Ok. Good luck on your investing journey.jabberwockOG wrote: ↑Sat Sep 19, 2020 10:55 pm Respectfully I think it also very hard to see any realistic situation where the USD fails to the extent that somehow a bright shiny bit of metal gold becomes the new medium for purchasing goods and services. I much prefer to have ownership shares in a large number of diversified revenue generating businesses as a currency hedge.
Gold continues to soar!
Re: Gold continues to soar!
Re: Gold continues to soar!
If you don't mind sharing: What other metals do you hold? How much are you frequently trading versus core holding?NoRegret wrote: ↑Sat Sep 19, 2020 11:03 pm While I’m as bullish on precious metals as any over the medium-long term, there is still too much optimism over the short term. Btw, Friday saw the PM complex closing below its trend line support.
I trade around a core position to manage volatility and my own psychology of having a larger-than-portfolio-theory-called-for PM allocation. YMMV.
Re: Gold continues to soar!
I have both gold and silver, bullion and miners. Current target allocation is 20% which I was at prior to the recent high. I'm down to about 15% net.000 wrote: ↑Sun Sep 20, 2020 12:18 amIf you don't mind sharing: What other metals do you hold? How much are you frequently trading versus core holding?NoRegret wrote: ↑Sat Sep 19, 2020 11:03 pm While I’m as bullish on precious metals as any over the medium-long term, there is still too much optimism over the short term. Btw, Friday saw the PM complex closing below its trend line support.
I trade around a core position to manage volatility and my own psychology of having a larger-than-portfolio-theory-called-for PM allocation. YMMV.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
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Re: Gold continues to soar!
Thank you000 wrote: ↑Sat Sep 19, 2020 4:52 pmAdding a hard currency to a portfolio already holding fiat currency offers more diversification than other fiat currencies:qwertyjazz wrote: ↑Sat Sep 19, 2020 4:08 am Then why not just alternative currencies (Euro, yen etc) I get currency risk but gold and dollar drift (either up or down) is also a risk.Moreover, my portfolio contains unhedged international stocks, offering some exposure to foreign fiat.
- The supply of mined metals is not controlled by any one entity; the fiat supply is a monopoly of some entity.
- The integrity of a specimen of metal can be verified by atomic analysis; physical cash cannot be verified by mere inspection.
- Gold has retained purchasing power over the long run; every extant fiat currency has lost most of its purchasing power since inception.
- Gold was historically the global reserve currency and is still hoarded by central banks; USD and GBP were the only fiats to ever fill this role.
Finally, it is hard to see a situation where the USD fails but EUR and JPY do well. I don't see either becoming the global reserve currency if USD fails because it does not seem that Russia, China, and other powers non-aligned to the US would be much happier needing to use EUR or JPY than USD.
G.E. Box "All models are wrong, but some are useful."
Re: Gold continues to soar!
Personally, I think we need a "Gold in free fall" thread except that it will be changed to "Gold in freefall."arcticpineapplecorp. wrote: ↑Tue Aug 04, 2020 7:52 pm you should change your post title to "Gold has soared." Saying it "continues" is unknown and unknowable.
A fool and his money are good for business.
Re: Gold continues to soar!
In all seriousness, if you want to hedge against a potential currency crisis, a small holding in Gold, maybe 5% of the portfolio wouldn't be a bad idea. I have thought about this myself but have settled upon a 0% commitment to gold. I sold what little gold I had in the late 1980's if I remember correctly. I will say that those Maple Leaf coins, both gold and silver were beautiful.
A fool and his money are good for business.
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Re: Gold continues to soar!
Revisiting this initial post that gave birth to this thread the day gold topped $2,000 (vs right now, where it sank below $1,900.)
Edit: On this day, Nov 3rd, election day, gold breaks above $1,900.
Edit#2: On this day, May 26th 2021, gold, having given everyone a suitable opportunity to buy the dip, once again breaks above $1,900.
Last edited by Robot Monster on Wed May 26, 2021 8:45 am, edited 1 time in total.
Re: Gold continues to soar!
Yawn. Wake me up at $3000.Robot Monster wrote: ↑Mon Sep 21, 2020 9:57 amRevisiting this initial post that gave birth to this thread the day gold topped $2,000 (vs right now, where it sank below $1,900.)
Edit: On this day, Nov 3rd, election day, gold breaks above $1,900.
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Re: Gold continues to soar!
.....
Last edited by AerialWombat on Fri Apr 02, 2021 11:42 am, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
Re: Gold continues to soar!
Thanks. Your post gave me a literal lol.AerialWombat wrote: ↑Tue Nov 03, 2020 3:33 pmOn that day, I’ll be busting out the gold pan and heading down to the river bank.
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Re: Gold continues to soar!
Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting. The reasons they give for gold prices being supported might not exactly surprise you, but I'm going to list them anyway:
-- Fed support raises inflation expectations
-- Fed keeping interest rates low for the foreseeable future
-- weaker dollar
Was there debate about whether a weaker dollar is good for gold? Well, anyway, this article definitely says yes. "Gold and other precious metals are bought and sold in dollars, so a weaker greenback makes those metals more affordable to investors holding other currencies, which in turn can boost demand." (Gold is up today, and the dollar is down, I notice.)
It says bitcoin, gold and silver all benefit from the low interest rate environment. If you want to hedge against negative interest rates, those products might just do the trick.
-- Fed support raises inflation expectations
-- Fed keeping interest rates low for the foreseeable future
-- weaker dollar
Was there debate about whether a weaker dollar is good for gold? Well, anyway, this article definitely says yes. "Gold and other precious metals are bought and sold in dollars, so a weaker greenback makes those metals more affordable to investors holding other currencies, which in turn can boost demand." (Gold is up today, and the dollar is down, I notice.)
It says bitcoin, gold and silver all benefit from the low interest rate environment. If you want to hedge against negative interest rates, those products might just do the trick.
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Re: Gold continues to soar!
It really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.Robot Monster wrote: ↑Fri Nov 06, 2020 1:38 pm Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting.
The Sensible Steward
Re: Gold continues to soar!
Correlations do change over time though, and per portfolio visualizer, GLD has had a 0.59 correlation with the US stock market so far in 2020.willthrill81 wrote: ↑Fri Nov 06, 2020 3:07 pmIt really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.Robot Monster wrote: ↑Fri Nov 06, 2020 1:38 pm Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting.
Presumably both have been moving based on interest rate and inflation expectations.
- willthrill81
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Re: Gold continues to soar!
2020 isn't even 12 months yet. I don't think that we can come close to saying that the future correlation of gold and stocks will be meaningful.000 wrote: ↑Fri Nov 06, 2020 3:35 pmCorrelations do change over time though, and per portfolio visualizer, GLD has had a 0.59 correlation with the US stock market so far in 2020.willthrill81 wrote: ↑Fri Nov 06, 2020 3:07 pmIt really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.Robot Monster wrote: ↑Fri Nov 06, 2020 1:38 pm Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting.
Presumably both have been moving based on interest rate and inflation expectations.
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: ↑Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security. Most of the day-to-day price variance will be determined by changes in real yields, not short run inflation. This is not a new finding--many famous economists have written about this in the past. Here is Tyler Cowen summarizing a Paul Krugman post in 2011 and a paper from Larry Summers in 1988: https://marginalrevolution.com/marginal ... radox.html. If one understands that gold behaves like a long term inflation adjusted bond, one would expect the low correlation in the Fed blog post. It's such a major oversight that the analysis feels like something written by an anti-gold marketing department. It reflects poorly on the Fed.
The Sensible Steward
Re: Gold continues to soar!
Markets seem to have adapted (for now) to moving mostly based on changes in interest rates and money supply. As long as that trend continues, I suspect gold and stocks will continue to have a meaningfully positive correlation. Of course, the reason to own both is for when that stops.willthrill81 wrote: ↑Fri Nov 06, 2020 4:26 pm 2020 isn't even 12 months yet. I don't think that we can come close to saying that the future correlation of gold and stocks will be meaningful.
Re: Gold continues to soar!
might be Game Over for a year, 18 months. Global reflation, gold gets forgotten. Back up the truck at $1,600, it never felt like this was "the moment" for gold. I'm sticking to my portfolio allocation but I expect it to dip 10%-20% from here.
Amateur Self-Taught Senior Macro Strategist
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Re: Gold continues to soar!
I applaud you for sticking to your allocation, and not basing investment decisions on predictions.
Re: Gold continues to soar!
How much lower do we think PMs will go? I want to finish off my Queen's Beast collection.
Re: Gold continues to soar!
I agree.
Not sure, but I think we need a new thread "Precious Metals continue to move!"
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Re: Gold continues to soar!
Gold continues to defy the subject line of this thread. Why? This article gives the reasons as:
-- optimism about cures and treatment for Covid
-- stocks moving higher "detracting some appetite from haven gold"
-- rising of the 10-yr near 1%
-- strengthening of US dollar*
*“It would appear that the dollar might have shifted focus and could be poised to trend higher off the idea that the end of the pandemic will see the U.S. economy outperform others and thereby attract inflows to its currency.”
-- optimism about cures and treatment for Covid
-- stocks moving higher "detracting some appetite from haven gold"
-- rising of the 10-yr near 1%
-- strengthening of US dollar*
*“It would appear that the dollar might have shifted focus and could be poised to trend higher off the idea that the end of the pandemic will see the U.S. economy outperform others and thereby attract inflows to its currency.”
Re: Gold continues to soar!
Maybe the title should be changed to "Gold continues to sour!"
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
Re: Gold continues to soar!
I was just thinking of selling my IAU stake. I see a down trend. Is it a good idea to convert it to VOO now?
Re: Gold continues to soar!
To some of us, this is a great opportunity to accumulate physical Gold/Silver as the mass still believes in the great illusion.Robot Monster wrote: ↑Wed Nov 11, 2020 10:39 am Gold continues to defy the subject line of this thread. Why? This article gives the reasons as:
-- optimism about cures and treatment for Covid
-- stocks moving higher "detracting some appetite from haven gold"
-- rising of the 10-yr near 1%
-- strengthening of US dollar*
*“It would appear that the dollar might have shifted focus and could be poised to trend higher off the idea that the end of the pandemic will see the U.S. economy outperform others and thereby attract inflows to its currency.”
I cash out some stock to buy some silver this week since my portfolio hit one of my cash out band.
To each its own. I am prepared.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
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Re: Gold continues to soar!
Backed the truck up on Barrick Gold just now.
Re: Gold continues to soar!
I wonder how cheap or expensive gold miners are. I'd like to see a miners index P/E or CAPE chart going back a few decades. My guess is they're cheap relative to gold and outright cheap vs their own history
Amateur Self-Taught Senior Macro Strategist
Re: Gold continues to soar!
I have shares of Barrick in my limited size fun portfolio, and was thinking of adding. Is the consensus that gold miners can indeed serve some of the same purposes as gold in a portfolio?
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Re: Gold continues to soar!
"Gold Mining Stocks: A Leveraged Bet On Gold
Investing in gold stocks or a gold-mining ETF is, to a large extent, a leveraged bet that the price of gold will keep rising. That's because a higher gold price can have a dramatic impact on the profitability of gold miners..." link
Re: Gold continues to soar!
Correlation between GLD and VIPSX (Total TIPS Fund) is 0.47. (Link)willthrill81 wrote: ↑Fri Nov 06, 2020 4:26 pm2020 isn't even 12 months yet. I don't think that we can come close to saying that the future correlation of gold and stocks will be meaningful.000 wrote: ↑Fri Nov 06, 2020 3:35 pmCorrelations do change over time though, and per portfolio visualizer, GLD has had a 0.59 correlation with the US stock market so far in 2020.willthrill81 wrote: ↑Fri Nov 06, 2020 3:07 pmIt really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.Robot Monster wrote: ↑Fri Nov 06, 2020 1:38 pm Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting.
Presumably both have been moving based on interest rate and inflation expectations.
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: ↑Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security. Most of the day-to-day price variance will be determined by changes in real yields, not short run inflation. This is not a new finding--many famous economists have written about this in the past. Here is Tyler Cowen summarizing a Paul Krugman post in 2011 and a paper from Larry Summers in 1988: https://marginalrevolution.com/marginal ... radox.html. If one understands that gold behaves like a long term inflation adjusted bond, one would expect the low correlation in the Fed blog post. It's such a major oversight that the analysis feels like something written by an anti-gold marketing department. It reflects poorly on the Fed.
My investment algorithm: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=351899&p=6112869#p6112869
- willthrill81
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Re: Gold continues to soar!
That's the monthly correlation. The annual correlation was .72 over that period.klaus14 wrote: ↑Mon Nov 23, 2020 2:24 pmCorrelation between GLD and VIPSX (Total TIPS Fund) is 0.47. (Link)willthrill81 wrote: ↑Fri Nov 06, 2020 4:26 pm2020 isn't even 12 months yet. I don't think that we can come close to saying that the future correlation of gold and stocks will be meaningful.000 wrote: ↑Fri Nov 06, 2020 3:35 pmCorrelations do change over time though, and per portfolio visualizer, GLD has had a 0.59 correlation with the US stock market so far in 2020.willthrill81 wrote: ↑Fri Nov 06, 2020 3:07 pmIt really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.Robot Monster wrote: ↑Fri Nov 06, 2020 1:38 pm Wall Street Journal has an article, "Gold Hasn’t Behaved Like a Haven Recently". It says this year gold prices have been correlated with stocks, unusually so. I suppose that's interesting.
Presumably both have been moving based on interest rate and inflation expectations.
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: ↑Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security. Most of the day-to-day price variance will be determined by changes in real yields, not short run inflation. This is not a new finding--many famous economists have written about this in the past. Here is Tyler Cowen summarizing a Paul Krugman post in 2011 and a paper from Larry Summers in 1988: https://marginalrevolution.com/marginal ... radox.html. If one understands that gold behaves like a long term inflation adjusted bond, one would expect the low correlation in the Fed blog post. It's such a major oversight that the analysis feels like something written by an anti-gold marketing department. It reflects poorly on the Fed.
The Sensible Steward
Re: Gold continues to soar!
ok. you know what else has high correlation with GLD? it's EMB (emerging debt). Correlation is 0.77 (vs 0.78 for VIPSX in the same period)willthrill81 wrote: ↑Mon Nov 23, 2020 2:33 pmThat's the monthly correlation. The annual correlation was .72 over that period.klaus14 wrote: ↑Mon Nov 23, 2020 2:24 pmCorrelation between GLD and VIPSX (Total TIPS Fund) is 0.47. (Link)willthrill81 wrote: ↑Fri Nov 06, 2020 4:26 pm2020 isn't even 12 months yet. I don't think that we can come close to saying that the future correlation of gold and stocks will be meaningful.000 wrote: ↑Fri Nov 06, 2020 3:35 pmCorrelations do change over time though, and per portfolio visualizer, GLD has had a 0.59 correlation with the US stock market so far in 2020.willthrill81 wrote: ↑Fri Nov 06, 2020 3:07 pm
It really isn't. Since the inception of GLD, the 12, 24, and 36 month rolling correlation between it and VTSAX was .08, essentially nothing. Tickers being uncorrelated with each other means that they may occasionally move together or in opposite directions. The same is generally true of stocks and bonds.
Presumably both have been moving based on interest rate and inflation expectations.
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: ↑Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security. Most of the day-to-day price variance will be determined by changes in real yields, not short run inflation. This is not a new finding--many famous economists have written about this in the past. Here is Tyler Cowen summarizing a Paul Krugman post in 2011 and a paper from Larry Summers in 1988: https://marginalrevolution.com/marginal ... radox.html. If one understands that gold behaves like a long term inflation adjusted bond, one would expect the low correlation in the Fed blog post. It's such a major oversight that the analysis feels like something written by an anti-gold marketing department. It reflects poorly on the Fed.
Then I compared returns and seems like GLD+EMB combo behaves like a leveraged (or long term) TIPS. (Link). History is limited though.
My investment algorithm: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=351899&p=6112869#p6112869
Re: Gold continues to soar!
In the very long run, bullion and miners will likely move inversely. When the supply of accessible Gold is exhausted, miners will go bankrupt but bullion will likely become increasingly valuable because there's no new supply to soak up any increase in demand.
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Re: Gold continues to soar!
I believe that gold and probably gold miners as well will substantially outperform in either of two situations: currency crisis, as nedsaid has pointed out, and also in the case of substantial and persistent stagflation. Apart from that, investing in gold miners is a wild ride, a lot of volatility, and it is very hard/impossible to estimate expected returns, harder than with equity in general. GLD tends to be less volatile than GDX but has less upside potential when the stars are aligned perfectly for PM. Interestingly when stocks are going down and gold is going up, gold mining stocks can go either down with stocks or up the metal prices. GDX doesn't always act in direct proportion to gold prices. In addition traditionally gold and precious metal mining stocks are among the most poorly managed companies in the world. When times are good and they making lots of profits they often waste it on poorly thought ventures (high cost/low yield new mines). There are a few strong players in the game--Warren Buffett bought Barrick Gold--and most of the poorly run companies have either been acquired at discount or gone out of business. So the survivors aren't as bad as they used to be.
For those who fear the final end results of our decade plus extreme monetary policies, zero or negative interest rates, and unsustainable levels of debt (governmental, corporate, and household worldwide), a 5% allocation may offer true diversification in crisis that is worth what you give up in expected returns. Currency crisis and/or stagflation are not the central projections going forward but they are possible. In stagflation, unlike stocks gold doesn't suffer from dwindling future profits in real inflation adjusted terms. In fact it gets more valuable because investor demand increases dramatically and the supply is essentially fixed. Unlike TIPS which hold their value in stagflation, gold can skyrocket. They can print trillions more dollars but the supply of gold can only be minimally increased. Bitcoin has this same characteristic, a storehouse of wealth in currency/stagflation crisis, but bitcoin has the unique problem that governments can at any time outlaw or severely regulate its use.
It's hard to get good numbers on GDX's current valuation. The VanEck website says its PE is 21.4 (TTM). Morningstar says the its PE (estimate for next year) is 12.8 which is a massive discrepancy implying either massive profit growth next year or massive error. Morningstar also estimates the GDX"s long term earnings growth is 17.6% which suggests that at PE 12.8 it's a screaming buy. Yet, once again it tanked today while the market prospered. Over the entire lifetime of this fund, 14+ years, it has essentially a zero nominal and negative real return. The final paradox about gold is that Bogle, the father of index investing, the greatest single figure in the modern history of finance and investing IMO, suggested in an interview late in his life that he held a 5% portfolio to gold. If you aren't confused by now about GDX/GLD, I suspect you haven't been paying attention.
Garland Whizzer
For those who fear the final end results of our decade plus extreme monetary policies, zero or negative interest rates, and unsustainable levels of debt (governmental, corporate, and household worldwide), a 5% allocation may offer true diversification in crisis that is worth what you give up in expected returns. Currency crisis and/or stagflation are not the central projections going forward but they are possible. In stagflation, unlike stocks gold doesn't suffer from dwindling future profits in real inflation adjusted terms. In fact it gets more valuable because investor demand increases dramatically and the supply is essentially fixed. Unlike TIPS which hold their value in stagflation, gold can skyrocket. They can print trillions more dollars but the supply of gold can only be minimally increased. Bitcoin has this same characteristic, a storehouse of wealth in currency/stagflation crisis, but bitcoin has the unique problem that governments can at any time outlaw or severely regulate its use.
It's hard to get good numbers on GDX's current valuation. The VanEck website says its PE is 21.4 (TTM). Morningstar says the its PE (estimate for next year) is 12.8 which is a massive discrepancy implying either massive profit growth next year or massive error. Morningstar also estimates the GDX"s long term earnings growth is 17.6% which suggests that at PE 12.8 it's a screaming buy. Yet, once again it tanked today while the market prospered. Over the entire lifetime of this fund, 14+ years, it has essentially a zero nominal and negative real return. The final paradox about gold is that Bogle, the father of index investing, the greatest single figure in the modern history of finance and investing IMO, suggested in an interview late in his life that he held a 5% portfolio to gold. If you aren't confused by now about GDX/GLD, I suspect you haven't been paying attention.
Garland Whizzer
Re: Gold continues to soar!
Naive question: what purpose/function does silver serve in a portfolio that a portfolio of gold, equities, and bonds/cash don't achieve?KlangFool wrote: ↑Wed Nov 11, 2020 11:29 am
To some of us, this is a great opportunity to accumulate physical Gold/Silver as the mass still believes in the great illusion.
I cash out some stock to buy some silver this week since my portfolio hit one of my cash out band.
To each its own. I am prepared.
KlangFool
Re: Gold continues to soar!
dml130,dml130 wrote: ↑Mon Nov 23, 2020 7:28 pmNaive question: what purpose/function does silver serve in a portfolio that a portfolio of gold, equities, and bonds/cash don't achieve?KlangFool wrote: ↑Wed Nov 11, 2020 11:29 am
To some of us, this is a great opportunity to accumulate physical Gold/Silver as the mass still believes in the great illusion.
I cash out some stock to buy some silver this week since my portfolio hit one of my cash out band.
To each its own. I am prepared.
KlangFool
I am buying gold and silver coins as hyperinflation insurance. In hyperinflation, the gold/silver will go up to 10X to 30X. At that rate, it is easier to buy stuff with 1 oz of silver versus 1/10 oz of gold. Silver = poor folk's gold
1 oz silver is around $25 now. 10X = $250. 30X = $750.
1/10 oz of gold is around $200. 10X = $2,000. 30X = $6,000.
I keep both.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: Gold continues to soar!
OP,
I think it is either 2 to 1 or 3 to 1 as per Gold to Silver in terms of value. It is hard to keep a lot of silver. It gets heavy very fast.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
Re: Gold continues to soar!
Valuing these mining companies is a bit different than typical stocks. A significant component of their value is their potential supply to be mined, which is finite. An inefficient company with lots of reserves may be more highly valued than a more efficient profitable one that has less reserves. Also, their profitability is highly dependent on the price of gold, so when the price is low, they make less money and have higher P/E. If they are profitable the P/E may be lower.
Also, this may no longer be true, but there was a time where some of these companies were generally regarded as not well run, but still had value due to their reserves.
For all of the above reasons evaluating mining companies on P/E can lead to unintuitive results.
Re: Gold continues to soar!
Thanks for the reply. I owned a silver etf up until recently (sold for purposes of simplifying my portfolio, among other reasons), but holding the actual physical metal for the reasons you do makes sense to me.KlangFool wrote: ↑Mon Nov 23, 2020 9:03 pm dml130,
I am buying gold and silver coins as hyperinflation insurance. In hyperinflation, the gold/silver will go up to 10X to 30X. At that rate, it is easier to buy stuff with 1 oz of silver versus 1/10 oz of gold. Silver = poor folk's gold
1 oz silver is around $25 now. 10X = $250. 30X = $750.
1/10 oz of gold is around $200. 10X = $2,000. 30X = $6,000.
I keep both.
KlangFool
Re: Gold continues to soar!
There is no guarantee that Gold will do anything predictable like being inflation hedge or stagflation hedge or hyperinflation hedge. It is just a highly speculative metal and if you look closely at it as a investment you essentially get a zero coupon perpetual bond. Also I think it has the risk of obsolescence as a better standard has been developed (Bitcoin) in which the risk of purity concerns are gone and ability to move it from one country to another country is not difficult as compared to Gold. The Old Generations might love it but I find it to be trash locally where you can get 7% interest rates risk free. I also looked at data for my country and adding Gold to a traditional stock and bonds portfolio has been garbage for the past 23 years:https://freefincal.com/will-including-g ... olio-help/
Still I do keep some tiny percentage (1%) physically in case a black swan event happens but I don't know whether it can actually work as it did not keep up with hyper-inflation if you were a Brazilian investor between 1980 and 2000.
Still I do keep some tiny percentage (1%) physically in case a black swan event happens but I don't know whether it can actually work as it did not keep up with hyper-inflation if you were a Brazilian investor between 1980 and 2000.
Land/Real Estate:89.4% (Land/RE is Inheritance which will be recieved in 10-20 years) Equities:7.6% Fixed Income:1.7% Gold:0.8% Cryptocurrency:0.5%
Re: Gold continues to soar!
This is an interesting discussion.
https://twitter.com/SantiagoAuFund/stat ... 7414358018
https://twitter.com/SantiagoAuFund/stat ... 7414358018
Re: Gold continues to soar!
Given all the posts on gold soaring, shouldn't it be above its summer 2011 spot by now? Inflation since then has been 16% cumulative.
Last edited by z3r0c00l on Tue Nov 24, 2020 10:03 am, edited 2 times in total.
70% Global Stocks / 30% Bonds
- CyclingDuo
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Re: Gold continues to soar!
Hopefully to dump it...
"Save like a pessimist, invest like an optimist." - Morgan Housel |
"Pick a bushel, save a peck!" - Grandpa
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Re: Gold continues to soar!
No, I bought. Not a grand amount, mind you, just a pinch, wholly within the confines of funny money. I did not buy it because I expect gold to go up. I bought it as a (small) hedge. Like insurance, money you hope, and expect, to lose.
A hedge against what? Something close to something Mister Whiz mentioned above, zero or negative interest rates. Actually, that is not quite accurate. More like an increase in the chasm between interest rates and inflation.
The UK is eyeing negative rates, but their inflation is 0.7%, so even if they went negative 0.25%, their "chasm" would still be smaller than the US's, because our inflation is 1.2%. (I understand there are different ways to measure inflation, but let's not get too precious about this.)
I am hedging against something that would be quite unexpected, a chasm significantly greater than 2%. It is the same reason I own TIPS. I suppose I should mention the great underlying motivator in all this is a large cash position I have. Frankly, if there was a guarantee that the chasm would not greatly exceed 2%, I would be 100% cash.
Re: Gold continues to soar!
Bitcoin's energy consumption equals Switzerland
Amateur Self-Taught Senior Macro Strategist
- willthrill81
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Re: Gold continues to soar!
The market is apparently not yet convinced of the accuracy of this statement. The market value for all Bitcoin is about $359 billion, while the market value for all the world's gold is about $7.5 trillion, nearly 21 times higher.
The Sensible Steward
Re: Gold continues to soar!
A good portion of gold's rise over the 12-18 months was due to the political issues and the pandemic. W/o going down the wrong path here, the political issues seem to have calmed down for now, and with multiple vaccines getting closer to being approved, gold is dropping.
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If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
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Re: Gold continues to soar!
Above I posted an article giving four reasons for the weakening of gold prices, and today gold is being hit with three of them, the exception being the weakening of the US dollar.rich126 wrote: ↑Tue Nov 24, 2020 10:11 am A good portion of gold's rise over the 12-18 months was due to the political issues and the pandemic. W/o going down the wrong path here, the political issues seem to have calmed down for now, and with multiple vaccines getting closer to being approved, gold is dropping.
Re: Gold continues to soar!
sorry I missed that. (Glancing at the site while at work.)Robot Monster wrote: ↑Tue Nov 24, 2020 10:29 amAbove I posted an article giving four reasons for the weakening of gold prices, and today gold is being hit with three of them, the exception being the weakening of the US dollar.rich126 wrote: ↑Tue Nov 24, 2020 10:11 am A good portion of gold's rise over the 12-18 months was due to the political issues and the pandemic. W/o going down the wrong path here, the political issues seem to have calmed down for now, and with multiple vaccines getting closer to being approved, gold is dropping.
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If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
Re: Gold continues to soar!
Average price of gold since 1971, inflation-adjusted, is around $1,200. Not very scientific, but assume a global economic rebound next year, gold might drop to $1,400. I just think gold is richly priced any way you look at it. The 2020 high is an almost perfect triple top with 2011 & 1980.
https://www.macrotrends.net/1333/histor ... year-chart
https://www.macrotrends.net/1333/histor ... year-chart
Amateur Self-Taught Senior Macro Strategist