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Thread: Did anyone else invest in metals?

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    Default Did anyone else invest in metals?

    If you did, then come jump for joy with me! Gold is over $900! Silvers up too! Now what to do with it, especially with the dollar weak... Melonie?

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    Default Re: Did anyone else invest in metals?

    Wait for it to go up even higher? Then go down again? Then go back up....ad nauseum.

    What kind of a question is that...why are you investing anyway? What is your goal for the money? How does Melonie know what you want to do with it?

    What is your cap. gain on the asset? Poin is, gold isn't done yet, I would stay invested unless you need the money for a short-term purchase.

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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by Katrine View Post
    Wait for it to go up even higher? Then go down again? Then go back up....ad nauseum.

    What kind of a question is that...why are you investing anyway? What is your goal for the money? How does Melonie know what you want to do with it?

    What is your cap. gain on the asset? Poin is, gold isn't done yet, I would stay invested unless you need the money for a short-term purchase.
    Kinda harsh.

    I invested in gold because about a year ago because I speculated it was about to skyrocket so I guess I'm not quite the idiot you make me out to be.

    What kind of question is it? A good one, since as you stated metal prices can fluctuate wildy and can also be a nice asset in a screwy economic state.

    I am just curious to get Melonie's take on it, since in my opinion she is extremely knowlegeble and gives very sound advice. I'm not asking anyone to tell me what to do, I'm just curious what other people think. Especially since metals can be a good cash investment, and I figured dancers would probably be involved in cash investments.

    Sorry my question offended you...

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    Default Re: Did anyone else invest in metals?

    Durable goods and energy/utilities. Just my suggestion for alt. investments.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    speculate=gamble.

    that says alot. i guess we can understand why you jump for joy, then. congrats.

    don't find Katrine harsh. it's just some of us prefer to take a more conservative, fundamental approach because it is our life savings. not money to speculate with. in fact, i never want to speculate with my finances.
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    Default Re: Did anyone else invest in metals?

    most conservative investors would fall all over themselves for a mere 68 percent return-- just saying.

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    Default Re: Did anyone else invest in metals?

    well, I will officially hesitate to give any 'investment advice' ... but I will tell you what I have done personally.

    For the long term, I buy and sell 1 oz gold bars. I do this very infrequently since there is a large 'premium' involved in the transaction. I was aggressively buying gold bars 3-4 years ago when gold was under $500 an ounce. As gold began to rise I stopped adding. The first time gold crossed $700 last year I sold off about 1/2 of my gold bars, then bought them back as the price of gold settled back towards $600. I stopped adding as the price of gold started flying again, but added a bit on the pullback below $800 right around last Christmas. Right now I'm sitting on my hands again in regard to adding, and am prepared to 'pull the trigger' on a confirmed reversal (which is likely this quarter). Also, if you haven't figured out why I always 'hold' 1/2 of my gold bars it's because this allows me to ALWAYS claim a long term capital gain on bars I have sold. Between the buy/sell 'premium' and a short term capital gains tax rate applying, there's no way to really make money.

    Also, I don't own physical silver because it's not only subject to financial forces but also to industrial commodity demand, which bodes poorly for silver price versus gold price if a nasty recession develops. But I do like owning physical gold versus owning 'paper' gold in an index fund, because you never know what might happen in a 'financial doomsday' scenario where bank failures / technology failures / gov't rule changes might make it impossible for me to access my investment (or other investments or bank accounts for that matter). IMHO a good part of the reason for owning gold is as insurance against 'financial doomsday', so why would anybody want to give up this important aspect by buying 'paper' gold instead of the real thing ?

    For precious metals price 'speculation' I also buy and sell stock in gold/silver mining companies ... whose share price usually moves 3-4 times more steeply than the price of the metals themselves. At the moment I own shares in 2899.hk (Zijin mining) and MFN (minefinders).

    As you have pointed out, at the moment there aren't a lot of alternative places to 'park' the proceeds if you do choose to cash in winning investments from precious metals or any other investment. One of my short term favorites is of course SDS which is a 2x inverse of the S&P 500 - and as a result goes up in value based on every new misery announcement by the big Wall St banks. But this has to be watched like a hawk, and I always tag my SDS shares with an automatic stop-loss sell order. There is also SSO which is a 2 x proportional to the S&P which goes up in value when the next Arab / Chinese / Indian infusion of billions into the big Wall St. banks is announced. Flipping between these two ETF's is a high risk play where literally 'timing is everything' ... but with automatic stop-loss sell order under them the risk versus reward equation is pretty good IMHO even when short term tax rates apply.

    In the longer term, I'm trying to figure out how to structure a New York triple tax free muni bond investment at the point where the state of New York will be forced to go to the bond market in a desparate attempt to balance its budget after it figures out that it has lost billions in tax revenues from Wall St. corporate and employee taxes. So I have a fair amount sitting in 'cash' ... actually 3 month Euro CD's at EverBank ... earning a little bit of interest as well as some exchange rate gains while I'm waiting for New York's fiscal problems to go public some time after April 15th when the state's tax revenue numbers will be fact rather than speculation. The muni bond play though is specific to people in high tax brackets who live in 'troubled' states with high tax rates ... tax rates that are likely to be pushed even higher in the near future (which will further increase demand for these states' tax free muni bonds).

    ~
    Last edited by Melonie; 01-15-2008 at 04:24 AM.

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by Melonie View Post
    Also, I don't own physical silver because it's not only subject to financial forces but also to industrial commodity demand, which bodes poorly for silver price versus gold price if a nasty recession develops. ~
    Ironic. I own silver because I see the industrial aspects as being a real plus point at some time in the future. If only the market were more transparent...

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by XxAmber89xX View Post
    speculate=gamble.

    that says alot. i guess we can understand why you jump for joy, then. congrats.

    don't find Katrine harsh. it's just some of us prefer to take a more conservative, fundamental approach because it is our life savings. not money to speculate with. in fact, i never want to speculate with my finances.
    It wasn't her strategy that I called into question, I would never question someones personal finances, thats their own business. My "harsh" remark was more directed at the tone of her post, which I took to be kind of insulting.

    Quote Originally Posted by Melonie View Post
    well, I will officially hesitate to give any 'investment advice' ... but I will tell you what I have done personally.

    For the long term, I buy and sell 1 oz gold bars. I do this very infrequently since there is a large 'premium' involved in the transaction. I was aggressively buying gold bars 3-4 years ago when gold was under $500 an ounce. As gold began to rise I stopped adding. The first time gold crossed $700 last year I sold off about 1/2 of my gold bars, then bought them back as the price of gold settled back towards $600. I stopped adding as the price of gold started flying again, but added a bit on the pullback below $800 right around last Christmas. Right now I'm sitting on my hands again in regard to adding, and am prepared to 'pull the trigger' on a confirmed reversal (which is likely this quarter). Also, if you haven't figured out why I always 'hold' 1/2 of my gold bars it's because this allows me to ALWAYS claim a long term capital gain on bars I have sold. Between the buy/sell 'premium' and a short term capital gains tax rate applying, there's no way to really make money.

    Also, I don't own physical silver because it's not only subject to financial forces but also to industrial commodity demand, which bodes poorly for silver price versus gold price if a nasty recession develops. But I do like owning physical gold versus owning 'paper' gold in an index fund, because you never know what might happen in a 'financial doomsday' scenario where bank failures / technology failures / gov't rule changes might make it impossible for me to access my investment (or other investments or bank accounts for that matter). IMHO a good part of the reason for owning gold is as insurance against 'financial doomsday', so why would anybody want to give up this important aspect by buying 'paper' gold instead of the real thing ?

    For precious metals price 'speculation' I also buy and sell stock in gold/silver mining companies ... whose share price usually moves 3-4 times more steeply than the price of the metals themselves. At the moment I own shares in 2899.hk (Zijin mining) and MFN (minefinders).

    As you have pointed out, at the moment there aren't a lot of alternative places to 'park' the proceeds if you do choose to cash in winning investments from precious metals or any other investment. One of my short term favorites is of course SDS which is a 2x inverse of the S&P 500 - and as a result goes up in value based on every new misery announcement by the big Wall St banks. But this has to be watched like a hawk, and I always tag my SDS shares with an automatic stop-loss sell order. There is also SSO which is a 2 x proportional to the S&P which goes up in value when the next Arab / Chinese / Indian infusion of billions into the big Wall St. banks is announced. Flipping between these two ETF's is a high risk play where literally 'timing is everything' ... but with automatic stop-loss sell order under them the risk versus reward equation is pretty good IMHO even when short term tax rates apply.

    In the longer term, I'm trying to figure out how to structure a New York triple tax free muni bond investment at the point where the state of New York will be forced to go to the bond market in a desparate attempt to balance its budget after it figures out that it has lost billions in tax revenues from Wall St. corporate and employee taxes. So I have a fair amount sitting in 'cash' ... actually 3 month Euro CD's at EverBank ... http://www.everbank.com/001WorldCurr...x?LinkID=Body1 earning a little bit of interest as well as some exchange rate gains while I'm waiting for New York's fiscal problems to go public some time after April 15th when the state's tax revenue numbers will be fact rather than speculation. The muni bond play though is specific to people in high tax brackets who live in 'troubled' states with high tax rates ... tax rates that are likely to be pushed even higher in the near future (which will further increase demand for these states' tax free muni bonds).

    ~
    I wasn't asking for your offical advice, I wouldn't put you in that postition, I was simply curious as to your take on the tal market...
    I have to say I lost you a little near the end, but I had never considered the always keeping 1/2, and that seems to make a lot of sense financially. I just hope the price would stabalize a little bit, get me confident enough to sell a little for some profit.

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    Default Re: Did anyone else invest in metals?

    Dude, the reason I asked is because its hard to give any feedback without knowing anything about you. Didn't you ask us what to do with it, specifically Melonie?

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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    I just hope the price would stabalize a little bit, get me confident enough to sell a little for some profit.
    well. between the Fed cutting interest rates, the Chinese and Japanese and Europeans mucking around in the world currency markets (i.e. exchange rate manipulations), the hot money hedge funds, and the politically motivated arab oil states either rattling sabers about decoupling their currencies from the US dollar or refusing the US dollar as a currency for direct oil purchases, stability is not exactly something that can be reasonably expected in the spot gold market. The best I have been able to do is satisfy myself that there is economic gloom and doom on the horizon, and that the traditional response is for investors to sell paper and buy 'real goods' - with gold being pretty close to top of the desireable commodities list.

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    Default Re: Did anyone else invest in metals?

    Where can I learn more about gold and other metals?

    Speaking to a friend today who speculated that it will hit 2 or 3k in the next few years. Which could be crazy talk, could not be. I have no idea. I'd like to have a bit of knowledge in this arena.

    Feature costumes for sale!

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by Melonie View Post
    well. between the Fed cutting interest rates, the Chinese and Japanese and Europeans mucking around in the world currency markets (i.e. exchange rate manipulations), the hot money hedge funds, and the politically motivated arab oil states either rattling sabers about decoupling their currencies from the US dollar or refusing the US dollar as a currency for direct oil purchases, stability is not exactly something that can be reasonably expected in the spot gold market. The best I have been able to do is satisfy myself that there is economic gloom and doom on the horizon, and that the traditional response is for investors to sell paper and buy 'real goods' - with gold being pretty close to top of the desireable commodities list.
    Sad but probably true... Though the economy will eventually correct itself, it always does. So unless some doomsday even happens then the gold market will probably return to normal, I'd like to grab a profit before that happens, and maybe it put it in something where it can hold over to the dollar gets a little stronger. Or perhaps I should start playing the currency markets, although I call that serious speculating.

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by scarlett_vancouver View Post
    Where can I learn more about gold and other metals?

    Speaking to a friend today who speculated that it will hit 2 or 3k in the next few years. Which could be crazy talk, could not be. I have no idea. I'd like to have a bit of knowledge in this arena.
    We've been talking gold at work all week. Resident geniuses say....more diversified natural resources!

    Gold is still undervalued.

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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by jester214 View Post
    Sad but probably true... Though the economy will eventually correct itself, it always does. So unless some doomsday even happens then the gold market will probably return to normal, I'd like to grab a profit before that happens, and maybe it put it in something where it can hold over to the dollar gets a little stronger. Or perhaps I should start playing the currency markets, although I call that serious speculating.
    You could try one of those currency CD's. The Brazil Real is returning decent interest.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by miabella View Post
    most conservative investors would fall all over themselves for a mere 68 percent return-- just saying.
    No. If gaining 68% also means there is an equal chance of losing 68%, it is not a good investment or at least no better than a trip to Vegas

    There are plenty of individual assets, even popular ones like Apple, Google that returned more than 68% (I Would put Apple and Google far less riskier than Gold). But to each his own.

    People tend to fall in love with a particular asset class due to any number of biases.

    Personally, Gold has no intrinsic value for me and its prices are usually driven by speculation and considering the media hype about Gold, it has only one way to go, i.e down.

    Will I know the exact time when it happens? No Idea. It may hit $2000 or $3000 or even $5000 before it falls to $300 or below. Nobody can time a speculative instrument (of course some will get lucky just like Vegas).

    But, I can confidently state that over a 15-20 year horizon, Gold would have significantly underperformed the S&P 500 Index.

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    Default Re: Did anyone else invest in metals?

    Xanfiles is correct. This is why I have no gold in my long-term portfolio. And I don't really invest for the short-term, just trying to save and maximize my business's growth (I get residual income with what I do, yay!)

    Although intrinsic value is debatable. Per Melonie and others...if the system collapses, companies fold, and the dollar becomes worthless, there still may be some value in gold as an asset for basic trading and bartering. That's a long-short for me, and too pessimistic. Even though I am generally pessimistic. That kind of thinking is just too scary, even for me.

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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: Did anyone else invest in metals?

    again it comes back to the concept of intelligent personal selection of different investments at different times to go along with different economic conditions in a medium term time frame, versus simply investing for the long term and leaving the 'selection' to someone else.

    Precious metals are what they are. Some people are in love with them regardless of economic conditions. Other people loathe them regardless of economic conditions. People somewhere in between realize that they can present a high reward low risk investment under certain economic conditions, but a low reward high risk investment under different economic conditions.

    Also, a variation on Katrine's theme is that once a particular type investment becomes a 'hot topic' in the media and at the water cooler, this usually means that the majority of the potential gains in that investment have already occurred ! As I posted earlier, I am watching the US $ exchange rates, I am watching the (real) US inflation stats, and I am watching the US presidential campaigns ... and am prepared to pull the trigger or load the boat re gold depending on what sort of direction change does or does not occur in the next few weeks.

    You could try one of those currency CD's. The Brazil Real is returning decent interest.
    actually, right now I am regretting that I didn't buy a Yen CD instead of the Euro CD. I'd rather have zero percent interest but a 6% gain on principal in 3 months ! Of course the Euro CD will pay 3% interest plus a 2% gain on principal in 3 months.

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by Melonie View Post
    As I posted earlier, I am watching the US $ exchange rates, I am watching the (real) US inflation stats, and I am watching the US presidential campaigns ... and am prepared to pull the trigger or load the boat re gold depending on what sort of direction change does or does not occur in the next few weeks.
    Except nobody knows which of these factors will affect Gold Prices and to what extent.

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    Default Re: Did anyone else invest in metals?

    ^^^ (wiping her crystal ball with Windex) .... well I DO LOL !!!

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by xanfiles1 View Post
    No. If gaining 68% also means there is an equal chance of losing 68%, it is not a good investment or at least no better than a trip to Vegas

    There are plenty of individual assets, even popular ones like Apple, Google that returned more than 68% (I Would put Apple and Google far less riskier than Gold). But to each his own.

    People tend to fall in love with a particular asset class due to any number of biases.

    Personally, Gold has no intrinsic value for me and its prices are usually driven by speculation and considering the media hype about Gold, it has only one way to go, i.e down.

    Will I know the exact time when it happens? No Idea. It may hit $2000 or $3000 or even $5000 before it falls to $300 or below. Nobody can time a speculative instrument (of course some will get lucky just like Vegas).

    But, I can confidently state that over a 15-20 year horizon, Gold would have significantly underperformed the S&P 500 Index.
    Yes but unlike stocks Gold usually rebounds, and Gold doesn't crash either, it will always hold worth. If the price of gold were to drop 68% two days after you buy it, thats probably not the end of the world, because Gold will rebound. If a stock drops 68% two days after you buy it, you're basically screwed.

    Stock and Gold are two totally different entities and it's hard to compare the two.

    I also maintain that if you slowly accumulate metals over a long period of time (in my case I was just speculating) it is a strong investment.

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    Default Re: Did anyone else invest in metals?

    Quote Originally Posted by Melonie View Post
    ^^^ (wiping her crystal ball with Windex) .... well I DO LOL !!!
    Can I borrow it?

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    Default Re: Did anyone else invest in metals?

    ^^^ my Windex ? sure !

    jester makes a good point that stocks and corporate bonds are essentially 'pieces' of a particular company. If and when that company loses profitability, the company itself can simply disappear with it's stock and bond paper becoming totally worthless.

    On the other hand, gold, silver etc. are physical commodities. They have intrinsic value that can never fall to zero. So while there can be some price variation in commodities that stems from changes in demand / consumption levels, the majority of price variation in gold and silver stem from exchange rate moves in the currency in which it is being priced !!!

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