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#1 Rule of investing - Buy when blood is running through wall street.
#2 Rule of investing - Sell when things look too good to be true.
Currently I am stock piling 50% of my portfolio into the financial sectors like bank stocks. The mortgage crisis has pretty much hit bottom and they will recover. Hold for 3-5 years and you will at least double your money if not more. Smart investors are already moving OUT of bonds and i am willing to bet gold and other metals are next. Besides this is the 3rd year of the election year, and if I recall the average return from stocks on the the 3rd year is around 10-14%. In fact i think only once since 1920's has stocks actually lost money on the 3rd year of the presidency.
http://www.nytimes.com/2010/12/11/business/economy/11charts.html
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Apparently I'm supposed to buy gold only when gold is in a bubble, and I'm supposed to do research into stocks which I think will go up, but under no circumstances is it legitimate to think that gold will go up, because nobody knows.
Isn't the point of doing any kind of research to identify those items which other people are underbuying and underpricing?
What's the point of investing, if you are not prepared to go against some trend or another?
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You should of bought gold 2 years ago when the market crashed... now as things are starting to settle, people will sell off their stocks in gold and invest in other things. the bubble isn't going to grown indefinitely, and I'm going to say if you haven't already invested you have already missed the train.
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On December 13 2010 06:37 MoltkeWarding wrote:
Apparently I'm supposed to buy gold only when gold is in a bubble, and I'm supposed to do research into stocks which I think will go up, but under no circumstances is it legitimate to think that gold will go up, because nobody knows.
Isn't the point of doing any kind of research to identify those items which other people are underbuying and underpricing?
What's the point of investing, if you are not prepared to go against some trend or another?
the point of investing isn't to guess against public opinion and hope you got it right and you got it right at the right time. it's to ride the wave and get off when you think the current's getting too fast
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This doesn't seem very legitimate to me. Talk to a financial adviser.
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Australia3818 Posts
On December 12 2010 12:57 Tufas wrote:
They are planning on putting one in a city/town where I used to coach rich russians on how to skii while drunk.
Zell am See in Austria ... beautiful with a lake and mountains ...
Zell am See is awesome. I've been snowboarding there a fair few times!
As for the gold investment...I've always thought about it...the main issue now is the fact I don't have that spare 20k lying around...
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On December 13 2010 04:10 Almin wrote:Show nested quote +On December 13 2010 04:05 Simplistik wrote:On December 13 2010 03:55 Hatsu wrote:On December 13 2010 03:48 sikyon wrote:
I actually really hate the fact that gold is traded as a precious metal commodity since I'm trying to use it right now to synthesize some gold-coated nanoparticles and it's mad expensive. If it makes you feel better, other metals such as iridium skyrocketed even more, it's not just precious metals. Unlike gold, there's actually a reason for the iridium price increase! Over the last few years new applications for iridium have been coming around. Some of those applications (like touch screens and LEDs) are mass markets. Iridium is pretty scarce so the price goes up! Gold on the other hand... Not true, plenty has been found in Canada, South America, and in Afghanistan. Canada and SA is easy to mine, but Afghanistan...GL lol, point is, it's not that rare if Canadians are mining it at a massive amount.
Could you please tell me what you mean by "plenty"? As far as I know nobody mines for Iridium anywhere. People mine for Platinum in South Africa; Iridium is a by-product. Many Nickel and Copper deposits also yield some Iridium. In Canada there might have been some Palladium mining which would normally also yield some Iridium.
The annual production of Iridium last year was something like 2600 kg. The concentration in many deposits is only a few parts per billion. Allow me to repeat myself: Nobody mines for Iridium.
If you would like more information regarding Iridium (and other Platinum Group Metals) check out:
http://platinum.matthey.com/publications/
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On December 13 2010 06:30 Squisha wrote:
wouldn't it be even more clever to invest in some big gold mine companies down in mexico for example, because those are the ones who will make the most profit out of a rising gold price
Investing in mining companies, as already pointed out, is a great play on gold. You would rather go for smaller ones though as they have higher growth potential.
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Let us get one thing straight: gold is not an investment. It is speculation.
When you put $1000 into gold, you are not investing in gold. To invest in gold, you'd have to put $1000 into a gold mine. What you actually do is you just buy $1000 worth of gold at current prices. The only way you make a return on that is if gold goes up in value, thus its speculation on the value of gold.
Second point: very few people have ever beat the market by speculating. If you aren't a huge expert on the uses of gold, the demand for gold, the supply, and so on and so forth, your expected value of "investing" in gold is 0% return.
It is, quite simply, a terrible idea unless you are hedging against inflation, and even then it is one of the worse ways of doing that.
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First things first, never ask for investment advice from a site like TL. 95% of what's been said thus far in this thread is either incorrect, incoherent or contains blatant omissions (whether intentional or not) of relevant facts. ETFs (what most people would be using to go long gold) are not a perfect tracker of the underlying. Furthermore, there are massive contango arbitrage trades currently in place for gold, among other commodities, and volatility's being fed into the FX scene. Why gamble when you have no idea what you're doing?
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On December 12 2010 18:49 SnK-Arcbound wrote:Show nested quote +On December 12 2010 18:42 Two_DoWn wrote:
No. Do not invest in anything with a high price already. Ever. The only way the price will go is down, and you will lose a lot of money. Trust me, im a 4th year econ student in university.
The point in investing is to make money- so you buy low and sell high. By buying something when the price is already high, you are just asking the price to fall and to lose money. I'm sure Ben Bernanke has a lot of scholastic achievements, yet he's been wrong consistently for the past 10 years. Appealing to authority is a terrible way to make an argument. As a 4th year econ student you don't even seem to understand that making money has very little to do with buying low and selling high, other than trying to turn over stocks to make a profit. That isn't an investment.
It is an investment. You are spending money in order to make a return. If you say that buying gold isnt an investment, you clearly have no idea what you are talking about.
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As a finance major, reading through this thread makes me rage.
If you want to invest but have no financial or economic knowledge, PLEASE find a broker. There's much more than just buy low sell high, they have to analyze your current assets, your goals, your risk threshold, different alternatives you have, including futures, forwards, options, their regulation, and legal issues that might come up.
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On December 13 2010 08:15 Two_DoWn wrote:Show nested quote +On December 12 2010 18:49 SnK-Arcbound wrote:On December 12 2010 18:42 Two_DoWn wrote:
No. Do not invest in anything with a high price already. Ever. The only way the price will go is down, and you will lose a lot of money. Trust me, im a 4th year econ student in university.
The point in investing is to make money- so you buy low and sell high. By buying something when the price is already high, you are just asking the price to fall and to lose money. I'm sure Ben Bernanke has a lot of scholastic achievements, yet he's been wrong consistently for the past 10 years. Appealing to authority is a terrible way to make an argument. As a 4th year econ student you don't even seem to understand that making money has very little to do with buying low and selling high, other than trying to turn over stocks to make a profit. That isn't an investment. It is an investment. You are spending money in order to make a return. If you say that buying gold isnt an investment, you clearly have no idea what you are talking about.
Buying gold without detailed market knowledge is basically gambling. There is a difference between gambling and investing. When you invest in something, you are putting capital into it, believing that it's value will grow over time. When you don't know what you're doing with it and just putting money into it, you are gambling.
I'd be happy to be shown wrong, however, if perhaps you could cite me a reference as a 4th year econ student.
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On December 13 2010 09:33 sikyon wrote:Show nested quote +On December 13 2010 08:15 Two_DoWn wrote:On December 12 2010 18:49 SnK-Arcbound wrote:On December 12 2010 18:42 Two_DoWn wrote:
No. Do not invest in anything with a high price already. Ever. The only way the price will go is down, and you will lose a lot of money. Trust me, im a 4th year econ student in university.
The point in investing is to make money- so you buy low and sell high. By buying something when the price is already high, you are just asking the price to fall and to lose money. I'm sure Ben Bernanke has a lot of scholastic achievements, yet he's been wrong consistently for the past 10 years. Appealing to authority is a terrible way to make an argument. As a 4th year econ student you don't even seem to understand that making money has very little to do with buying low and selling high, other than trying to turn over stocks to make a profit. That isn't an investment. It is an investment. You are spending money in order to make a return. If you say that buying gold isnt an investment, you clearly have no idea what you are talking about. Buying gold without detailed market knowledge is basically gambling. There is a difference between gambling and investing. When you invest in something, you are putting capital into it, believing that it's value will grow over time. When you don't know what you're doing with it and just putting money into it, you are gambling. I'd be happy to be shown wrong, however, if perhaps you could cite me a reference as a 4th year econ student.
No, speculating is buying something, anything, that doesn't yield a specific return. Buying gold is speculating because it doesn't pay a dividend. Buying many stocks on the Dow is also speculating as a lot of them don't pay a dividend. Buying a house is speculating unless you are renting it out and sustaining a positive return against your mortgage payment after insurance, maintenance, and vacancy.
It doesn't really matter that much whether you are investing or speculating as long as you know what you are doing and why you are doing it. The price at which you buy an asset is also somewhat irrelevant. You don't make money by buying low and selling high. You make money by buying when you yield a high return or expect to sustain high appreciation and selling when you no longer are achieving either of these things.
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On December 13 2010 08:03 kzn wrote:
Let us get one thing straight: gold is not an investment. It is speculation.
When you put $1000 into gold, you are not investing in gold. To invest in gold, you'd have to put $1000 into a gold mine. What you actually do is you just buy $1000 worth of gold at current prices. The only way you make a return on that is if gold goes up in value, thus its speculation on the value of gold.
Second point: very few people have ever beat the market by speculating. If you aren't a huge expert on the uses of gold, the demand for gold, the supply, and so on and so forth, your expected value of "investing" in gold is 0% return.
It is, quite simply, a terrible idea unless you are hedging against inflation, and even then it is one of the worse ways of doing that.
But...
how are even those few to make money if there are no less knowledgable players on the market?
That's why it's absolutely crucial that people invest in gold (or anything else they have no idea about).
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Unlike gold, copper actually has many many uses esp. in network technology. If I were to speculate I would purchase a commodity whose demand is a function of production that is predicted to rise. I do not like speculating in assets whose values are derived from human beliefs ( such as gold or currency ). The global demand for copper is not going down anytime soon. China is just now starting to mine domestic copper from their northwestern regions, laying down highways between the mines and the cities. Copper is itself a great speculation asset because prices are volatile and there are theoretically arbitrage opportunities if you know what you're doing.
Article on commodities:
http://online.wsj.com/article/SB10001424052748704058704576015332264106072.html?mod=googlenews_wsj
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On December 13 2010 09:59 hypercube wrote:Show nested quote +On December 13 2010 08:03 kzn wrote:
Let us get one thing straight: gold is not an investment. It is speculation.
When you put $1000 into gold, you are not investing in gold. To invest in gold, you'd have to put $1000 into a gold mine. What you actually do is you just buy $1000 worth of gold at current prices. The only way you make a return on that is if gold goes up in value, thus its speculation on the value of gold.
Second point: very few people have ever beat the market by speculating. If you aren't a huge expert on the uses of gold, the demand for gold, the supply, and so on and so forth, your expected value of "investing" in gold is 0% return.
It is, quite simply, a terrible idea unless you are hedging against inflation, and even then it is one of the worse ways of doing that. But... how are even those few to make money if there are no less knowledgable players on the market? That's why it's absolutely crucial that people invest in gold (or anything else they have no idea about).
The few who can out-return the market through speculation are either extremely lucky, talented, or have insider information. I don't follow why it is "crucial" to invest in anything. If you have cash, buy a CD. If you're preparing retirement money then divest in a plethora in assets (indices, bonds, ETF's, commodities). Only risk-lovers should engage in speculation.
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On December 13 2010 07:08 Lucidx wrote:
This doesn't seem very legitimate to me. Talk to a financial adviser.
Great opinion, what seems legitimate to you btw?
On December 13 2010 07:58 Simplistik wrote:Show nested quote +On December 13 2010 04:10 Almin wrote:On December 13 2010 04:05 Simplistik wrote:On December 13 2010 03:55 Hatsu wrote:On December 13 2010 03:48 sikyon wrote:
I actually really hate the fact that gold is traded as a precious metal commodity since I'm trying to use it right now to synthesize some gold-coated nanoparticles and it's mad expensive. If it makes you feel better, other metals such as iridium skyrocketed even more, it's not just precious metals. Unlike gold, there's actually a reason for the iridium price increase! Over the last few years new applications for iridium have been coming around. Some of those applications (like touch screens and LEDs) are mass markets. Iridium is pretty scarce so the price goes up! Gold on the other hand... Not true, plenty has been found in Canada, South America, and in Afghanistan. Canada and SA is easy to mine, but Afghanistan...GL lol, point is, it's not that rare if Canadians are mining it at a massive amount. Could you please tell me what you mean by "plenty"? As far as I know nobody mines for Iridium anywhere. People mine for Platinum in South Africa; Iridium is a by-product. Many Nickel and Copper deposits also yield some Iridium. In Canada there might have been some Palladium mining which would normally also yield some Iridium. The annual production of Iridium last year was something like 2600 kg. The concentration in many deposits is only a few parts per billion. Allow me to repeat myself: Nobody mines for Iridium. If you would like more information regarding Iridium (and other Platinum Group Metals) check out: http://platinum.matthey.com/publications/
Hahaha, talk about schooled.
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On December 13 2010 10:05 j0k3r wrote:Unlike gold, copper actually has many many uses esp. in network technology. If I were to speculate I would purchase a commodity whose demand is a function of production that is predicted to rise. I do not like speculating in assets whose values are derived from human beliefs ( such as gold or currency ). The global demand for copper is not going down anytime soon. China is just now starting to mine domestic copper from their northwestern regions, laying down highways between the mines and the cities. Copper is itself a great speculation asset because prices are volatile and there are theoretically arbitrage opportunities if you know what you're doing. Article on commodities: http://online.wsj.com/article/SB10001424052748704058704576015332264106072.html?mod=googlenews_wsj
LOL at posts like this. Gold demand is predicated on the same economic ideas as copper demand, nothing about copper's uses makes it fundamentally more "understandable." Global demand for copper could absolutely go down in both the short term (supply shocks, price prices, etc) and long term (technological advance, alternative materials, etc). Furthermore, new mining projects all over the world and expected global demand in the future has already been priced in! You're not going to find any easy arbitrage opportunities, given my previous statement. Traders on prop desks and hedge funds wouldn't get paid like they do if it were so easy.
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On December 13 2010 09:50 eVaDe[Clean] wrote:Show nested quote +On December 13 2010 09:33 sikyon wrote:On December 13 2010 08:15 Two_DoWn wrote:On December 12 2010 18:49 SnK-Arcbound wrote:On December 12 2010 18:42 Two_DoWn wrote:
No. Do not invest in anything with a high price already. Ever. The only way the price will go is down, and you will lose a lot of money. Trust me, im a 4th year econ student in university.
The point in investing is to make money- so you buy low and sell high. By buying something when the price is already high, you are just asking the price to fall and to lose money. I'm sure Ben Bernanke has a lot of scholastic achievements, yet he's been wrong consistently for the past 10 years. Appealing to authority is a terrible way to make an argument. As a 4th year econ student you don't even seem to understand that making money has very little to do with buying low and selling high, other than trying to turn over stocks to make a profit. That isn't an investment. It is an investment. You are spending money in order to make a return. If you say that buying gold isnt an investment, you clearly have no idea what you are talking about. Buying gold without detailed market knowledge is basically gambling. There is a difference between gambling and investing. When you invest in something, you are putting capital into it, believing that it's value will grow over time. When you don't know what you're doing with it and just putting money into it, you are gambling. I'd be happy to be shown wrong, however, if perhaps you could cite me a reference as a 4th year econ student. No, speculating is buying something, anything, that doesn't yield a specific return. Buying gold is speculating because it doesn't pay a dividend. Buying many stocks on the Dow is also speculating as a lot of them don't pay a dividend. Buying a house is speculating unless you are renting it out and sustaining a positive return against your mortgage payment after insurance, maintenance, and vacancy. It doesn't really matter that much whether you are investing or speculating as long as you know what you are doing and why you are doing it. The price at which you buy an asset is also somewhat irrelevant. You don't make money by buying low and selling high. You make money by buying when you yield a high return or expect to sustain high appreciation and selling when you no longer are achieving either of these things.
So if I buy a lottery ticket I'm speculating?
You can only "speculate" if you have some reasonable reason to believe that the value of the item is going to appreciate (or depreciate if you're shorting). Going in blindly or without good reason is tantamount to gambling.
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EPT
