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Investing in precious metals

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Re: Investing in precious metals

Postby perlick29 » Mon Aug 01, 2011 2:57 pm

I have informed my fiancee and brother in law about your takes on the subject. Could you please interpret this and respond? This is what I have to deal with:

"yeah - these are the same people that said everything was great in 2008, until it wasn't. The DOW went from 14000 to 6550. What stopped it? The printing press. Now $4.00 gas is here to stay and will get worse because of that. The debt deal doesn't matter anymore since it it artificial. The economy is contracting (as per just revised gdp #'s) and things are going to get worse faster. The way to distract from this is a false flag event or maybe a true attack that shakes everyone like 9/11. Wall street was closed for a week if you recall and lost a tremendous amount the days after it opened. People will panic like the snow storm mentality. This time the banks could be shut down(Holiday) "while things are sorted out". The financial advisors and investment bankers are a part of the system. They have a lot of skin in the game. If everyone pulls their money out, they have no job. It's that simple. They don't want you to keep your money, they want to use it for gambling. If they lose big, uncle sam will cover them (2008) and cause massive inflation (2009 TARP, Stimulus, Quantitative easing). The whole point is you do not need the banks. We do not NEED the banks. They need us to enable them. You guys do what you wish, but I know that I am in control of my minuscule wealth. I fear that it won't be more than 2-3 years at best before I will be in a told you so place - not proudly. Just for giggles, have Paul ask his friends about how the purchasing power of his cash and bonds savings has been DEVASTATED by TARP and Quantitative Easing. Both of those crimes were to bail out the investment bankers and financial advisors."
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Re: Investing in precious metals

Postby perlick29 » Thu Aug 04, 2011 2:02 pm

I'm bumping this. Especially on a day like today. Would anyone like to take a shot at a response to the previous post?
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Re: Investing in precious metals

Postby lastingsgriller » Thu Aug 04, 2011 3:14 pm

in all honesty, your brother-in-law has a serious doomsday approach. which you can't really argue with. It's like trying to tell mwier the blue jays suck. he'll always find evidence the prove you wrong. I tend to take the approach that the future will be alright, and America is not going to collapse from the inside out, in which case investing in the government is very safe and rewarding.

it's very hard to talk investment strategies with someone like that because they are thinking outside of basic finance and investment strategies. From his point of view, normal investment strategies are senseless. but, then again, from his point of view, living in America probably isn't a very good idea either.
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Re: Investing in precious metals

Postby RugbyD » Thu Aug 04, 2011 7:57 pm

I don't have time to pick it apart, but one glaring weakness is the claim that we don't need banks. When your monetary system is founded on the fractional reserve system, banks are a necessary fact of life. Whether they are regulated well or not is a different story.

5% in gold is a fine allocation. 10% is ok if it will shut people up.
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Re: Investing in precious metals

Postby lastingsgriller » Fri Aug 05, 2011 1:04 am

RugbyD wrote:I don't have time to pick it apart, but one glaring weakness is the claim that we don't need banks. When your monetary system is founded on the fractional reserve system, banks are a necessary fact of life. Whether they are regulated well or not is a different story.

5% in gold is a fine allocation. 10% is ok if it will shut people up.

'
that was the first thing I noticed was "we don't NEED banks." that wreaks of complete revolution talk. that is no longer an investment conversation and is now a very outlandish political conversation. i don't really know where to begin on that one.
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Re: Investing in precious metals

Postby Madison » Fri Aug 05, 2011 5:28 am

Wow, what kind of family are you marrying into? :-o

Saw this today:

Michael Kay, a financial adviser at Financial Focus in Livingston, New Jersey, talked a client off the proverbial ledge in the morning as the market resumed its sharp downward trajectory. The client wanted to liquidate his portfolio and invest in gold.


Pretty good read, here it is:

http://finance.yahoo.com/retirement/article/113261/stormy-market-advisers-steer-clients

I liked this part and it made me chuckle:

Kay's advice? "If you think it's the end of the world, buy Progresso soup in pop-top cans because it's more valuable than gold. You can't eat gold."


:-b

Anyway, good luck Paul! ;-D
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Re: Investing in precious metals

Postby Curtis Pride » Fri Aug 05, 2011 12:50 pm

It's a human condition. People want to think they time they are important and the time they are living is going to be remembered.

That's why you have so many religious people who think Jesus is going to come back during their lifetimes. That's why they think that every election is the most important ever and why they think every whiff of problems is a crisis of cataclysmic proportions.

Look, if anyone thinks they are smart enough to predict the downfall of the American economy, its financial systems, currency, and banking system, then they should be smart enough to realize that they can make millions doing so. It's not like everyone loses money when the market goes down. There is always someone on the other side of the trade. John Paulson made billions of dollars during 2008-2009 shorting the market. I also shorted the market (though made significantly less than even half that amount) during that time.

If your brother in law is that terrified that everything is going to collapse, then he shouldn't be putting his money in a matress or in silver, he should be shorting financials or the US Dollar. He should be writing calls.

But he isn't, because really, he doesn't know about them. Which should be an indication that he may be out of his element when it comes to financial systems.

The best asset you have is time and compound interest. When the market crashes, you don't sell more. that's when you buy. Gold/Silver has gone up about 10x in the last decade because of fear mongering and because the stock market has traded sideways. Now that these precious metals have gone up 10x, now isn't the best time to buy them.

it's smart to diversify, put some money in bonds, put some money in precious metals, put some money in real estate, put some money in private placements, keep some in money markets, but don't ignore the stock market. Especially after it has gone down so much.

I'm not saying you should double down, but keep up your 401k investment, maybe diversify a bit more than just large cap stocks. Put some money in other geographies like China, Brazil, Russia, India whose economies are growing, put some money in small caps, spread out your money between funds aimed at income and equity appreciation.

Diversification is smart, so I'm not saying avoid metals, but trying to chase appreciation in metals is just as foolish as chasing appreciation in stocks.
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Re: Investing in precious metals

Postby perlick29 » Mon Aug 08, 2011 4:25 pm

Curtis Pride wrote:It's a human condition. People want to think they time they are important and the time they are living is going to be remembered.

That's why you have so many religious people who think Jesus is going to come back during their lifetimes. That's why they think that every election is the most important ever and why they think every whiff of problems is a crisis of cataclysmic proportions.

Look, if anyone thinks they are smart enough to predict the downfall of the American economy, its financial systems, currency, and banking system, then they should be smart enough to realize that they can make millions doing so. It's not like everyone loses money when the market goes down. There is always someone on the other side of the trade. John Paulson made billions of dollars during 2008-2009 shorting the market. I also shorted the market (though made significantly less than even half that amount) during that time.

If your brother in law is that terrified that everything is going to collapse, then he shouldn't be putting his money in a matress or in silver, he should be shorting financials or the US Dollar. He should be writing calls.

But he isn't, because really, he doesn't know about them. Which should be an indication that he may be out of his element when it comes to financial systems.

The best asset you have is time and compound interest. When the market crashes, you don't sell more. that's when you buy. Gold/Silver has gone up about 10x in the last decade because of fear mongering and because the stock market has traded sideways. Now that these precious metals have gone up 10x, now isn't the best time to buy them.

it's smart to diversify, put some money in bonds, put some money in precious metals, put some money in real estate, put some money in private placements, keep some in money markets, but don't ignore the stock market. Especially after it has gone down so much.

I'm not saying you should double down, but keep up your 401k investment, maybe diversify a bit more than just large cap stocks. Put some money in other geographies like China, Brazil, Russia, India whose economies are growing, put some money in small caps, spread out your money between funds aimed at income and equity appreciation.

Diversification is smart, so I'm not saying avoid metals, but trying to chase appreciation in metals is just as foolish as chasing appreciation in stocks.


His take on buying metals now is that we'll be kicking ourselves because they'll be worth double what they are worth now once the economy crashes and the American dollar isn't worth anything. While I don't know what to believe any more (it's a been a head-spinning few months) I do know that a downgrade in credit rating and subsequent stock market downturn today, don't exactly have America's arrow pointing up. I'd like to try investing a bit in other countries currencies but I honestly have know idea how to do that.

The reason he hasn't invested in the things you mentioned is because he wants to hold on to the money he has rather than go out of his element at what he calls "an exponentially bad time like this".
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Investing in precious metals

Postby thedude » Mon Aug 08, 2011 7:31 pm

perlick29 wrote:
Curtis Pride wrote:It's a human condition. People want to think they time they are important and the time they are living is going to be remembered.

That's why you have so many religious people who think Jesus is going to come back during their lifetimes. That's why they think that every election is the most important ever and why they think every whiff of problems is a crisis of cataclysmic proportions.

Look, if anyone thinks they are smart enough to predict the downfall of the American economy, its financial systems, currency, and banking system, then they should be smart enough to realize that they can make millions doing so. It's not like everyone loses money when the market goes down. There is always someone on the other side of the trade. John Paulson made billions of dollars during 2008-2009 shorting the market. I also shorted the market (though made significantly less than even half that amount) during that time.

If your brother in law is that terrified that everything is going to collapse, then he shouldn't be putting his money in a matress or in silver, he should be shorting financials or the US Dollar. He should be writing calls.

But he isn't, because really, he doesn't know about them. Which should be an indication that he may be out of his element when it comes to financial systems.

The best asset you have is time and compound interest. When the market crashes, you don't sell more. that's when you buy. Gold/Silver has gone up about 10x in the last decade because of fear mongering and because the stock market has traded sideways. Now that these precious metals have gone up 10x, now isn't the best time to buy them.

it's smart to diversify, put some money in bonds, put some money in precious metals, put some money in real estate, put some money in private placements, keep some in money markets, but don't ignore the stock market. Especially after it has gone down so much.

I'm not saying you should double down, but keep up your 401k investment, maybe diversify a bit more than just large cap stocks. Put some money in other geographies like China, Brazil, Russia, India whose economies are growing, put some money in small caps, spread out your money between funds aimed at income and equity appreciation.

Diversification is smart, so I'm not saying avoid metals, but trying to chase appreciation in metals is just as foolish as chasing appreciation in stocks.


His take on buying metals now is that we'll be kicking ourselves because they'll be worth double what they are worth now once the economy crashes and the American dollar isn't worth anything. While I don't know what to believe any more (it's a been a head-spinning few months) I do know that a downgrade in credit rating and subsequent stock market downturn today, don't exactly have America's arrow pointing up. I'd like to try investing a bit in other countries currencies but I honestly have know idea how to do that.

The reason he hasn't invested in the things you mentioned is because he wants to hold on to the money he has rather than go out of his element at what he calls "an exponentially bad time like this".

My general rule of thumb is that I don't listen to friends or family on legal matters, financial matters, or medical problems. 99.9% of the time that person has absolutely no idea what they are talking about.
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Re: Investing in precious metals

Postby kab21 » Tue Aug 09, 2011 12:18 am

Have you met with a real financial consultant to discuss your options? Because it sounds like you really want to listen to your brother in law. And he has made outstanding gains recently but that isn't going to last forever. Precious metals are overbought and at some point they will correct and it will be those that bought last that will be left holding the bag.

And this last bad news is creating a buying opportunity in the stock market imo. There is going to be some pain in the next couple of weeks but the smart people will be buying in a couple of months. I still remember '08 and my first thoughts were that it's time to buy but I didn't have any extra cash at the time. Now it might be a different story.
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