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Login to post Forums » Off-topic discussion » Selling gold

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March 29, 2011 7:44 p.m. 93gsxturbo HalfDork

huge-O-chavez wrote:

In January 1980. invest $1000 in Gold and $1000 in IBM common stock.

Share price IBM in 1980 = ~$68 I buy about 14 Shares.

Gold price is around $850/oz in Jan 1980. I buy about 1.2 oz's of gold.

Current Value of IBM stock, with divdends reinvested = $20k

Current Value of Gold = $2k

Even if you were to miss 1980 gold bubble and buy say in '82 with gold at $300/oz your're still only going to own say 3oz's.. Which would be like what.. $4500 today..

Sure.. Gold gains money. It is an investment vehicle.. It is just a poor one. (my numbers are kept rounded and generous to give gold the benefit of the doubt)..

Thats a perfect solution if you can predict the future.

Invest $1000 in the next big thing in 1982 and have it go tits up and tell me how you did.

Gold is a safe, predictable investment that traditionally offers a higher return than a savings account, and its relatively liquid.
March 29, 2011 7:52 p.m. Curmudgeon SuperDork

Actually, both are correct but Apis is more correct. If the dollar gets stronger, gold could quite possibly drop in value. It's happened before.

FWIW, when I was a kid it was around $40 an ounce. If I had had $10k to invest in gold then.... but of course inflation (which is what drives the higher price of everything, including gold) would have gobbled up most of the gains. That's the way of the world.
March 29, 2011 7:54 p.m. Apis_Mellifera New Reader

If your point of view is limited to one US dollar and your only goal is to make more US dollars, then by all means buy more intangibles in the stock market. If you want assets that actually mean something long term on the global market, then invest in something that has global value. My original point, which Mr Ego missed, was and still is that gold in a good investment providing you aren't treating it as a stock investment...which Mr Ego did.
March 29, 2011 8:00 p.m. huge-O-chavez SuperDork

93gsxturbo wrote:

Gold is a safe, predictable investment that traditionally offers a higher return than a savings account, and its relatively liquid.

If I invested $1000 in International Paper Jan 1 1980, and kept it in, I'd have $3000+ now. (hint the stock has been sucking lately cause paper usage is down).

If I invested $1000 in gold Jan 1 1980, I'd have $2k now.. Thats a CAGR of 2.34%.. Sure it's better than a savings account, but barely.... A 30 year bond will give you 4.5% now..
March 29, 2011 8:06 p.m. huge-O-chavez SuperDork

Curmudgeon wrote:

FWIW, when I was a kid it was around $40 an ounce. If I had had $10k to invest in gold then.... but of course inflation (which is what drives the higher price of everything, including gold) would have gobbled up most of the gains. That's the way of the world.

If you put that money in Coke, you'd have even more now.
March 29, 2011 8:09 p.m. Apis_Mellifera New Reader

You seem to be having troubling thinking beyond the US dollar. Let's try this, Jim has two bananas... oh, never mind. "You're Right". There ya go.
March 29, 2011 8:23 p.m. 93gsxturbo HalfDork

huge-O-chavez wrote:

Curmudgeon wrote:

FWIW, when I was a kid it was around $40 an ounce. If I had had $10k to invest in gold then.... but of course inflation (which is what drives the higher price of everything, including gold) would have gobbled up most of the gains. That's the way of the world.

If you put that money in Coke, you'd have even more now.

Last time I put $10k into coke I had one hell of a week in Vegas.
March 29, 2011 9:07 p.m. keethrax Reader

huge-O-chavez wrote:

93gsxturbo wrote:

Gold is a safe, predictable investment that traditionally offers a higher return than a savings account, and its relatively liquid.

If I invested $1000 in International Paper Jan 1 1980, and kept it in, I'd have $3000+ now. (hint the stock has been sucking lately cause paper usage is down).

If I invested $1000 in gold Jan 1 1980, I'd have $2k now.. Thats a CAGR of 2.34%.. Sure it's better than a savings account, but barely.... A 30 year bond will give you 4.5% now..

As long as you're going to reply based on single stocks chosen after the fact, your replies are next to useless. Finding a specific stock after the fact to meet just about any reasonable growth rate is easy.

But don't lie to us and pretend that while you're doing that you're being remotely reasonable.

Note: I'm not even saying you're wrong re: gold. I am just saying your method of "proving" it is absurd.
March 29, 2011 9:36 p.m. huge-O-chavez SuperDork

keethrax wrote:

Note: I'm not even saying you're wrong re: gold. I am just saying your method of "proving" it is absurd.

actually, I wasn't really chosing the stocks based upon performance. I was chosing those who didn't split too many times or become amalgamted into other corporations. For example, Douglas Aircraft, who became Mcdonnell Douglas and then part of Boeing..

It was merely a selfish device to make the math easy... :-0

If you want to look at indices as an indication of overall growth in the market, I think on an annualized basis you will find more growth in the stock market vs say gold purchased on a spot buy..
March 29, 2011 10:25 p.m. fasted58 Reader

What are they paying for 1 oz. Krugs these days?
March 29, 2011 10:42 p.m. xd Reader

Back on topic http://www.midwestrefineries.com/ They are legit you can send it in and sell it for bars or money. Don't sell it to a "we buy gold" place you will get screwed. I did the "we buy gold" crap for awhile big profit to much work.
March 29, 2011 10:42 p.m. 93EXCivic SuperDork

93gsxturbo wrote:

huge-O-chavez wrote:

Curmudgeon wrote:

FWIW, when I was a kid it was around $40 an ounce. If I had had $10k to invest in gold then.... but of course inflation (which is what drives the higher price of everything, including gold) would have gobbled up most of the gains. That's the way of the world.

If you put that money in Coke, you'd have even more now.

Last time I put $10k into coke I had one hell of a week in Vegas.

I didn't know Charlie Sheen was on this board.
March 30, 2011 5:07 a.m. huge-O-chavez SuperDork

Apis_Mellifera wrote:

You seem to be having troubling thinking beyond the US dollar. Let's try this, Jim has two bananas... oh, never mind. "You're Right". There ya go.

Part of me wants to say that mitigating my risk vs currency is smart; However the other part wants to say that betting against the value of the dollar, is a self-fulfilling prophecy.
March 30, 2011 6:12 a.m. szeis4cookie New Reader

I'm in the "gold is just another investment vehicle" camp and here's why. It's been touched on earlier in the thread - gold has little intrinsic value. This is because it's not all that scarce. Gold can't be eaten, or burned for fuel. Other than its industrial uses (such as in electronics), the only thing gold does is look pretty. So then why does it have value? The same reason why paper money has value - because you can trade it for goods and services. Think of gold as a currency, like the Euro or the pound.

If you believe that the US dollar will weaken relative to other currencies as time goes on - then maybe you want to hold onto gold, because that will serve you well as an inflation hedge (weakening dollar = inflation on everything imported into the US). If you believe the opposite, then you want to short gold, because as the dollar strengthens the price of gold will come down (just like currencies).
March 30, 2011 6:25 a.m. aussiesmg SuperDork

IMHO Gold value is already over inflated, look at the graph posted and the current value means it has inflated 100% in just 2 years. Silver has always been about 10% of Gold's value until recently when it has been left far behind.

One mans view is that Gold is due to drop significantly in value, I suspect this will happen once our "recession" begins to turn around.

IMHO Cash it in and buy Silver. As at this time silver is valued at $37.59 per ounce.
March 30, 2011 6:27 a.m. aussiesmg SuperDork

Seller beware

http://www.reuters.com/article/2011/02/18/idUS176598+18-Feb-2011+PRN20110218
March 30, 2011 8:25 a.m. flountown Reader

I think too many people are focused on the word investment. Buying gold shouldn't be looked at that way. If you want to purchase gold, you are simply maintaining your buying power.

As some hear have already stated, the price of gold is linked to the declining USD. Although it happens at a slower rate, most goods and services will eventually increase in price as well. Meaning that gold that you purchased, when cashed out after an increase, should still allow you to purchase goods and services of equivalent levels to when you 'invested' in gold.
March 30, 2011 7:33 p.m. Curmudgeon SuperDork

Hmph. To me gold is the Beanie Babies of the current era.

There is no truly safe investment haven. Huge-o mentioned Coke; yeah it would have been a good investment BUT that's with 20/20 hindsight.

With some fairly minor management stupidity or a major product scare they could just as easily gone the way of Enron.

Or sometimes things just go to hell due to rumors. Remember those crown air fresheners from the early to mid '90's?

Someone started the rumor that the profits from those were being funneled to the KKK. Bing- sales fell to nothing. http://www.snopes.com/business/alliance/crown.asp

Procter and Gamble had to change their trademark because of a similar problem.

Everything is worth only what it's perceived to be worth. That perception is based on what's happening in the world at the moment. When things change, so do those values. For instance, pepper was worth its weight in gold (ha! ) for centuries. Now it's dirt cheap.
March 31, 2011 12:11 a.m. 4eyes HalfDork

Women have always traded Bob Costas for gold, good chance they always will.

There is a reason everything's value is compared to gold.
March 31, 2011 8:20 a.m. Otto Maddox HalfDork

In reply to 4eyes:

Dem is some cheap women. Clean ones go for diamonds.
March 31, 2011 9:33 a.m. 1988RedT2 Dork

Hey, diamonds! Now there's a good investment...

EDIT: Hey, youse guys seen the price of gold lately? $1500/oz. is just a few days away. Anybody want to bet it sees $2000/oz. in 12 months?

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