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Sanya12364 Posts
On January 06 2011 10:34 purecarnagge wrote:
Gold is worth nothing. Its not used to support the dollar or other currency. If government fails gold will just be another mineral.
Do you know what jewelery might be made out of?
Do you know what exchange value means? Do you even understand what money means? If not then why do you own any dollars or any other currency? By the same logic, you can't do anything intrinsically useful with paper currency. Its only virtue is to trade it for other stuff. And the dollar? If the government falls, it's just another discolored piece of paper.
The characteristics of gold that give it good exchange value is that it's rare and it's malleable and it's coveted for jewelry. In other words, it has intrinsic value, scarcity, and divisibility.
On January 06 2011 10:34 purecarnagge wrote:
You will want generators, guns, ammo, and food. You will not want "gold". Again, see oil bubble 2 years ago? Yeah how do you think all those people liked there get rich scheme when it crashed and left them holding long term or taking the loss and moving on.
Gold is a horrible investment. It's speculating in precious metals, and you're going to lose out when you play with gold.
The only thing I can take away from this statement is you think gold is overvalued right now. Bringing up oil's peak price - are you calling a market top in gold? I'll mark your words if you are. Why don't you short gold? BTW hindsight analysis like that is useless especially when you cherry pick a market top. Why not pick some other random time like year 2001.
Gold as an investment? Mainly it's wealth preservation vehicle since an investor literally puts no work into it after buying it. As far as I know Gold hasn't been any worse than the DJI since 1930. Hell, the Dow has underperformed since it was 10-to-1 in 1930 and now it's 8-to-1.
On January 06 2011 10:34 purecarnagge wrote:
Real estate is easy to do.
Real estate is hard work and takes expertise. If you can't recognize the value and the work you are putting into real estate then you are undervaluing yourself. Congratulations for thinking that it's easy or enjoying it.
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On January 06 2011 10:34 purecarnagge wrote:
Gold is worth nothing. Its not used to support the dollar or other currency. If government fails gold will just be another mineral.
5000 years of human history says you are WRONG.
Gold has survived numerous government collapses and retains value very well.
Anyone see the UK Manufacturing input prices? Highest recorded in the 19 years since records began.Metals are rising because of real inflation.
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On January 06 2011 10:34 purecarnagge wrote:
Gold is worth nothing. Its not used to support the dollar or other currency. If government fails gold will just be another mineral. You will want generators, guns, ammo, and food. You will not want "gold". Again, see oil bubble 2 years ago? Yeah how do you think all those people liked there get rich scheme when it crashed and left them holding long term or taking the loss and moving on.
Gold is a horrible investment. It's speculating in precious metals, and you're going to lose out when you play with gold.
Gold has a 70-year track record of 4.2% returns. That's about the rate of inflation. It's awful. All the rate of return that gold has made has been in the last seven years, and even then it will go up and down and up and down. It'svery volatile.
You have no idea what you are talking about and it shows. You would suppose that professional investors and traders who deal in gold and precious metals would have already thought of the points you raised, dont you think? Do not think you are that smart.
Gold's value is determined by the way it is perceived. Perception IS reality in the markets. Historically gold has played a certain role and it's a relatively safe bet to assume it will still do so.
Gold has been is been in a bull run for at least a decade, btw. And the oil bubble gave me half of a year's rent, thank you very much. It doesnt take rocket science to ride bubbles, just strong discipline.
Real estate is easy to do.
In real estate rental, if you manage it well and you buy it right, which can be a couple of very big “ifs”, your rate of return should be well in excess of what you’d make on a mutual fund. However, you’ve also got your hassle and effort involved. If you average 12% on a mutual fund, you should average 15% to 25% on a rental, all things included.
To get a good deal in real estate, you have to have patience and know the market. You can find good deals through realtors. When I’m buying investment property, I never pay more than 80 cents on the dollar for it. If I’m going to, I just don’t buy it because I’m looking for a deal. In real estate, money is made at the buy.
Hassle factor = welcome to becoming a landlord.
so for the record. Yes, if I had a bunch of money right now I would be pouring money into the market looking for quality investment properties to rent out.
I happen to be a real estate investor myself (I own 4 properties outright plus a decent amount of agricultural land, in 2 countries) and I call bullshit. First of all real estate is very hard work in terms of building. Second of all, investing in real estate without a deep knowledge of finance is reckless, as many builders are finding out in many countries right now, and nowadays I can assure you that investing in real estate is pretty much asking for trouble considering how prices are doing and how low interest rates are, coupled with a struggling economy and crazy amounts of debt.
Third of all, please give me a source for the whole mutual fund VS rental yield. Please 
The only thing I agree on is that in real estate, money is made at the buy - which is obvious since it applies to every type of investment really.
The time to buy on the stock market was when the housing mess started and all the financial stocks were beaten down. Some still are down. The market is up about 10-12% for the year if I remember correctly. My 401k did very well.
Its okay its obvious you know little about finances. A person who is good with money has patience and isn't following the market, because they are ahead of it. This is real estate or traditional investment options stocks/mutual funds.
Ok first of all undestand that I trade for a living. Also understand my portfolio is worth about 800k USD so it is a prety serious thing for me and has been for years.
Trading and investing is all about following the market, and the news. I have no idea how the hell you can claim it is not. This has nothing to do with patience, and everything to do with understanding the impact of events and news on what you trade and reacting accordingly in order not to miss opportunities or get caught offguard. To suggest that you can be "ahead of the market" is by definition silly and nonsense and I challenge you to find any educated trader/investor who will trust their money into the hands of someone who does not spend at least a couple of hours everyday following what's happening in the financial world.
IF your looking to invest, Growth Mutual funds are the way to go. There are many that have averaged 12% or higher. They are hands off for the most part. You typically need 1k to start, but to get into the good or more reasonable ones you will want anywhere from 2500 to 5k. That would be the lowest amount to really start with. Keep in mind you don't want to be cash poor because you "invested it all".
Disagree with this too. If you wanna invest, right now...just dont unless you know what you are doing. Things could go really bad any day (as they did in recent years).
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Just because you can make money off a inflated bubble doesn't mean you can't lose money as well. Everything is good until the bubble burst. I never once stated you couldn't make money. All I said is that it is inflated and provided a long term track record as to why.
Buying paid for real estate is much easier than mutual funds. no debt, no loans. My last flip was about 110k. Its now rented to a contracted agency that puts assisted living young adults in the properties. It makes 1500 a month. When the repairs were completed the house appraised for 155k. It was good. Its paid for. I was told by a realtor that I could sell this for 150k and walk away with about 136k. That's 26k that I would have netted with realtor fee's etc in 3 weeks.
I don't know where you took investment properties, and came back with builder. Builder is the last person you would want to be right now next to developer
Your thinking developer. There isn't money in that right now. Your money is buying a house with cash, flipping it or renting it out. Or buying apartment or condo type buildings. Your buying properties for .75 to .80 on the dollar now. There is no reason to pay more. The banks don't want them.
Maybe ahead of the market is the wrong definition. But if your doing what everyone else is doing then your just following the market and that won't get you very far except down and out.
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Cayman Islands24199 Posts
a thing about gold is that there seems to be a huge jewelry craze in china right now, over and beyond the increase in gold value. traditional bling bling values still has a lot of purchase over there. but of course, it's a bit hard to enter that market. :/
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Buy property/land - won't be made any more of it.
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The US currency has had a tumultuous journey in the last few years and it will continue to depreciate against other fiat based currency in the months to come. On the other hand Gold and Silvers has had a great run, especially in the last year.
The Federal Reserve has already planned for QE3 and Congress will likely raise our debt ceiling. This will likely keep our failed fiscal policy going until the end of this year.
Gold and Silvers are a great hedge against the fiat currency during this period of wealth transfer. More millionaires are made during times like this than any other period in history, e.g. The Great Depression. If I remembered correctly the Rothschild family started in the gold smith profession before they started lending money to the kings and queens of Europe.
If you take the price of gold and silver in their 1980s high and adjust it for inflation, I believe that gold should be around $2,500 an ounce and silver should be at around $70 an ounce. However during that time, only a few countries may have the privilege of buying Gold and Silvers. Last year alone, China has increased their import of Gold by 500%.
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On January 07 2011 02:39 purecarnagge wrote:
Just because you can make money off a inflated bubble doesn't mean you can't lose money as well. Everything is good until the bubble burst. I never once stated you couldn't make money. All I said is that it is inflated and provided a long term track record as to why.
The thing you are missing here is that there is no way you can tell it's a bubble or "inflated". There are strong fundamentals for gold to be this high and there are pretty strong fundamentals for gold to go up. I am not advocating buying gold now and I am not saying not to sell it, but at the same time realize that it is hard to call a bubble an increase in price that has definite and quite clear reasons such as the one in gold.
Also, what is long term? 10 years? 20? There is no clear definition of "long term". Certainly it is silly to just look at how something performed since we have historical data, since the whole point of trading and investing is to take advantage of trends and new situations. You cannot really buy anything and be sure it's gonna do well over your lifespan, you need to be flexible no?
Buying paid for real estate is much easier than mutual funds. no debt, no loans. My last flip was about 110k. Its now rented to a contracted agency that puts assisted living young adults in the properties. It makes 1500 a month. When the repairs were completed the house appraised for 155k. It was good. Its paid for. I was told by a realtor that I could sell this for 150k and walk away with about 136k. That's 26k that I would have netted with realtor fee's etc in 3 weeks.
You still havent given a source for the figures you have stated in your previous post. I do not really trust realtors as it's in their interest to sell and they tend to inflate figures. Way better to deal directly with builders. Appraisals are also increasingly worthless, the market price is often way lower than you expect it to be unfortunately. Also keep in mind that investing in property is not a debt free venture for most people - the average person WILL require a mortgage and this is really not the time to look for one.
I don't know where you took investment properties, and came back with builder. Builder is the last person you would want to be right now next to developer
Eheh as a matter of fact I got a couple of really good deals as builders are having big trouble finding work and therefore it's way easier to negotiate rates down.
Your thinking developer. There isn't money in that right now. Your money is buying a house with cash, flipping it or renting it out. Or buying apartment or condo type buildings. Your buying properties for .75 to .80 on the dollar now. There is no reason to pay more. The banks don't want them.
That highly depends on the location of the house. Different location, different market and different rates. I mean you see hugely different markets in places that are not even 5km apart, so I cannot tell what a good deal would be in your area nor you can tell what would be good in mine. However, as a general rule of thumb, I find that right now it is silly to invest into property into most areas. The risk is way too big and there are good alternatives in terms of financial insturments that are way safer in my view.
Maybe ahead of the market is the wrong definition. But if your doing what everyone else is doing then your just following the market and that won't get you very far except down and out.
My philosophy is to identify a bull run and ride it, then get out quickly. In other words, I AM doing what every smart investor is doing and taking advantage of the less smart ones (there seem to be plenty for some reason). Keeping daily track of prices (coupled with some intraday trading sometimes and with a small part of my portfolio obviously) and following a strong discipline with clear rules allows me to get out when things look like they might be turning bad. It's how I was taught to work and, frankly, it does indeed work if you dont become emotional.
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my philosophy is mutual funds that average about 12%, then buy paid for real estate, at about .80 on the dollar. This creates a regular monthly revenue, and appreciates in value over the long term.
Your strategy is completely different and has more risk to it.
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Sanya12364 Posts
On January 07 2011 04:57 purecarnagge wrote:
my philosophy is mutual funds that average about 12%, then buy paid for real estate, at about .80 on the dollar. This creates a regular monthly revenue, and appreciates in value over the long term.
Your strategy is completely different and has more risk to it.
You know what? Stick to what you know, which is Real Estate. It's a good thing.
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Damn this thread, I feel guilty letting my savings devalue on the bank  (interest in holland is about 2% which is less than inflation..) But I'm too emotional for stocks, I would check them every hour every day and feeling bad when it was down even a little
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The institutional framework has always dictate that we should work hard and save our earnings. This idealism couldn't be any more wrong. A dollar today isn't neccessary a dollar tomorrow, the time value of money should always be in consideration.
The reason that we see the price of Gold and Silvers rising doesn't truly correlate with the demand for the physical products but rather from the ETFs that represents the underlying commodities.
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I'm sitting on a 29.11% return right now. Not bad, bought it like a year ago...
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Congratulations... Like I've said before more millionaires will be made during this period of Wealth Transfer than any other moments in history.
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On January 07 2011 05:32 AZN)Boy wrote:
The institutional framework has always dictate that we should work hard and save our earnings. This idealism couldn't be any more wrong. A dollar today isn't neccessary a dollar tomorrow, the time value of money should always be in consideration.
The reason that we see the price of Gold and Silvers rising doesn't truly correlate with the demand for the physical products but rather from the ETFs that represents the underlying commodities.
On the contrary, the more money you have, the next dollar you gain is less valuable to you. For somebody making thirty thousand a year, another thirty thousand a year is a huge windfall. For somebody who is already making six digits, another thirty thousand is still nice, but not as important. Let's not forget that investments are not guaranteed returns (As I'm sure many people found out the hard way during the recent economic crisis) - there are many people who would be better off right now if they just saved their money instead of "investing" it in things like. The fact is that savings are a good thing because shit happens - maybe you lose your job, maybe you get injured, maybe the economy takes a crash. It's not "idealism", it's being realistic.
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On January 07 2011 07:58 Underwhelmed wrote:
On the contrary, the more money you have, the next dollar you gain is less valuable to you. For somebody making thirty thousand a year, another thirty thousand a year is a huge windfall. For somebody who is already making six digits, another thirty thousand is still nice, but not as important. Let's not forget that investments are not guaranteed returns (As I'm sure many people found out the hard way during the recent economic crisis) - there are many people who would be better off right now if they just saved their money instead of "investing" it in things like. The fact is that savings are a good thing because shit happens - maybe you lose your job, maybe you get injured, maybe the economy takes a crash. It's not "idealism", it's being realistic.
Savings are risky for one reason. Super inflation. When/if that happens savings are worth nothing in a matter of days while other types of investments will often retain value in other countries (unless the government removes various types of savings to save itself). I myself save my money and let them gather dust on an account that is a tad under inflation, I will need that money next year so I can't risk investing them or tying them up.
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On January 07 2011 04:57 purecarnagge wrote:
my philosophy is mutual funds that average about 12%, then buy paid for real estate, at about .80 on the dollar. This creates a regular monthly revenue, and appreciates in value over the long term.
Your strategy is completely different and has more risk to it.
Were those mutual funds still pulling 12% in 2008/2009?
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This thread is kinda funny its like a battle between people who know zilch and just spew random facts and like, two people who have a clue
FWIW i'm hoping to work on a metals desk in the near future.
Like all things, if you are expecting to make some fantastic crazy return then... look elsewhere. Gold is bullish. It's not bubbling right now, the returns on it are nowhere near a bubble, and it doesn't fit the conditions of a bubble
Its not like people are massively overleveraging themselves on gold, nor is it useless because it is shiny, hard, pretty and rare, and for these reasons it will ALWAYS have a base price. You can be assured if the price of gold drops low enough, people will buy it because they like jewelery.
Its the same way tulips still have a value of a few dollars, because its a pretty flower that people will put in their vases
Gold is still one of the best ways of hedging yourself, and fantastically safe, and this is reflected by its overall medium returns.
If it appreciates at the rate of inflation, thats an absolutely fantastic investment, considering the current interest rate.
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On January 07 2011 09:17 BrTarolg wrote:
This thread is kinda funny its like a battle between people who know zilch and just spew random facts and like, two zero people who have a clue
FWIW i'm hoping to work on a metals desk in the near future.
Fixed that first sentence for you; I left one post in this thread with the hopes that it would die. Apparently I dreamt a bit too big there. I've actually contemplated starting a NYC TL-finance meet and greet thread... maybe that needs to happen.
On topic: Gold is, and has historically been, a great tail risk protector with regards to both inflation AND deflation. Given the state of the global economy, and more importantly the potential for relatively large monetary policy shifts in both developed and emerging markets gold is a great hedge with scalable downside risk. Everything else, including increased demand for jewelry, is just gravy and almost negligible.
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Without a shadow of a doubt, the US dollar will relieve it's current position as the world's reserve currency. That will be a very dark and depressing day for many of us here in the United States. Like I've stated before the current Gold and Silver price is nowhere near their 1980s high if adjusted for inflation.
The real bargain here is silver, at just under 30 dollars an ounce. It's practically a steal; especially with JP Morgan suppressing it's true market value. Unlike gold, silver is an industrial product that is in our everday items such as cars, cell phones, and numerous electronics.
Emerging markets should also be taken into consideration. The Chinese RMB will no doubt replace the dollar as the world's reserve currency in the near future. However I predict that they will have many challenges ahead such as political reforms and human rights issue. India will no doubt play an important role in technological advances. However, their primary concern should be infrastructure such as roads, telecommunications, ect...
Understanding these problems should help you facilitate in the companies or funds that will prosper in the emerging markets. Also note that the things we take for granted in our everyday lives such as clean water, cheap energy, abundant supplies of food. These things may not stay that way forever.
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EPT
