Observing that gold is bubbly is not the same as "hating on" gold.
Who believes there isn't a Gold bubble right now?
- Thread starter LodeRunner
- Start date
GordonTheGekko
Guest
Yes there is a bubble, obviously since the downgrade Gold was overweight. On Monday I posted as my fb status that saying out of gold (not necessarily shorting it) was a good idea. I also think it's a good indication that a bottom is near, because although the VIX hasn't necessarily collapsed yet, the bears are moving out of Gold like a freight train, a commodity that really never sees price action decline like this. $0.02
GordonTheGekko
Guest
Jealous I'm not in Gold? LOL! Are you jealous you weren't about 190% long TVIX (on margin) before the downgrade like me?
I found this poll interesting...and I have no position in gold.
http://www.gallup.com/poll/149195/A...n&utm_content=plaintextlink&utm_term=Business
http://www.gallup.com/poll/149195/A...n&utm_content=plaintextlink&utm_term=Business
Well, to quote the OP:
"Even ignoring the obvious shortage issues, it's a fucking useless metal.... And eventually the post-apocalyptic peoples of the world would have to one day look up and say 'hey, what's this soft, heavy, ugly yellow crap that we lock in safes or paint silver actually good for again?'"
He did everything but bring out the tired argument that you can't eat gold.
That's an interesting survey. 34% of those polled think gold is the best investment. I wonder what percentage actually owns any gold bullion? I suspect it's a lot less than 34%.
In the past decade gold has been a better investment than the S&P 500. But I wouldn't want to make any bets about the next 10 years.
I'd say it's OK til around 2020 or so. But it will be a very bumpy ride. It always has been and always will be.
This is one arena where you either have to know how to trade, or have the nerve to hold on tight regardless of what happens. There's no in-between here.
Interestingly, though, the overall volatility of gold is actually below that of most stocks. I haven't checked because I'd never trade currencies (I worked at a bank and I know the banks are the market makers in fx, and therefore think any small-timer trying to beat the banks is just crazy) but I suspect its volatility is probably closer to currencies than to stocks or other commodities. Which would, of course, be perfectly logical.
This is one arena where you either have to know how to trade, or have the nerve to hold on tight regardless of what happens. There's no in-between here.
Interestingly, though, the overall volatility of gold is actually below that of most stocks. I haven't checked because I'd never trade currencies (I worked at a bank and I know the banks are the market makers in fx, and therefore think any small-timer trying to beat the banks is just crazy) but I suspect its volatility is probably closer to currencies than to stocks or other commodities. Which would, of course, be perfectly logical.
I was long GLD (P/A, my trading at work had no commodities exposure at all) from 2005 up until two weeks ago. I do believe it's a bubble as the typical "this time is different" has been said more then once.
whores servants one can hire with the same unit of investment at each point in time. So, we go and look for some long-term labor costs and express them in the price of gold. Guess what - gold was a dismal investment over the past 200 years - an unskilled laborer has increased his hourly wage in gold equivalent multi-fold. Knock yourself out on http://www.measuringworth.com/
I, in general, don't get why people have to look for THE one perfect investment. Gold was as good of an investment over the past 10 years as real estate is now. In this business, bears make money, bulls make money but bigs get ...
No, really? A leveraged balance sheet crisis is nothing new, there are records of Romans having one in 80 to 92 BC. So no, I'd keep that macro econ text handy.
Well, here is an interesting question - has gold been a good investment long-term? In my opinion (consistent with many economists), the best way to measure investment properties of anything long-term is to measure how many
I, in general, don't get why people have to look for THE one perfect investment. Gold was as good of an investment over the past 10 years as real estate is now. In this business, bears make money, bulls make money but bigs get ...
No offense but I think your reasoning is flawed.
A leveraged balance sheet isn't something new. Economic models do not date back to 80 BC. LTCM could have been less of a debacle had they expanded their data horizon with only 5 years.
You wanting to look back 200 years ignores that assets have many factors affecting them and to varying degrees - both positively and negatively. The factor at play here is also the one which has made gold a dismal investment for the last 200 years - " economic development/growth". Humans have formed civilisations that rendered unprecedented economic growth. With over-leveraged balance sheets of sovereigns people are questioning both growth and debts' effect on assets. Which in return make people question the gold investment.
If people don't look for the investment/trade that best fit their conviction, what else are they supposed to do? Too a higher degree now, people are looking to have at least some capital left in all scenarios that might unfold the next decade. If you accept that motive then you can go back 2000 years, gold has never lost all its value, several fiat currencies have. Why is real estate any good now? You don't explain this.
Regarding "it's different this time" - it's a cliche. But you know what is also a cliche? People who returns the statement "it's different this time" and thinks it's the same.
I am long gold. It's different this time - Sovereigns are insolvent. It's the same - business laws are law.
