Gold

[Skol]

Why is that Skol. What goes up for 20 years surely could go down for 20?

Could do but I doubt it.
When gold goes up the scams increase exponentially, more than any other investment, and you can bet there's plenty under way right now.
Gold is up ostensibly because paranoid Germans and Austrians who were never alive during the Weimar Republic are buying it. Apparently they just can't get over it. It's about as much sense as harking back to the great railroad and electricity company crashes of the 19th century.

Gold is a risky punt and when the tide turns it could be a flood.
Like I've said before you can't eat it, no dividend, costs to store it, and very risky to store at home.

[elZorro]

Could do but I doubt it.
When gold goes up the scams increase exponentially, more than any other investment, and you can bet there's plenty under way right now.
Gold is up ostensibly because paranoid Germans and Austrians who were never alive during the Weimar Republic are buying it. Apparently they just can't get over it. It's about as much sense as harking back to the great railroad and electricity company crashes of the 19th century.

Gold is a risky punt and when the tide turns it could be a flood.
Like I've said before you can't eat it, no dividend, costs to store it, and very risky to store at home.

The chart from Phaedrus' post shows with a very high probability that overall, shares are a bad punt relative to gold price/oz for the next period of time. There is no escaping that conclusion Skol. You're also being a bit pessimistic about the gold opportunities that are out there.

Instead of buying raw gold, which I agree has some issues when it comes to dividends etc, using leverage with gold mining companies is a very good idea in these times IMHO. They are storing the gold for you, will pay dividends, their share prices will proportionally do better than gold price increases (yes, there is the opposite effect to take into account).

[CAM]

It's about as much sense as harking back to the great railroad and electricity company crashes of the 19th century.

Nevermind those....whats the price of Tulip bulbs doing??? [:P]

[elZorro]

I hesitate to add fuel to the gold debate and view "cut and paste" postings as evidence of intellectual bankruptcy - but take a look at this chart from chartoftheday.com :-



For the last 10 years gold has been a better investment than US stocks. Pre 2000, stocks were better than gold. Interesting chart eh?

Heh, heh Phaedrus, I like both the graph and the turn of phrase. Except it looks like many of us are intellectually bankrupt. At least we're doing some reading and trying to understand this economy we're living in. Maybe there is no economy, has anyone ever seen it?

[Skol]

Instead of buying raw gold, which I agree has some issues when it comes to dividends etc, using leverage with gold mining companies is a very good idea in these times IMHO. They are storing the gold for you, will pay dividends, their share prices will proportionally do better than gold price increases (yes, there is the opposite effect to take into account).

I've yet to see it . Only the very brave or very stupid would leverage gold shares. Someone like the punter they call 'Steel Balls'.
Have a look at a few gold charts. Perhaps we could start with tricha's 'insurance' as he calls it FML. Enough to make a grown man cry.
Or NAV if you like, the one that's going through the roof 'any day now'.
Or how about NCM & RSG?
These are gold's heydays, where's the payoff?

Perhaps the shares know something you don't.
Shares try to look into the future.

[Kees]

12 for 10 bucks at the market

[Skol]

Why is that Skol. What goes up for 20 years surely could go down for 20?

There are only 2 periods since 1900 when the DJIA has declined or stagnated for an extended period.
Following the great crash of 1929 the DJIA never regained that level until 1954.
The other was 1966 until 1982, so I'll put my money on the DJIA outperforming gold this decade.

[elZorro]

I've yet to see it . Only the very brave or very stupid would leverage gold shares. Someone like the punter they call 'Steel Balls'.
Have a look at a few gold charts. Perhaps we could start with tricha's 'insurance' as he calls it FML. Enough to make a grown man cry.
Or NAV if you like, the one that's going through the roof 'any day now'.
Or how about NCM?
These are gold's heydays, where's the payoff?

Perhaps the shares know something you don't.
Shares try to look into the future.

OK Skol, I had a look, two of those miners can't be producing much, and NCM must be overvalued. That doesn't change the argument, I'm not talking about leveraging gold shares as you imply. The shares are naturally leveraged. Once a miner has established the equipment and has a large hard-rock site to work with, say, the recovery price per ounce is fairly fixed. So any increase in POG above their breakeven is pure profit.

They can choose to mothball a site if the POG drops too far, but the money is still sitting there in the ground, usually held safe by their permit.

I could try arguing the point more - and I see others have tried - but I'm more interested in what happened with OGC. Why was it so undervalued, will it keep improving, and what will the POG do in the near future. I'm sure there will be plenty of good-sized miners that will show a good performance over the last few months too. Have your shares done better than OGC over the last year?

[Skol]

Have your shares done better than OGC over the last year?

Something of a moot point, not apples with apples since I don't own gold shares. I did own RSG a few years back but glad I don't now.
I bought VBA for 20c and sold them for loads more. While everybody's suffering at the moment, including me, the goldbug share fans should be buying new cars and having champagne breakfasts.

Why aren't they?

[elZorro]

Something of a moot point, not apples with apples since I don't own gold shares. I did own RSG a few years back but glad I don't now.
I bought VBA for 20c and sold them for loads more. While everybody's suffering at the moment, including me, the goldbug share fans should be buying new cars and having champagne breakfasts.

Why aren't they?

Because I think we all bought/sold too quickly, were happy to have a 10% or 20% gain, when the underlying stats were so much better, if you assumed the POG would keep increasing. It was also important to find an undervalued miner with good production, greenfields explorers are more exciting but riskier.

I have found that it's better to spend the time analysing a well-established company than a start-up.