federal goverment launched a massive lawsuit of $35B against BAC. It also hit 19 other banks as well.


Cash leaving stocks also drives the value of the USD. Not everyone sees the value of gold. When they do, you will be glad you bought physical on the dip. BTW, it's down to the price it was on Friday at lunch.

 

Good point about cash leaving stocks driving up the USD. I wonder how much of that is exiting GLD as well.

I did read about that lawsuit and thought the timing was extremely poor form. Now what are they going to do, bail out the banks again after they cut them down, or nationalize them? If they are really concerned about fostering a recovery why in the world are they going after banks' capital when they are already in a position of weakness? This is just about as ludicrous as the Obama administration telling Gibson guitars that they'd be doing fine if they would just switch over to Madagascar labor. It's this sort of thing that makes me glad to be a precious metals owner, so I don't have to worry about failed logic and dualism dictating my financial security.

 

Oh, for heaven's sake.

Fine, go back to 1973 instead. Gold was, what, $64 an ounce? And a share of Berkshire Hathaway would have run you, hmm... somewhere between $90 (its high in 1973) and $40 (its low in 1974; bad times for BH). Let's assume for simplicity that an ounce of gold and a share of BH cost the same at the time you bought.

Gold, as we know, has skyrocketed to almost $2000, an increase of close to 3000%.

BH, by contrast, has plummeted over 30% from its 2008 high. If you were foolish enough to hang on to it, you're looking at a measly $100,000 per share, an increase of a mere 150000%.

 

So the big news is that the Swiss Franc is now tied to Euro which has sent gold priced in Francs way up. With the Swiss Franc no longer a viable safe haven the USD should get more action from those who still believe in currency over metal.

http://goldprice.org/swiss-gold-price.html

 

Oh for heaven's sake. Nobody here hasn't said that Buffett hasn't had success but I was a kid in the 1970s and wasn't investing in anything. In the context of what I posted his investment successes occured 30-40 years ago. His company hasn't done anything in the las 1/2 decade. If you think following his advice now makes sense then no argument from me. I'll be buying gold instead.

For that matter Buffett is irrelevant to this topic.

 

I have always looked at it this way.

2,000 years ago an ounce of gold would buy you a very fine tunic/robe in Rome.

2,000 years ago and ounce of silver would buy you a nice dinner.

Today an ounce of gold would get you a very fine suit along Savile Row.

Today an ounce of silver would buy you a nice dinner (drinks not included of course) at Flemming's or Morton's.

It has been like this throughout history...sure some big upswings and downswings but over the centuries it does well in keeping up with inflation. I have to whole-heartedly agree with Cloudsweeper that when added as part of a diversified portfolio, it stabilizes it as it is not correlated with traditional markets. Problem is some people look at it as get rich quick and that has never worked in any investment.

I went by a local coin dealer to pick up a Panda a few weeks ago, there was a line of women extending out the door, every single one of them had sandwich bags filled with old gold jewelry. It was so bad in fact that the owner yelled out if anyone was there to buy they go to the front of the line. I am cautious right now and only adding very slowly, I have never seen a market that went straight up and maintain that velocity forever. Stocks, Real Estate, Oil....all of them have peaked in the recent decades and then retreated below they're moving averages...when I see lines of people selling, and the panic merchants hawking my brain tells me to tread softly, not that I dislike PM's quite the opposite but with a 20+ year time horizon I have some time for patience.

 

LOL! So you've gone from "gold is the only true measure of wealth" to "you can't talk about gold in the 1960s because its price was fixed to the dollar" to "I was too young in the 1970s to invest" -- just in this single thread. You're going to need to install brake lights and turn signals on those goalposts.

Meanwhile, you've shrunk your window for evaluating investments to "five years". Please don't make me go back yet again and dredge up gold's performance between 1980 and 1985, or 1985 and 1990, or 1990 and 1995, or...

 

Well, yes, but 10 years ago an ounce of gold would get you a nice suit at Men's Warehouse, and an ounce of silver would buy you a nice dinner at McDonald's.

As the rest of your post indicated, there are ups and downs, and we're seeing a really, really big "up" over the last few years. Are we near the top? As always, if I knew that, I'd be typing in another window right now. Instead, I'm buying some (when I see a bargain), selling some (when I see strong buy prices), and Watching With Interest.

 

Agree completely, the suit/dinner comparison works best when the prices are in-line with the historical trend lines which they are not at the moment. Watching, waiting and jumping on bargain opportunities while taking some profits on strong prices is the recipe for success. When they start screaming gold is heading to 5k buy buy buy, then you will know its time to go the opposite way as the hammer falls.

Precious metals, real estate, stocks, bonds and other commodities are all great investments when taken in context and with moderation. It is only those that zero in on one particular aspect that get hurt. People have made a killing the last 2 years on gold...it is possible that some will get killed over the next 2 years. I remember having clients come into my office back in 2000-2003 cashing out all of they're portfolios so they could buy/flip/rent/own more real estate....they would come in frothing at the mouth spouting "you can't lose money on real estate". I know that several of them have filed/in the process of filing bankruptcies whereas before the bubble they were sitting on good jobs...with hundreds of thousands of diversified dollars. Greed got hold of them and the rest is now history.

Everyone should take note from the past decade, there are many examples that can be used on how to do it right and sadly many more on how to get it all wrong.

 

Gold quietly goes to 1820 before "rebounding" to 1850. Those "manipulators" must be in Asia, because we all read how Asia and India are buying gold by the tonnes, so it must go up~right?.

No one knows where the top is and the "death" of the USD as a safe haven has been overdone. Tomorrow may hit near 1880 or 1780, don't let anyone make you think it is a sure thing either way. Stay aware.

 

^^ Words of wisdom, the media knows about 10% of what it spouts out, the rest is mongering for either greed/fear because that is what sells advertising not common sense.

 

I have also noticed that I am the only person buying among numerous sellers every time I buy on the dips lately. This actually makes me feel good, as the herd mentality is almost always behind the curve. This means we are probably not near a top. Some dealers may try to discourage you from buying if they think it's a good buy. When I bought the last dip at $39 they tried to tell me it would probably be lower the next day. My first thought was that they didn't want to sell to me after a 7% decline so I was not swayed, and it has not been lower than that since (although it's getting closer).

 

Well most dealers would simply put the silver in back or raise their premiums if they really didn't want to sell. I have seen many dealers have product in the back of the store since they believed it was moving higher. If you put it out on display you can tick people off if you are unwilling to sell. Put it in back and simply be "out" is the easiest course of action. I asked a dealer friend once if he had any silver dollars. He had me come around back and let me pick through hundreds he had, ("junk" morgans and peace). He said he simply did not want to put them out and have people complain that he was charging $6 when the silver value was only $3.50, but since I was willing to pay $6 he was willing to sell to me all day long.

Since the dealer did sell to you, I do not think he really was worried it was going up. Maybe he genuinely thought it was going down, and was simply trying to help. Not everyone who appears to try to help are trying to hose you man, there are still good people out there. Maybe he was wrong, but other than that you cannot be sure of his motives.

Chris

 

Germany is now on board for bailing out the rest of Europe so it's not surprising that gold is dropping since 'risk on' is in style again now that extend and pretend is back in effect. This just means more money printing in the long run since Germany will now be in the same boat as the nations they are bailing out. $1800 gold is still a 20% gain since just 2 months ago. I am hoping this dip goes a bit lower before the coin show this weekend.