Why should I invest in Gold coins?

Because investing in beanie babies would be a huge mistake.

 

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I haven't had any difficulty in finding undervalued stocks over the past year. It's just a matter of technique combined with hard work.

 

Ahh yeah, that. Since the only results that we have to go on on this matter is what you post here, I'm reminded of this. You recommended Bank of America as a good value in August and that your theories about it were confirmed by Warren Buffet. I believe you said the company had sound financials. Anyone with countering ideas were attacked. Well. Since you made that proclamation, BAC was found to be lying about the money it received from the government and it's stock has tanked again. Anyone who took your advice then would be 34% in the hole now.

I always say the proof is in the pudding as this example proves. As I said above, the value of a stock is only as good as the decisions made in a boardroom. Nothing more, nothing less.

 

In that case you should go work for hedge fund Either way we can all boast about our real or fantasy portfolio and how well it is doing but in reality most funds and portfolio have been flat for last decade or so. Why?

1. ETFization of the market, good and bad companies get pooled together under a particular sector and gets traded with them. As a result if something bad happens to the sector (Conflict in Libya or Euro crisis) the stock gets hammered even if the company has is not in any way impacted by the event.
2. Automated trading has driven volatility up way up and these huge swings in the market makes it very trade for your average joe to trade in.
3. Growth is already priced in, these days it is hard to find good growth stories like Amazon. Take for example Groupon (or $100 billion impending FB IPO), a decade ago this stock would have gone public a year ago for couple hundred million. But these days issuers and venture capital are quick to pounce on next big thing and when they release it make sure the company makes as much $$$ as possible when stock is issued. In fact every IPO in last couple years is trading levels at far below its issue price after 1 week.

 

I also recommended INTC, BDX and XOM which are all higher. That's why diversification is important. As it happened, I bought those 3 but not BAC since I also believe I indicated that I don't invest in financials. But you are correct that I think BAC may turn out to be a good speculation. But you bring up an important point, that I shouldn't tell others what I think about specific companies because they may not understand the risk, won't know when to sell, and won't treat it as part of a diversified portfolio.

 

Whatever stocks I say I own, I own. Nothing is fantasy, but you have no way to know that so believe what you wish. For me, the past decade has been a good one since I was heavily in PMs and energy with a portfolio management technique to handle fluctuations. As I've stated elsewhere, I sold a lot of my PM investments in Q4'2010 and Q1'2011. It is of no concern to me what you do, but there are many younger folks here who might believe all of the anti-stock trash talk around here and I don't want them to miss out on common stocks because they are one of the greatest wealth-building opportunities available to the average person. I made my first investment around 1971 and despite starting during a very bad period for stock returns, this has been the best financial decision I've ever made. A word to the wise should be sufficient.

 

This only proves the "Shoot at a target enough times and you are bound to hit something." theory. It's hardly investment advice. Unlike these, which I don't even remember, you went into a multiple post defense of why your analysis of BAC was a good stock including your absolute insistence that had "strong financials". Yet despite this talk BAC experienced a rather stunning 35% loss immediately after you said that. It would be even worse for them if it had not been for intervention last week. Their stock slid below $5.00.

It continues to prove my point that investment in PMs has a completely different risk potential than that of equities or for that matter any paper investment these days. The risk of paper has been greatly magnified or is even indeterminate now, due to the lack of enforcement of even basic laws that regulate the finance industry. It's been 3 months since the debacle at MF Global and yet not one person has been charged with a crime. Anyone investing in paper, is delusional if they ignore this moral hazard when approaching paper investments. The example above of BAC is clear enough of how one can be duped when they do.

So to answer the OP, this is an example (of many) of why one holds gold.

 

Well, gold is down 16% and silver down 42% too, but you continue to claim they are risk free. For anyone who cares, below is our exchange regarding BAC.

I currently do not own any bank stock, but I'm looking at the group. I don't want to leave fatima with the idea that there is no risk, but the report of the death of banks has been greatly exaggerated. It is impossible to have a capitalist system without a banking sector to support it.

Read more: http://www.cointalk.com/t190568-8/#ixzz1hlounqEz

Originally Posted by fatima
The number is meaningless without knowing what they owe on what. It's certainly not flowing to shareholders as they are being routed as we speak.
To a value investor, it may be a signal to buy. To a technician, it may be a signal to short. To folks who don't know anything about investing, price = value. I don't know what will happen in the future, but BofA is a cash rich company with a positive cash flow and a sinking stock price. There are opportunities there for people wise enough to look for them. But as is always the case with investing, there is no penalty for inaction, and there are always chicken littles.


Read more: http://www.cointalk.com/t190568-8/#ixzz1hlmlGreH
Originally Posted by fatima
BAC has two lawsuits filed against them (AIG, State of NY) for about $20B alleging numerous types of fraud committed by this bank. If so, their balance sheets are meaningless. The SEC now also being investigated covering up much of this sort of activity for the last 20 years by illegally destroying documents.
With Warren Buffett's investment in and endorsement of BofA today, I guess we can put to rest your incorrect theories about the bank. The market has a way of crushing incorrect theories with cold hard reality.


Read more: http://www.cointalk.com/t190568-9/#ixzz1hln8Vdnx
Originally Posted by fatima
Hmm. It means the bank was lying about needing the money. They are paying loan shark rates to Buffett. No sensible bank would pay him what they are paying unless they were desperate. Did you even bother to look at the terms? A healthy bank, like the one you claimed BofA was, doesn't just hand over that many preferred shares to a private individual unless they had to. They just gained another master. I think it confirms what I am saying.

Buffett also violated his own tried and true investing advice in this deal so obviously there is more here than meets the eye. The DNC convention where it's expected that Obama will be nominated again, is going to be held literrally across the street from BoFA's HQ. How would it look for Obama to be standing in the shadow of a boarded up 60 story bank skyscraper? (There is already one like this down the street that Wachovia built, being rented in part by Duke Energy, which BTW is footing the bill for the DNC.) Buffett is a close adivsor of Obama's.
Well, you're wrong again. Buffett called BofA. BofA didn't approach Buffett asking for money. 6% on preferred is far below what GE and GS paid Buffett for their preferred issues, so one can infer that BofA is far more sound than those companies were when Buffett invested. And the warrants were also above yesterday's price and could raise additional money for BofA at a price above what you said was too high. With informed investors throwing money at BofA, it is obvious that the low price far understates the true value of the company.

So this is total confirmation of your error in analysis of BofA, and the price is already well above the level at which you trashed the stock even though the general market is down.

Case closed. LOL.

Read more: http://www.cointalk.com/t190568-9/#ixzz1hlnNMkdb

 

Right off the bat you got it wrong. I didn't say investments in gold and silver were risk free. I said the risk is different than that of equities. Huge difference.

This is a fine example of your primary problem on this forum. You only see what you want to see and ignore what your eyes tell you. It's why you get it wrong in almost every post.

It's the actions that matter.

 

Baseball and Football cards are down also. If you only buy gold coins that you love and you wouldn't mind keeping if you have to then it's a win, win.

 

BDX is trading only 10% over it 52 week lows so i am not sure how it is trading higher than you recommendation. Either way just because you saw gains doesn't change the fact that overall markets have been moving side ways for last decade or so and IMO that will not change for a while.

IMO as i said before what drives the markets higher is growth (Domestic/Intl and innovation). Domestic growth is hard to come by these days and is hard for any sort of strong growth socks to present themselves in this market due to issues i illustrated earlier. Plus most of innovation is now happening over seas (see where current crop of billionaires are coming from).

 

I agree, you don't know. And have no interest in learning. So people can choose to either learn something about value investing, or listen to your guesses about the overall stock market. But this points out that I made a mistake by discussing specific investing ideas, so I'm not going to do that anymore. I'll continue to invest in stocks, and follow the portfolio methods I've discussed elsewhere. Good luck.

 

The Wall Street Journal took Ron Paul to task for being almost totally invested in precious metals and mining stocks, without making hardly any specific trades in years, so I guess the brokerage houses and investment houses don't like people like him.

To answer the OP question, I would say buy gold because the central banks are buying at record levels. They must know something important.

 

Hmm where did i say no interest in learning unless you meant learn from you no offense but i don't see how exactly your investment strategy is any different that what i and most people have done.

Added: heck a lot of value buyer did buy Financials and got burned badly. Either way i am talking not about your strategy to make $$ in this market my apologies if you mistook as bashing your strat. there are plenty of ways to make money if you are an active investors,but what i am referring to is the market in general (most Americans are invested in 401k which have their $$ tied up in MF) which i believe will be heading side ways for a while.

 

I normally pick stocks with a history of growing earnings, low debt, positive free cash flow, a price earnings ratio in the 10 to 12 range [depending], and capital allocation decisions favorable to shareholders [normally through payment of dividends or repurchase of shares]. I use Robert Lichello's portfolio management technique, and I have a bias toward energy companies and against financials. I'm sure this isn't different from what many professionals say they do, but perhaps the difference is dicipline and the ability to wait since I don't have any quarterly benchmarks to meet. For gold stocks, I look for companies run by people with a track record of success, such as Rob McEwen.

This is probably too general of a description to be of much use, but this forum isn't really designed for it.

 

Haven't tried that but i will look into, but do you expect the OP or average Joe to be able to make money in this market even though every Mutual fund has posted much in terms of gains over past decade, that is the question i am asking.

 

If you want my opinion, the OP probably won't come back to this thread. I think he was just trying a round-about way of spamming everyone.

Chris

 

Nobody knows the future. But the way I'm playing it is that after a dozen years of going nowhere, the stock market now has a much higher probability of rising than a few years ago, if only because revenue and earnings are higher and growing while prices have not. Every other time in the history of the US stock market, a prolonged period of stagnation or decline in the stock market has been followed by oversized gains. For people unable to choose their own stocks, an index fund or large cap mutual fund is a pretty secure alternative. Don't follow my advice blindly [I'm usually early] but do your own research. Gold will not go up forever, and stocks will not go down forever. It's up to the individual to know when to make the switch. I've reduced my exposure to gold and silver, and increased my exposure to stocks this year. Take it for what it's worth.

 

Historically markets went higher because US economy has grown consistently for past 50 years but that is starting to shift as our economy is stagnating in a manner very similar to another country: Japan which since 1990 has experienced what many called it Lost Decades (same term is applied ironically to US's last decade). Japanese Nikkei never recovered the highs it reached in 1989, IMO US is in the same boat as Japan an aging population (immigration is drying up), large debt burden and a huge government spending which makes up large portion of overall economy.

 

And historically, one invested long term, buying stocks and bonds, and holding. There were historically, holdings that were safe as for "Widows and children", but just as we left the phonograph, B/W TV, and Pat Boone in the past, I think to make money today, one must be willing to put the away the idea of longterm forcasting, 200 day MA, and banks and investment houses protecting the investor.

Today the US is the best house on a bad world block. If you just look at one house, it might look bad, but in comparison to the other houses ( countries) it is doing the best. Almost everyone expected a year ago, that the USD would crash badly in comparison to the world currencies, but not so. Most ( especially on the bullion forums) thought gold would be 2000 today if the euro nations were in such bad condition, but no, the world prefers to own the USD as protection rather than gold or silver. I have a feeling that as things get worse this next year, PM will suffer as the USD gains even more strength, and the Euro goes down. Of course with the Mideast and possible asian conflicts, this could be changed, but don't think PM values will be "slam dunks" at all. I like gold, but hedge it.

Don't let anyone say they know where gold or silver is going, this week, this year , or this decade, not I either, so only invest what you won't need for a while and preferably only what you can afford to lose without affecting your life style.
Jim