Gold

[ValueNZ]

Ok, no worries.

Explain how you invest in gold when it has no cash flow nor ever will.

All you depend on is selling it to someone else.

This is the exact definition of speculation.

Look up the definition of investing.

Benjamin Grahams definition of investing is best, "An investment operation is one which, on thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

IMO gold doesn't promise safety of principle nor a satisfactory return being an unproductive asset.

[ValueNZ]

I trade gold quite regularly. Currently I have a small short position that I only entered yesterday after it broke through 2000.
I trade ETFS.

I specialized mostly in gold trading when in banking and saw all sorts of reasons driving the gold price, supply & demand etc.
A significant amount of activity is driven by gold miners, cultural demand, jewelry, electronics, investment I.e put in a vault or ETF or futures investing and trading.
The evolution of ETFs was a big driver of gold appreciation in the last 15 years or so, but so to the cost of production driven by costs but also due to the average grade being mined has reduced considerably.

All the demand seems to be driven by speculation, how do you reasonably predict that?

[ValueNZ]

Gold has a lease rate I.e an interest rate that fluctuates with supply & demand.
It's only really wholesale quantities that can take advantage of it & typically its quite low but I have seen gold lease rates spike to double digits and I think from memory once I remember it spiking to around 40 - 50% very briefly.

The interest rate doesn't normally drive investment but does help offset the holding cost, I.e the USD interest cost.

Interesting... For what purpose is the gold borrowed?

[SailorRob]

Interesting... For what purpose is the gold borrowed?

Speculation!

What makes investing and finance interesting is that an 18 year old can be so far ahead of a seasoned so called professional. The opportunity is there for anyone and without the Daytras it would be very hard work.

[Daytr]

Interesting... For what purpose is the gold borrowed?

Mostly for shorting I.e ETFs or futures, but also producer hedging, which back when I was trading gold was a big part of the market and the global hedge book was over 100 million ounces or 3,300 tons. It's pretty insignificant now as mark to market or IFRIS accounting was introduced and meant the changes in value of the hedgebook had to be reported. Also as gold for 20 years was pretty much going down in price until it got below the cost of production at around $220/ounce, so it made sense for a producer to hedge their future production especially when they could get 2 - 5% contango compounded.

Since then, in the last 20 years, gold has gone up about 8 fold and shareholders of gold producers want exposure to the gold price so hedging has become unpopular unless it's there to protect project debt, probably mandated by their lending bank.

[Daytr]

Speculation!

What makes investing and finance interesting is that an 18 year old can be so far ahead of a seasoned so called professional. The opportunity is there for anyone and without the Daytras it would be very hard work.

Keep it up chump.
The chip on your shoulder is only offset by the eyepatch.
Quite ridiculous.

You keep telling us of these stocks you are reinvesting in as one day they will be worth much more. Markel for example. So yes investing in gold is the same as investing in shares or an index, looking for price appreciation.
I.e pretty much all investing barring pure yield plays are speculation.

Trading is definitely entirely speculation.

But more the point is, who gives a flying ....

[SailorRob]

Keep it up chump.
The chip on your shoulder is only offset by the eyepatch.
Quite ridiculous.

You keep telling us of these stocks you are reinvesting in as one day they will be worth much more. Markel for example. So yes investing in gold is the same as investing in shares or an index, looking for price appreciation.
I.e pretty much all investing barring pure yield plays are speculation.

Trading is definitely entirely speculation.

But more the point is, who gives a flying ....

As usual totally incorrect.

The companies I am interested in will only be worth more as they will produce more goods and services more efficiently, with less capital.

As the amount of cash they throw off rises, their capitalised value will increase, probably more than the proportional amount of cash i.e. multiples will expand from trough.

Look to ValueNZ's explanation of investing.

What were your returns on the capital provided to you by the bank over the entire time you were speculating in Gold for them?

What have your returns been over the last 8 years across your net worth, not just the 15% you've done on your highest performing strategy.

[Daytr]

As usual totally incorrect.

The companies I am interested in will only be worth more as they will produce more goods and services more efficiently, with less capital.

As the amount of cash they throw off rises, their capitalised value will increase, probably more than the proportional amount of cash i.e. multiples will expand from trough.

Look to ValueNZ's explanation of investing.

What were your returns on the capital provided to you by the bank over the entire time you were speculating in Gold for them?

What have your returns been over the last 8 years across your net worth, not just the 15% you've done on your highest performing strategy.

He said speculating about the future of the companies he has invested in.
This getting boring as usual.

Were you an accountant in a previous life by chance?
I have paint drying that will be more interesting than this.

See ya bud. My time is far more valuable than these ridiculous back & forth we get into.
But by all means keep posting to yourself.

[ValueNZ]

He said speculating about the future of the companies he has invested in.
This getting boring as usual.

Were you an accountant in a previous life by chance?
I have paint drying that will be more interesting than this.

See ya bud. My time is far more valuable than these ridiculous back & forth we get into.
But by all means keep posting to yourself.

When did I say that I was speculating? You do need to make some sort of prediction about the microeconomic environment under which a company will operating in, but given a sufficient margin of safety between the share price and intrinsic value you are essentially guaranteed safety of principle and a satisfactory return.

You may find this sort of stuff boring, but at the end of the day it's the only real proven way of generating returns exceeding that of the SP500 over the long term. What SailorRob wrote makes total sense, and is definitely not boring IMO as money excites me.

If you're looking for a thrill try 0DTE option trading, if you're looking to make bucketloads of cash in the long run then listen to what SailorRob has to say.

[Daytr]

When did I say that I was speculating? You do need to make some sort of prediction about the microeconomic environment under which a company will operating in, but given a sufficient margin of safety between the share price and intrinsic value you are essentially guaranteed safety of principle and a satisfactory return.

You may find this sort of stuff boring, but at the end of the day it's the only real proven way of generating returns exceeding that of the SP500 over the long term. What SailorRob wrote makes total sense, and is definitely not boring IMO as money excites me.

If you're looking for a thrill try 0DTE option trading, if you're looking to make bucketloads of cash in the long run then listen to what SailorRob has to say.

I wasn't replying to you. So your first question is erroneous. However you are speculating on the future returns of a company whether you like the term or not. I really don't care.

And yes you are right I find SailorRob's comments are a bore.