Tips on buying Gold or Silver?

reply to post by OBE1



Yeah, I hear the same tired old mantra too.

"What bubble?" "There isn't going to be a bubble." "Get in while you still can." "This is different because ..."

"The Internet is different, it doesn't follow the same fundementals!"

"You can't lose on Real Estate!"

"Gold has never been worth zero!" (Well it has been worth a lot less than $1,400 an ounce!)

Blah, Blah, Blah.

What happens when the currency is debased? It loses value. What will happen when currencies lose their value? Governments will sell Gold stockpiles to try to keep their currency propped up. What happens when they all decide to sell instead of stockpiling? The market will flood with sales and it's value will drop. The institutions will dump first and the average "investor" will be be a day late and a silver dollar short.

Gold's "value" as a commodity is "asset protection" and highest when stockpiling. Gold upward price is driven by speculation. As soon as everyone needs to sell it to buy the commodities that they actually need, it will drop like a rock.

Go ahead and show all the charts in the world to convince the ignorant masses otherwise. Gold is a commodity just like everything else, and not even the most useful one at that.

People can achieve the same inflation protection in the stock market by buying utility companies. Without the risks associated with keeping a bunch of gold in their closet. Why, because companies create value and Gold just sits there. Don't believe me? Why do you think the DOW is 11,300? It's not because our economy is booming! It's because the weaker dollar is priced into the market right now.

You see, the market is not high at 11,000 - because it is traded in U.S. dollars and the market has adjusted for inflation. Proof of the lie that we are not seeing much inflation.

If people want a real story on Gold they should read this:
Mish's Global economic Trend Analysis: Why Gold is a Bad Investment

“Gold at $1,400 is not what I would call an investment,” said Kaplan, of Prospector Asset Management. “An investment is something you buy near its value. If gold costs $450 or $500 to produce, at $1,400 you don’t have value, you have momentum.”

“I called gold the ultimate bubble, which means it may go higher,” Soros told an investor conference in New York in mid-September, repeating a warning he’d made earlier this year. “But it’s certainly not safe and it’s not going to last forever.”

Just like I said, Investing 101: Your money is made on the BUY! And Gold is overvalued. Maybe you'll get lucky and get out before gravity sets in, most will get burned.

If people really want to educate themselves they should read Mish's Global Economic Trend Analysis weekly.


P.S.
I linked valid sources not some crappy "GoldBarsWorldwide.com" website. What are you a Gold salesman?

Originally posted by AP-Chris
If people really want to educate themselves they should read Mish's Global Economic Trend Analysis weekly.

I agree, everyone should read Mish occasionally...he's a strong Gold advocate by the way...right on Gold, but for a few of the wrong reasons imo. By the by, I thoroughly enjoyed his brief comment on the $100 bill snafu in his latest blog entry....

To point out the obvious: you can't print gold and gold coins are relatively easy to check for purity.

Mike "Mish" Shedlock
Full Text

Right on Mish!

Originally posted by AP-Chris
What happens when the currency is debased? It loses value. What will happen when currencies lose their value? Governments will sell Gold stockpiles to try to keep their currency propped up.

Originally posted by AP-Chris
Gold is a commodity just like everything else, and not even the most useful one at that.

As every major currency is being burned to the ground (see Gold), sovereigns have become net buyers...not sellers. Why are CB's accumulating ? Because holding Gold as a reserve asset adds strength/backing to a given currency...especially troubled currency. Which explains why the US holds over 70% of it's foreign "currency" reserves in physical Gold...not wheat, corn, soybeans, or shares in some ETF. When central banks begin hoarding pork bellies, let me know and I might begin to consider Gold as simply a commodity. Sovereign state, or individual taxpayer, not owning Gold, or worse...dumping Gold when you're fiats' in the chitter, would be the equivilent of sticking a shotgun in your mouth and pulling the trigger.

If you read the link you posted in it's entirety, in essence, Mish's rebuttal to the Jonathan Burton article, you learned that even Mish disagrees with you....

Gold is Money

The bottom line to me is that "gold is money". We know that gold is money because it acts like it. - Full Text

Will Gold, the anti-fiat, eventually enter a mania phase ? Probably. When it does, will it blow-off in a total collapse, or will it top and continue to trade in a high and narrow band...in some form or function, reintroduced in it's official monetary capacity ?

But more to the point of this thread; Will Gold top this year...next year ? Only if the moon is made of green cheese my friend.

Originally posted by AP-Chris
P.S.
I linked valid sources not some crappy "GoldBarsWorldwide.com" website. What are you a Gold salesman?

I linked to a website that provides educational information; info that might be of value to novice precious metals investors. Unlike yourself, I did not link to a website hoping to support my personal anti-Gold investment thesis...only to find a pro-Gold Mish Shedlock shreding a well known group of perma-bears; Nadler, Kaplan & Burton. I must add, and with all due respect AP-Chris, you're thinly veiled hostility, is only exceeded by your ignorance in matters Gold related. Let me make a wild guess...somehow, you missed participating in the best performing asset of the past decade I'm what you might call a "first responder".

I've been engaging in similar conversations here on ATS since 2006/$600. After 4 years, and an $800 advance, they become weary-making and redundant. If you like, we can resume this dialog next year at $2000. Until then, there's a forum known as the "Yahoo Stock Boards" where unsubstantiated "opinions" are tolerated, even admired...it may be better suited to your particular style.

"key reversal" today but probably a iii:5 of this leg (27-28 critical). next leg shud fail in 32-34 area altho we got close to the low end today. it is hard to say how far an extreme correction could carry. fibonacci $13 from the high (as in 2008) could take us back to the upper 17 area which is the "birth of acceleration" of this move (JPM short and CFTC exacerbated along w QE2). fib $8 off this high takes us to the upper 22 handle. the market is volatile....buy low not high and fasten your seat belts.

reply to post by CosmicCitizen


But Food and Water first! if you don't then well... u will regret it!

Wow gold really is something right now the devaluation of the dollar is and always has been at hand!

I feel the distain for AP-Chris is not quite fair. He is giving his opinion on investing overall.
Most of the people here who are looking to invest are using money they can’t easily afford to lose. And if they had pumped a couple of thousand in yesterday, like the guy on here who is walking away from his house, they would feel really crappy today. With a 3%+ haircut in the price in one day, it’s not for your last dollar.
For all those who haven’t thought about it:
A 25% drop today means you have to go up 33% just to break even.

I have to agree with AP-Chris utility stocks are far more stable. Plus they pay a hefty dividend.

Now if you are sure the world is going to hell in a handbag next year, buy metals. Someone will just rob you for it. But haven’t they been predicting a collapse every year?
Didn’t the stock market double in a year?
My Ford tripled before I sold.
My Genworth doubled before I sold.
My Duke doubled before I sold. Etc etc etc
I’m still waiting for the collapse.

Apparently the news floated yesterday about a possible Chinese rate hike this coming weekend was all the shorts needed to begin "shaking the tree", and spark a round of profit taking by successful spec longs. As of today, we've had a near perfect 50% Fib retracement in Silver, and 61.8% in Gold from the mid-November lows. Yet to be seen if today's levels will hold as the lows for this move, but rapid, violent corrections like this have a tendency to be short-lived.

It runs contrary to emotions , but the larger profits always are made by those with the testicular fortitude to buy when everyone else afraid to ("blood in the streets") as CosmicCitizen alluded...or, as the chartista's are fond of saying: Buy the fishing line - sell the rhino horn.

reply to post by OBE1

I am LT bullish....but one has to be cautious when the little guy buys high (always at "the top"). The grassroots campaign to get the little people to go out and buy 1 oz of silver to collectively squeeze JPM had Dec 7th as it's big day...especially with the concomitant campaign to take one's cash out of the banks and buy silver with the proceeds. We might see a 50% of the entire move not just since the mid Nov low.

reply to post by OBE1


You imply I am anti Gold because I'm jealous for missing the boat or something.

Not really.

So in 2006 you purchased Gold at $600 and ounce and now it's around $1400 an ounce. Any upside from here is pure speculation as George Soros states. Over doubled your money in 4 or 5 years. Pretty good and you should be happy with that play. Back on page 2 I outline a position I held in Genworth Financial for 2 years. I made over 1000% return on that investment. With my returns, I did exactly what I recommended here. Bought some condos at depressed prices. From each one after all expenses, I get a positive cash flow of $250-$350 a month.

I still own them and when the leases are up I could sell any one of them at my leasure, but in the meantime they bring money in. At my current rate of return, after 6-7 years I will have doubled my money again with no risk. Can gold do that?

Gold can never be worth zero? Well, neither can real estate.

Like I said before, your money is made on the BUY and it is highly speculatory to say Gold is discounted right now.

I have no problem with gold, it's an investment like any other. What I do have a problem with is those pushing gold as a one stop solution for asset protection because it is not. It is a very real possibilty that people will lose their life savings this way.

I say take $40,000 (cash, not financed!)and buy a condo to rent out in an area that rents at $600-$700 a month. After taxes, fees, maint, you should get $250+ a month from your $40,000 investment. And be able to sell 6-7 years later for what you paid or more. How can you beat that for asset protection?


I "speculate" in the stock market and use realestate as asset protection. This is tried and true.

For those who don't want to rent condos, I recommend buying stock in utility companies. Ones with solid financial positions and are diviersifed (electric, water, gas).

Gold is at historic highs and that's enough of a reason for me to stay away. I'd take oil over gold in the next year, but I sure as hell wouldn't put my money in oil or gold and call it "asset protection!"

That's the problem I have with gold OBE1, it's not a safe play for asset protection. Like I said, good for you on your return on investment. Are you still buying at $1400 an ounce though?

reply to post by samkent


Thanks samkent.

Why'd you have to bring up Ford?!

Bought at $1.70 a share, sold at $3.80 a share. Was real happy with my return at the time, but it's over $16 a share now!

Your point on dividends is very, very true and something the average investors should really take into consideration. You mentioned Duke stock (a dividend yield listed at 5.92%)

For those who know very little of investing, I would say pay down secured debt because it will save them money in interest paid. That is the surest thing one can do to protect their assets! For those who want to invest, look at the interest rates on your debt. If one feels pretty confident that they can earn more money from investing than the interest costs on their debt - then they should.

If one can get a dividend higher than what their mortgage rate is than, they could be farther ahead using their money to buy stock instead of paying off their mortgage. Notice, I say could instead of will because the company could always reduce or suspend the dividend at some point.

Look at this list of dividends: www.money-zine.com...

I just don't think gold is the best option for the average middle class investor. It doesn't grow on it's own and it doesn't generate positive cash flow.

samkent, what you said is so true.
If we are talking about people who can't afford to lose their money, buying gold opens them up to a lot of risk that they are not even aware of. That is what I think is so wrong about everyone pushing gold. An honest gold dealer would ask the buyer if they have debt, if the buyer says yes, the dealer should tell them they ought to pay it off before speculating on gold at $1400 an ounce.

Yes I bought into Ford at 2.05 and jumped out somewhere over 7. But I did get smacked around on GM. It was one of those lessens where I learned that even the largest company CAN go bankrupt.
The past 2 years have been the most fun I have ever had in the markets. But since it’s an ‘investment’ you have to look at it every couple of days. Commodities, which gold is, are too volatile for me. And they don’t pay me to sit on them long term which I have to do on some stocks.

Some day one of those doomsday prophets are going to come home from a dinner out, to find their house broken into. All of that gold will have grown legs and walked away. Then it will be a personal doomsday for them.

reply to post by samkent


Damn, you had to bring up GM too! I didn't really lose on GM since I locked in my profit, but what was left turned into nothing.

I understand peoples hesitation and negative associations with the stock market when they watched their 401k's get decimated. That was money they were counting on for retirement. What they have to realize though was so was everybody else. When the baby boomers retire and start cashing in the 401k's en masse, the market will drop because younger workers won't be buying up enough volume to keep up with all the selling.

Everyone is scaling back on their 401k's and investing in general because their wages aren't keeping up with the cost of living. Weaker companies in the market will not be propped up with a flood of 401k money anymore. This doesn't mean that there isn't a lot of money to be made in the market though. Just look for industries that have been beat down for a while but are turning around and pick the leaders in that industry.

If people put their money were the masses turn to next, that will create an eventual bubble also, which is the direction I see gold heading to.

I believe you can put gold on your homeowner's insurance policy, but the policy is expensive. They could put it in a safe deposit box, but the bank has their money again and safe deposit box contents aren't insured. Like you said, gold doesn't pay you to sit on it and (I think) will most likely cost the average investor.

Originally posted by v1rtu0s0
Wow, how much is a tube of silver eagles? Aren't they like 25 bucks a peice?

I got in a little late (Feb 2010) and a tube of 20, 1 oz. Silver Eagles, cost me $320. Now 10 months later the same tube of 20 will cost you around $620. A better return than most stocks, and I won't be left holding a piece of paper. If it becomes worthless as some say here, I can bag it up and clobber some thief over the head with it, when I run out of ammo. I plan to buy more on the dips.

Are folks aware of this?

JP Morgan and the Massive Silver Short

Something else to take into consideration.

reply to post by AP-Chris


I do have an old certificate for 100 shares in the Goldfield Consolidated Mines Company circa 1934 .

Anyone care to help me figure out how much it is worth nowadays?

ANYONE spooking you away from gold has NO idea what they are talking about.

Like I said, do not invest only in gold, silver, platinum and other commodities. They do not go down in value based upon the dollar. The dollar is what is in play. The spooky dudes are resetting the value of the dollar which means that it is going down in value where everything ELSE will stay the same.

You cannot base value on nothing, which what the dollar is, NOTHING. It is a promise to pay, with the QE continuing, the dollar only has one way to go.

10-20% is the safe bet, I would say 20-50% is the smart money and anything above that in your portfolio is risky. But with risk comes reward.

I would say that silver and platinum in relationship to gold are the better bets.

Physical ONLY, the paper is just that, paper.

Gold and Silver have been going thru a pull back however the trend is still bullish. The pull back is because of the current dollar strength which will not last long i.e. usa is still in deep dodo financially. Dollar up; metals down and vs vs. is the play. This time of year is very volital with investors taking profits or losses for tax reasons. Long term trends will continue after the new year. Buying on the pull backs works. I have been buying undervalued Gold "stocks" recently which hopefully bring rewards when Gold starts to head north again. Paramount Gold and Silver (PZG),Eldorado Gold Corp. (EGO) and San Gold Corporation (SGRCF) are a few. I will look at Gold ETF's after the first of the year. When I buy coins, I use a company out of MN. Investment Rarities Inc. | 7850 Metro Parkway | Minneapolis, MN, u can search them..good folks.

reply to post by Surfrat


Those are some strong miners imho, congratulations on your research Surfrat...and what a month for Paramount shareholders with the discovery of the new San Miguel extension. Excellent drill results on this newly discovered strike, and with numerous targets on the property still untested, I see crazy resource potential on this project. Still hold shares from 2006, back when the San Miguel concession was JV'd 70/30 with Tara Gold as the senior partner.

Currently manage 32 companies in my Jr portfolio (you mentioned a couple of them), including a few winners like Colossus Minerals (CSI.TO) purchased Oct 2008. Still holding a core position, and the approx 2000% gain across the past 2 years doesn't include incremental profit taking on my trading share allotment.

After the brutal washout at the end of 08, the past 2 years have been good for this sector...the past 4 months have been great...and thanks to the [misguided] policies of Western central banks, the best is definitely yet to come (*for select companies).

Dated material, but instructive for those who may be unfamiliar with the historical performance of Jr mining/exploration companies.....

Can gold and silver equities expect 5,000% returns again?

*Not investment advice. Anyone entering this speculative sector without benefit of a top-notch reputable subscription service, or without having done abundant personal homework/due diligence, should be prepared to lose every penny of their investment.

I have never bought gold, because it always stays the same value. Only the currency changes. Thus, you're never actually gaining money from gold, except in a short time period where markets haven't adjusted for inflation or currency revaluation (a few days or weeks max).

However, if you do want gold, do not buy from Midas Resources (Alex Jones/Ted Anderson).

This blog post was very revealing about the scams pulled by Midas Resources.

scatattack.wordpress.com...

Also do not buy from Glenn Beck's gold company. They were raided recently for ripping people off.

Go ahead and buy gold/silver. However, when the market is flooded with secret reserves and your investment value is cut in half...you don't have anyone to blame but yourself.

I've never tried it before...but, I hear gold tastes yummy when you are starving.

i bought about 50 silver maple leafs a few years ago, but can't remember what i paid at the time. i thought i would buy some more recently, and started calling around. the coin store at the local mall said they only had 100 oz bars left and some "recognized" silver coins. I said something like, holy cow, it sounds like there is a run on silver. The guy goes, yeah.

So then I called the local bullion and currency exchange and the girl on the phone says they have maple leafs and 10 oz bars (which I wanted). I said great and headed over. I was there within 30 minutes.

When I got there about 4 people were ahead of me in line. The 2 right in front of me were a middle aged couple and a older 50ish-60ish lady. I noted that there was a sign on the window stating they were sold out of US dollars. A few people came and read the sign and left. I also remembered popping buy a few days ago on the Friday and the place was totally packed. The lady on the phone had said that day that the Canadian dollar was really high that day.

So anyways, the lady in front of me ordered like 4000 dollars worth of gold and silver. mostly gold. i was surprised because most people that come to the place are there to exchange/buy foreign currency. i thought, wow, that's kind of odd...

Then, the couple in front of me sat down and asked, so what are your silver prices? They proceeded to order about 14000 dollars worth of silver! i have never seen such a big order! (i don't buy obviously, but you know what i mean!) i didn't get to see all the silver they bought because they went to the nearby bank to get cash while the staff put their order on hold. so, no 10 oz bars left for me. i bought a few silver maple leafs for about 32.83 or something per oz which was a good price because it was 34 just the other day and up again today.

anyways, i thought it was a weird that if I had gotten there just a few minutes before i would have gotten my silver and the fact that both customers in front of me bought way more than i did was really surprising.

....i think i'm going back for more soon....