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Thread: Dont Kick me....

  1. #1
    God/dess PaigeDWinter's Avatar
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    Default Dont Kick me....

    I know there have been some threads on investing in stocks, bonds, gold bars, silver, platinum, diamonds (or whatever jewel is in favor currently), and coins.... I want to research which is the best buy, which I can actually even dream of affording to do, and where to do it through.


    If you dont wanna use this thread as a revival of old shit, please just email me? paige@paigedwinter.com



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  2. #2
    Banned Melonie's Avatar
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    Default Re: Dont Kick me....

    at this particular moment in time, there are a large number of unknowns in regard to the future of mideast conflicts, the relative future value of the US dollar, future gas/oil/energy price direction, future tax rates, and a host of other things.

    If there is any truth to the 'tin foil hat' crowd's contention that the only way that the US gov't can keep the economy afloat is to keep 'printing money' (which I partially agree with BTW) thus devaluing the US dollar relative to other currencies, then logic dictates that silver and gold should go up in real terms, that gas/oil/energy will go up in real terms for a while (until an economic slowdown reduces demand), that US stocks will probably go up in numeric terms but not necessarily in real terms, that foreign stocks should go up in numeric terms and hold their own in real terms, that interest rates will go up and up and up, that bonds will go down and down and down, that effective tax rates will go up (automatically) etc.

    I bought some 10 oz silver bars as well as stock in silver miner WTZ back in January on a silver price pullback, based on the premise that silver has lagged gold, platinum, copper etc. in the recent commodities rally. However it may now be too late to get on the commodities bandwagon, as speculators, gov't intervention and a potential future overall economic slowdown will attempt to depress these markets from their current (near) record highs.

    If you're looking for a 'pure' bet on a declining US dollar versus the Euro, there is a new exchange traded fund available -ticker symbol FXE. I'm seriously considering moving more money into this fund if the US dollar pops above 1.18 Euro again.
    ~
    Last edited by Melonie; 03-30-2006 at 04:58 PM.

  3. #3
    God/dess Deogol's Avatar
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    Default Re: Dont Kick me....

    Investing is really more of a measure of risk. There are books and articles about "Value of Information" and "Risk Analysis" that can help you put numerical judgements on various opps.

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    Veteran Member StuartL's Avatar
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    Default Re: Dont Kick me....

    As ever, I'd advise you to follow Melonie's advice here. She's really on the ball with this stuff.

    Silver and gold are probably the best bets right now - and for quite a time to come. Gold because of it's investment value, silver because of it's amazing supply and demand future and some investment value.

    I personally have been buying silver whenever I see either good deals or I have the spare cash. If you listen to the newsletter experts, then they all suggest buying metals in three forms to diversify your holdings: bullion, coins with and without numismatic value and mining company shares. Lets be honest here though, whilst that may be a mathematically correct way to invest and lowers your risk and volatility - how many of us actually have the money to do this? And if we did have the money ... wouldn't we be better clearing the mortgage first???

    If you are new to this game, then silver is probably a better investment for you. Firstly, you can invest on the cheap as it were. Silver is c. $9-10 per troy oz where as gold is (last time I looked) c. $540 per troy oz. Silver is likely to be a more volatile investment but the potential returns look very promising indeed. The silver market globally doesn't appear to be all that liquid which means that you may have potential problems when you sell, but if prices and demand have risen strongly, it really ought to be a cinch to sell. For small quantities, it should not be a problem.

    As with every investment - caveat emptor. Do you own research. Don't trust me or Melonie or anyone else. It's your money and you will bear the ultimate responsibility and losses should it all go wrong. Do some reading online first, buy and digest a book or two and dip your toe in gently whilst you figure out what you are doing.

  5. #5
    Veteran Member StuartL's Avatar
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    Default Re: Dont Kick me....

    PS. FAO Melonie only.

    Re your comments about the US$ vs euro. You might be a sophisticated enough investor to have a crack at a currency sandwich if you believe there is a trend coming. It involves borrowing in US$ and investing in euro denominated bonds. The bond income takes care of the interest due, more or less, and the US loan is then repaid with the bonds. The value of the loan falls vs the bonds making the profit, if the currency moves as you predict. You can further hedge the risk should you need - but you know what I mean there I presume.

    You'll need to do some research as I don't think it is appropriate for me to really spell out the mechanics of it here. This sort of trade is for very knowledgable investors only, who follow the markets closely and act accordingly.

    About this time two years ago, as the dollar started it's plunge vs the euro I put a couple of my well heeled clients into this. They both do their banking in Switzerland so had their banks take care of the legwork. The trades as I constructed them were virtually risk free. One made just over 70% in about 5 months, the other over 90% in the same time. Bearing in mind that they were using over 250,000 euro each, that's quite a profit for very little risk. And tax free too for them!!

  6. #6
    Banned Melonie's Avatar
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    Default Re: Dont Kick me....

    Stuart, I actually was able to do this on a small scale in the days before the anti-terrorist money laundering treaty forced 'foreign' holders of Swiss and other offshore bank accounts to show up in person to prove their identity. I had an account at SwissNetBank (now defunct), bought Euros at something like .91 and cashed out at something like 1.24 when SwissNetBank was shut down.

    I know that it's still possible to maintain a Swiss or other offshore bank account, but the 'hoops' which must now be jumped through in regard to a designated agent in the foreign country and US State Dep't disclosure requirements (quickly followed by your name being bumped up the terrorist watch list and the IRS audit list) make offshore accounts more or less impractical for 'small' investors today. The best I can now manage as a 'small timer' is to buy FXE shares on 2:1 margin - a move which I don't consider to be gambling given current US dollar policy (and cancellation of M3 reporting LOL !). Now if only somebody would start an exchange traded fund based on German Bunds - where I could get an interest kicker on top of the currency exchange rate !

    I looked into the costs involved for my full service broker to directly purchase German Bunds a while back, which turned out to be a substantial percentage of the total dollar value I would be willing to invest in that direction. It's one thing to pay an E500 commission on E250,000 worth of Bunds, it's another to pay the same $500 commission on $10,000 worth of Bunds (i.e. kills most of the potential spread)

    What I'm really waiting for is regulatory approval of the long proposed exchange traded fund based on silver. If/when this happens, it will create an additional and immediate demand for silver bullion and the price should take a major upward jump. Gold price went through a similar scenario when StreetTracks gained approval for their GLD fund based on gold. This possibility is the reason that I'm increasing my holdings in silver BEFORE an exchange traded silver fund is approved, and before 'joe sixpack's money' starts investing in silver via pension / retirement funds etc.

    Another thing that most people aren't consciously aware of is the relatively small 'size' of the gold and silver markets worldwide. Relative to even a single stock like GOOG or GM, where buying or selling $1 billion worth of shares in a day causes a small move in the share price, an extra $1 billion in gold/silver purchases or sales would cause a significant move in the market price !
    !~
    Last edited by Melonie; 03-31-2006 at 04:55 AM.

  7. #7
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    Default Re: Dont Kick me....

    Although I know most probably won't agree with me I must tell you my best investment from a performance standpoint has been my stocks in Gamming companies . I hold stocks in HET - Harrah's Entertainment and they are performing quite well , but I have contributed to this stock for 15yrs . Now the company is the largest casino operation in the world . But on the other hand I have some stock in SWG - southwest gas and it did good for me as well but I bought it at 16-18 per share ( it never lost money ). I just broke even as of late on my Tech and Bio stocks so I took the money and ran - no more of that for me it took 5yrs to get back to what I paid for it . Its all just a big gamble in a way to me just dont put all your eggs in one basket . This is just my keep it simple stupid point of view .

  8. #8
    Banned Melonie's Avatar
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    Default Re: Dont Kick me....

    Does Het appear to be more stable in this graph ? Although your silver has better gains in the long run it seems to have a lot of downward trends as well .But either stock looks like a good buy if you got in at the rite time, I guess thats the key isnt it ?


  10. #10
    Banned Melonie's Avatar
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    Default Re: Dont Kick me....

    yes that's always the key ... buy low, sell high. Try to identify a future trend before everybody else does, figure out which types of businesses/investments should do better under the future trend than they are today, and put your money into those businesses/investments before every else also decides those investments are a good idea also and bid up the price. Usually at about the time that the 'herd' discovers a new favorite investment, and they start bidding the price up sky high, it's time for the 'smart money' to sell out at a big profit and move into something else !

    For example, ask yourself what sort of business should do very well in an environment where unionized employees are about to be laid off/fired, where 'subprime' borrowers are about to start worrying about how they're going to buy groceries when their mortgage payment goes up by $1000 per month, etc. Might be a good time to stock up on SAM or BUD shares ! If you suspect that the US illegal immigration problem is unsolveable, it might be time to invest in AEA. I'd also consider holding onto your gambling stocks, as more than a few people who will soon be headed for bankruptcy will probably try to save their asses at poker tables and slot machines (after all, they really have nothing additional to lose) !

    I guess my somewhat sarcastic point is that, even in the worst of times, certain types of businesses will profit handsomely from other people's 'misery' ... and 'smart money' investors will profit right along with them ! It might not be 'politically correct' to consider profiting from the misfortune of others, but if you don't then someone else will !

    Also, most 'small time' investors don't realize that they can 'short sell' or buy 'put options' and make money on the future DECLINE in the price of a particular stock. Homebuilder stocks and Detroit automakers have been very good 'contrary' stocks lately, as have 'corporate' strip club chains !
    ~
    Last edited by Melonie; 03-31-2006 at 05:23 PM.

  11. #11
    Veteran Member StuartL's Avatar
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    Default Re: Dont Kick me....

    I don't know about in the US, but in the UK I have seen research which proves that the hottest sectors to be in over the course of a decade are tobacco and the utility companies. I don't really think I'll become a tobacco investor, but that's where the coin is.

    Re your reply Melonie ... good for you. I wasn't sure if the foreign account issue would be a problem for you. How could I have doubted uncle sam? You are also very right about the silver market and etf. It seems that implicit agreement to list has been made, but when it becomes official, they will be looking for c. 120 million oz and that will be wonderful for us silver investors. From there on, for months to come, we'll make nothing but money!!!

  12. #12
    Banned Melonie's Avatar
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    Default Re: Dont Kick me....

    Quote Originally Posted by StuartL
    I don't know about in the US, but in the UK I have seen research which proves that the hottest sectors to be in over the course of a decade are tobacco and the utility companies. I don't really think I'll become a tobacco investor, but that's where the coin is.
    Where the US is concerned, Tobacco yes for sure ( big MO ) but utilities usually no. The reason that US utilities have often taken a beating is that the American electric industry is only partially deregulated, which often led to cases where utilities were forced to purchase high priced power on the open market and resell it to customers under regulated rates that were below their actual cost of delivery. The closest you can come in regard to financial conditions for european utilities on American stock exchanges are energy royalty stocks like WTU (which I just loaded up on - and yes it really is paying an 11.5% dividend right now), BPT, SJT, FDG etc. (all of which I have owned at one time or another)


    Re your reply Melonie ... good for you. I wasn't sure if the foreign account issue would be a problem for you. How could I have doubted uncle sam? You are also very right about the silver market and etf. It seems that implicit agreement to list has been made, but when it becomes official, they will be looking for c. 120 million oz and that will be wonderful for us silver investors. From there on, for months to come, we'll make nothing but money!!!
    Yup, with all the new attention toward Homeland Security, and with new efforts to shut off 'tax shelters', Americans with offshore bank accounts now come under a great deal of scrutiny both from the FBI and the IRS. But even it that were not the case, with the terrorist anti-money laundering treaty in effect it is now virtually mandatory that the account holder show up in a bank branch located in a foreign country in order to prove their identity in order to open/keep an offshore account. There is also automatic cross-border currency transfer reporting to HS and the IRS.

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