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Gold will always underperform the S&P500
- Thread starter KINGOFSHORTS
- Start date
gold is doing bad today.
Not if you took part in the $7billion in straight preferreds of Fannie Mae that were WIPED OUT by the gov't.
or BSC
or LEH
The US gov't has rewritten the law of the land and that has always marked the top of civilizations.
Gold will have value as long as the nation is obedient and follows the law of the land. Once the nation has the perception that it is gov't vs the people, it's all men for themselves. All the money in the world, all the working out and special training means sh*t to a bullet.
or BSC
or LEH
The US gov't has rewritten the law of the land and that has always marked the top of civilizations.
Gold will have value as long as the nation is obedient and follows the law of the land. Once the nation has the perception that it is gov't vs the people, it's all men for themselves. All the money in the world, all the working out and special training means sh*t to a bullet.
Quote from KINGOFSHORTS:
If you invested a 10K in the S&P in 1985 it would be worth 60383.4974
10K in gold at 300Oz would be worth 40,666
And I am not even including the dividends payed out by SPY which with compounding would make the total return higher than 60383.4974
Gold has a negative carrying cost as well.
Buying gold today is like buying gold in FEB of 1980.
A Goldbug loading up in gold in Feb of 1980 (10K dollars)
10K in 1980 = 12.5 ounces (800 an ounce)
10K in 1980 in S&P500 basket = 86.92 units
10K today at spot 1220 = 15250 dollars
10K today at S&P 1105.98 = 96,131.78
and this is not including dividends or reinvestment of dividends.
Infact the best time to buy into the S&P 500 is when
the markets sell off and no one is interested in stocks and when gold hits peaks.
High gold prices low S&P = buy S&P
There is no economic sense to hold gold with its wide bid/ask prices, low liquidity and opaque price discovery(all based on hype and manipulation)
S&P500 represents an investment in a basket of fractional ownership in productive assets.
Longterm bearish gold
Longterm bullish S&P
I just want to clarify things because I am getting lots of calls about putting entire IRAs into gold etc.. from folks hearing too much on the TV/Radio about gold.
I certainly don't agree with putting 100% of an IRA or savings into precious metals, but your examples show a clear bias. 1981-2000 is the best 20-year period for stocks ever, and it was a horrible time for gold. Your examples play on both anomalies. Why not also compare the Nikkei since 1990 to gold? You donât think the same thing could happen to U.S. stocks over 20 years? We've already had 12-13 years of almost no gains and declining dividends.
I don't think gold was ever a good investment.
Reasons:
1) Cost money to store it
2) Doesn't generate interest/dividend
3) Many safe haven substitutes
4) Doesn't impress the ladies as much as diamond does (Women never goes, "Check out the gold on this ring" to their friends)
5) Costly to verify if it is real or not
Gold had a good speculative run. It is done.
Reasons:
1) Cost money to store it
2) Doesn't generate interest/dividend
3) Many safe haven substitutes
4) Doesn't impress the ladies as much as diamond does (Women never goes, "Check out the gold on this ring" to their friends)
5) Costly to verify if it is real or not
Gold had a good speculative run. It is done.
Quote from Pension_Admin:
I don't think gold was ever a good investment.
Reasons:
1) Cost money to store it
2) Doesn't generate interest/dividend
3) Many safe haven substitutes
4) Doesn't impress the ladies as much as diamond does (Women never goes, "Check out the gold on this ring" to their friends)
5) Costly to verify if it is real or not
Gold had a good speculative run. It is done.
Heh. We'll see. Given your user name, I'm not surprised you're a gold skeptic who believes the 80's-90's are some sort of economic status quo. I imagine this thread will be re-surface at some point, though...
Quote from MKTrader:
Heh. We'll see. Given your user name, I'm not surprised you're a gold skeptic who believes the 80's-90's are some sort of economic status quo. I imagine this thread will be re-surface at some point, though...
I never said anything regarding economic status quo, but I wouldn't be surprised if gold price goes back below $1000 as a result of overselling.