EPTInvest in gold? - Page 7
| Forum Index > Closed |
|
Wombatsavior
United States107 Posts
| ||
|
GeneralZap
United States172 Posts
I bought gold at 667$ just about 2 to 2 and 1/2 years ago at 667$ an ounce. Look at todays prices, and insert foot in mouth. | ||
|
kzn
United States1218 Posts
On December 13 2010 10:29 sikyon wrote: So if I buy a lottery ticket I'm speculating? Yes, in a strict application of the theory. You are speculating that your ticket will win (i.e., you are speculating that you got the ticket that has value, and everyone else got the bad ones). [edit] Granted, however, that it doesn't really work because the value of a lottery ticket is either impossible to deduce or woefully simple to figure out. The only people who consistently play the lottery do so for reasons of either stupidity or weird utility functions. 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. The reason its still gambling is because there is no reason whatsoever to assume you have access to more information (or better ability to process that information) than the entire market does. There are thousands of people who make their living trading gold and they consistently make bad decisions too - someone who's looking to just shove money somewhere and make a return would make far more doing something else. "Investing" implies that a real return is generated with your money. No real return is generated by a purchase of gold. In that sense, purchasing stocks on the market isn't really investment either, but the reason stocks make more sense is that they are zero-sum around market average growth, where gold is zero-sum around 0% returns. | ||
|
FXOpen
Australia1844 Posts
There are 'chaos' theorists trying to tell everyone gold will hit 5000 by end of 2012. But any significant out of ATR (average trading range) increase would cause the market to go offline. I wouldn't buy gold until its closer to 1000 again. | ||
|
sikyon
Canada1045 Posts
[QUOTE]On December 13 2010 10:29 sikyon wrote: [quote]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.[/QUOTE] The reason its still gambling is because there is no reason whatsoever to assume you have access to more information (or better ability to process that information) than the entire market does. There are thousands of people who make their living trading gold and they consistently make bad decisions too - someone who's looking to just shove money somewhere and make a return would make far more doing something else. "Investing" implies that a real return is generated with your money. No real return is generated by a purchase of gold. In that sense, purchasing stocks on the market isn't really investment either, but the reason stocks make more sense is that they are zero-sum around market average growth, where gold is zero-sum around 0% returns. [/QUOTE] Are stocks really zero sum around average market growth? If you invest in a certain selection of stocks... can you not be investing with the expectation of directly increasing values of those stocks, which is tied directly to either dividends or future expectation of dividends? I thought that was the entire (theoretical) point of controlling stocks, but I'm no econ expert. | ||
|
deafhobbit
United States828 Posts
On December 13 2010 08:17 jstar wrote: 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. Agreed. Getting a BA in econ taught me enough about finance to leave it to the experts. If you have the extra money and want to play the market for fun, that's another thing. But for the love of god, give your savings to someone who actually knows what the hell they're doing with it. | ||
|
kzn
United States1218 Posts
On December 13 2010 11:49 sikyon wrote: Are stocks really zero sum around average market growth? If you invest in a certain selection of stocks... can you not be investing with the expectation of directly increasing values of those stocks, which is tied directly to either dividends or future expectation of dividends? I thought that was the entire (theoretical) point of controlling stocks, but I'm no econ expert. For you to make more money than the market grew, someone has to have lost an equivalent amount of money relative to market growth. Market growth reflects the actual gains from investment (in the long term, short term it can reflect bubbles), so any deviation from market growth has to represent gains or losses on the value of the stock you purchased (i.e. speculative gains). So, yes, its zero-sum. However, short-term its zero-sum around market growth and can thus reflect speculative bubbles. Long-term it will be zero-sum around, roughly, GDP growth. | ||
|
Glacierz
United States1244 Posts
On December 12 2010 13:23 Chylo wrote: Random people asking if they should buy some random investment on a website totally unrelated to investing is a classic sign of a bubble. Smart people were buying gold in 2003, not now when random kids on starcraft forums think it's a good buy. Could you still make money in gold and could it still go up more? Yes, but the risk is quite high. Also buying gold is not investing, it's speculating. Unless you understand the difference you shouldn't be buying either investments or speculative products. LOL this post is gold (no pun intended). Classic sign of bubble is when your average Joe neighbor starts telling you what stocks to invest in. | ||
|
Glacierz
United States1244 Posts
On December 12 2010 19:34 Empyrean wrote: Why has no one bothered to respond to this post yet? It's one of the better ones in this thread. The understanding of that is pretty straightforward. Investing in any forms of commodities suffers from the demand/supply risk. Commodities in general are cyclical products that fluctuates with market conditions. The demand of Gold only comes from jeweleries and some specialized industrial production, otherwise it is worthless. Gold diverged from the trend because of the "flight to safety" rationale (lots of people think of it as the "reserve currency"). As soon as the world economy stabilizes, Gold will go through a correction. It's not a long term investment, but a hedge against certain scenarios such as inflation and currency instability. I would direct you to the last section of this post to explain why Gold should return 0% after adjusting for inflation: http://www.teamliquid.net/blogs/viewblog.php?topic_id=173226 | ||
|
beridoxy
France54 Posts
If you get gold because you belive that bank or currencies might have 0 value one day, then food will have more value that gold. In my country physical gold has specials tax. So I think it's a bad idea. | ||
|
adamb111
27 Posts
On December 13 2010 08:17 jstar wrote: PLEASE find a broker. lol... That's the last thing you want to do. Especially if your plan is to make money. As for buying gold; wedding season is still in, and currency's are still weak. Half of our reserves are swaps, which, in this context, means that they are not reserves but simply arrangements with other institutions to swap gold for some other asset be it a currency or whatever. As such, the reserves could potentially be much smaller than indicated. But all those ETFs... I wonder what would happen if someone summoned their claim on gold only to find out that the gold for which the claim was made hasn't been dug up yet? What if the FED has indeed managed to keep the party going? Don't buy gold unless you can sleep at night while watching your money go bye bye. And this is a definite possibility since the parabola is a trader's best friend. But, if you choose to buy, then at least go to your branch and buy the real stuff. Then, store it in your freezer. However, this is not an investment. Once you buy the gold you are speculating that the price will continue to increase. Plain and simple. | ||
|
ZiggyD
Australia64 Posts
| ||
|
chonkyfire
United States451 Posts
I don't know about now. Gold is really the best way to make your money inflation proof. Keep in mind when the American dollar strengthens, which I acknowledge it could devalue in the future, your gold investment will haunt you. | ||
|
gulati
United States2241 Posts
Gold is a great hedge against the US dollar depreciating, but as you can tell, it also performs well during a bull market (maybe not as well as an equity, but well in general). Conclusion for you non-finance people: BUY GOLD. (Trust me).  | ||
|
chonkyfire
United States451 Posts
On December 26 2010 07:20 gulati wrote: Conclusion for you non-finance people: BUY GOLD. (Trust me). Why now though? Timing is everything in the financial world, and now does not seem like the most ideal time to buy. Is there something I"m missing? edit: Wow just checked out SPDR gold trust, that was a very nice buy if you got in on that in 07. | ||
|
gulati
United States2241 Posts
Gold cannot be manipulated in the ways that traditional equities can (unless you are talking about a Gold mining company, such as EGO). Gold is still on an uptrend, and all Fibonacci retracements imply that it is going nowhere but up. Since you are dealing with an ETF that tracks global Gold per troy ounce, it isn't 100% accurate, but it roughly is the price of gold divided by 10. There are low management fees, and the returns are substantial. The day the market dropped 900 points in 90 seconds, I bought a huge portion of GLD at a $3 premium spike, but it didn't matter- my return has been over 19% since that horrific day. If you want to be satisfied with higher returns, you can go with a Gold mining company. However, that will have a higher implied volatility (higher Beta), so the risk is all based on your assessment. | ||
|
gulati
United States2241 Posts
| ||
Jibba
United States22883 Posts
Come on people... | ||
|
leecH
Germany385 Posts
ed. as far as "dont trust tl posts" ive talked to my father (who is very involved in a major car company, high position etc. reads financial newspaper forever and is making more money ill ever make in my life) he told me gold is too expensive now to make money and silver is too common. just take it for what its worth. to summ it up. if you ASK teamliquid you may not want to invest into anything. lets put it this way. | ||
|
gulati
United States2241 Posts
On December 26 2010 07:28 Jibba wrote: The absolute worst thing you could do is take financial advice from a random TeamLiquid poster, regardless of whether they tell you to buy gold, rocks or magic fairy dust. Come on people... There is a difference between stating opinions and forcing you to buy something. This isn't seekingalpha.com, bro. Just helping out my community members with knowledge. P.S., don't ever buy an ETF without understanding the risks of them. They are a different animal than equities. | ||
| ||
![[image loading]](http://img51.imageshack.us/i/goldalldataousd.png/)
