Why gold is a bad investment

I remember watching gartman more than a few times over the past 12 months on fast money saying he doesnt like gold, when it was at 1200, 1400, 1500, and 1600. How can he still claim to make these calls?

I don't know much about Dennis Gartman Noah, but keep in mind these guys who show up on CNBC are hawking their businesses. So the gold guys hawk gold, the bond guys hawk bonds and the stock guys stocks..... This is one reason I really hate the network business channels.

Some of those "figures" are paid shills for the big govt/ wall street short cartel. The other one that comes to mind is Jon nadler of Kitco. The press then recycles the"quote from the expert". A classic " shaking of the tree" to scare weak hands.In retrospect it's always very clear. Gold is clearly going way way higher.
This is not a trade at this point but purchasing power survival.

"cartel" implies some coordinated agenda,but really I find CNBC to be evidence of the opposite: none of these pros have a clue as they flit from one flavor of the day or week to another, reverse themselves, and purport all the while to be imparting insightful analysis. Cramer in particular literally can't seem to remember what he said the day before. It's all situational, reactive BS, and they have no clue, because no one does, where the market is going.

It's all situational, reactive BS, and they have no clue, because no one does, where the market is going.

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so why invest based on what they say?

It's fun to watch.

Still another $400 to go before it hits the previous bubble's 1980 high: http://goldprice.org/news/uploaded_images/gold-price-2006-dollars-760170.gif

Back to why I have gold exposure.
I'm largely fixed income with some stock exposure, so gold hedges some tail risk

speaking of intrinsic value...gold does not have it. Guns, dry goods (vodka, coffee, seeds, chocolate, morphine, penicilline, salami) and water distillers have intrinsic value. Oh warm clothing...
What are we talking about? Champagne!

Urbandigs: I subscribed for a short time to Gartman's letter which was very interesting. In the letter he was very positive on gold but he is a trader and would get in and out in a flash. Because I don't trade so many commodities, I stopped subscribing (and it was expensive). I have been slowly legging into gold since November and I still think it will go much higher. My position in probably higher than I would like it to be for safety reasons but there are very few safe choices and right now it is an investment that is working.

The only way that apt23 can possibly discuss something positive is if she puts it into context of something negative.

No surprise from a woman who called the police on her husband in order to get revenge on her neighbor.

Oh BSexposer - come out, come out, wherever you are..........

1700 :)

Oh BSexposer - come out, come out, wherever you are..........

Ed Yardeni put out a good post last week showing the inverse relationship between the price of Gold and the P/E ratio of teh U.S. stock market over time.

http://blog.yardeni.com/2011/08/valuation-gold.html

who cares about these people ( yardeni, gartmann, etcc.....). their knowledge is so limited.
I suggest the real thing: UC Berkeley, private edition of Ralph Foster 2189 Bancroft way Berkeley, ca 94704.
email tfdf@pacbell.net (it cost 29.90 shipping included).
title: fiat paper money : the history and evolution of our currency.
the real thing. real education. and protect yourself.
interesting to see that the clowns (inodada, bse, stevejhx) are nowhere to be found when the shit hits the fan.
Buy some yellow stuff to protect your family. money well spent.

Midtowner, today/tomorrow you suggest buying gold?

Midtowner, this clown here got into his gold position back in the $400's, FYI.

Here's what I've posted in the past on the issue:

Just for yutz, I decided to have some fun on the issue. Sometime around 2005, I found myself with a gold position. A fine chunk of money, but very tiny compared to my net worth. It was trading at $400, so I figured let it ride. It went up to $700 or $800 or whatever it was in 2007. I said to myself, "Well, this is clearly getting nutty. I have no long-term view on gold, so I should sell. On the other hand, I'm always making my 'nutty' call way, way to early." So I've let it ride. It is my tiny experiment in "If you can't beat 'em, join 'em." I'm predicting it'll all end in tears for me ;).

I bought a couple of stocks yesterday at the close and will buy more today, likely early in the day, if anyone cares about what this fool is doing.

Oh BSexposer - come out, come out, wherever you are..........

"interesting to see that the clowns (inodada, bse, stevejhx) are nowhere to be found when the shit hits the fan."

Sorry I was busy during the day yesterday. Told you what I did yesterday at the close, what I was planning on doing at the open this morning, all when prices were flat to yesterday's close. The two stocks I bought closed up 7% and 8% from where I bought, probably won't sell them for many, many years. So that's what I was doing while the shit was hitting the fan. What were you doing?

I'm still around matson - why the hate? I told you to put 100% of your money in GOLD, did I not??? Hold that GOLD tight buddy - it will make you rich rich rich!!!!!

Holding tiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiight $1750+/ounce. It HAS made me rich. How's that investment in BRK.A doin'?

Now I know why the title of this thread is "WHY GOLD IS A BAD INVESTMENT"

"BECAUSE GOLD IS A GOOD SPECULATIVE TRADE"

RS is correct on this thread at least.

hey bse, how has your 3 stock "portfolio" done of recent?
you have produced verbiage galore re this. pls discuss returns. mtd ytd etc
pls provide names. apologies if you've already done so and i missed the post.

BSexposer: GOLD BREAKS $1,800/OUNCE! HOLDING TIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIGHT.

(BRK.A down almost another 5% this week alone - wave hello, or goodbye, as the case may be, to your good friends Mr. Buffet and Mr. Gartman)

gold now more expensive than platinum.

Well the gold trade is clearly a crowded trade at this point. We're up to $1800 and at some point it has to pull back a few hundred dollars, so when it does, do the bears chant victory even though it's up from $300 a decade ago?

Bottoms, what's your point here? Trying to discredit bse? He has discussed returns. He is more than fine with the volatility because this ain't money he needs anytime soon. And he will probably buy more as we hit some really cheap prices (a good thing for the investors who don't wet the bed, like Esteban and presumably yourself). I don't have the time, inclination, or skill to go the 3-stock route, but obviously other people do. Why is that so hard for you to accept?

the gold trade is "crowded"? because the price is up? u gotta be kidding. nobody owns gold. nobody. ask your friends and neighbors. they're about as educated as bse or nada.they own nothing but index funds (or in stupid bse case 3 stocks, including a car stock,lol).or worse fixed income.or the lone inherited, small portion of my net worth, single gold eagle, kind of thing. they will buy gold. in a panic. when they realize their dollar is kaput.
it's not a trade.
it's hyperinflation survival
(fyi i'm up 10mil on the trade since jan)

$10MM. Hmmmmm.. need more data bf patting you on the azz.

Is that your private money or do you earn $200K/yr managing assets as part of team of investors? If so, are you the CIO or just a cog that went with the gold trade?

How much did you start with?

What is the leverage?

What part of your net worth is tied to gold?

Are you down $20MM on your Pulte trade during the same time period?

Do you intend to ride out the first dip in gold, or are you sleeping very little with a hair trigger on the sell button?

Do you intend to take a week vacation to europe in the next month w/o trade access?

Up $10MM in a vacuum don't mean much to me. -shrug- maybe i'm just cynical or I just make most money managers shit in their pants.

it's my money. no leverage. you can easily calculate the capital needed.1/3 of my net worth (with silver). 1/3 real estate.1/3 others. I don't trade it. i've been in it for years. europe has all access you need. I live in europe (and US, and costarica, and asia).I don't have a "job" though I work more than most.
Ive made millions, lost millions. Little emotional impact. Gold has had many dips in this runup. most notably 2006 when my"account" went down "a lot".It was in may and I forgot to look. When I did I was down, mucho dineiro.
I don't think we're near the top. the top will be around dow/gold of 1.
Btw I don't do drugs but I don't judge people who do.

Why do you have to justify that what you do is right?

Hey there BSexposer, gold hits $1900+/ounce....

BRK.A only down -10% in the past month alone.... say hi to WB for me!

The arguments FOR gold seem to be "the price has gone up, thus the naysayers are wrong!" That sounds like a bubble argument to me.

As everyone knows, once interest rates go up (and that may be two years from now) the cost of carrying gold will also go up. This is not some forever sure-fire thing. This is jump in, hope it keeps going up, and hope you sell before the market crashes sort of thing.

There is a zero point zero percent chance gold will have turned out to have been a better investment over the next ten years than say TIPs (even Australian or Swiss TIPs).

"The arguments FOR gold seem to be "the price has gone up, thus the naysayers are wrong!" That sounds like a bubble argument to me."

jason, while I sorta agree with you, what do you make of people who bought gold at ~$800/oz and have recently unloaded it or will do so very near-term? Are they just dumb-luck investors? Are they savvy? Are we dumb for having stayed on the sidelines?

jason - there are always speculators riding any wave, but as bjw2103 says, there have been a bunch of us out there talking about very real reasons why gold was a longer term sustainable trade when it was mid 600s and 700s in 2007-2008. Ive unloaded 80% of my holdings and sold 50% of what I had left late Monday @ 1893 and even posted it here on SE:

http://streeteasy.com/nyc/talk/discussion/27775-us-debt-downgraded-where-do-we-open-monday?last_page=true

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sold 1/2 of my gld holdings late yesterday..this is now the lowest amount of gold that I have since mid 2007 when I started buying. I still have a little, but will only buy if we correct. So if it goes parabolic, I will miss the last run. I do look forward to when gold really falls though because that will mark the final phase of this process and signal that we are on a better road to sustainable growth in time."

I didnt know it was going to fall like this, guess lucky on timing but I know I wanted to get to the lowest exposure to GLD since 2007 when I first starting buying. I do look forward to when gold really falls though, because that in my opinion, will be a sign that we are heading on the right track. Although I still think its possible, I do not want or wish for $2500 gold. If it runs up now, I wont make much with the little holdings I got left

I don't get the confusion. Gold is a hedge.
Today Gold & Bonds are down and stocks are up. Peoplare taking the hedge off.
*
That and gold was going parabolic, so naturally people are lightening up

Fiat printed money is worthless and not backed by anything. Anyone who says gold has no value doesn't understand our monetary system and should watch this video:

http://www.youtube.com/watch?v=tj2s6vzErqY&annotation_id=annotation_936695&feature=iv

It's an hour and a half. It's not trying to sell you anything. The analysis is spot on. Too many ignorant people don't understand that currencies and gold all have relative value. You can't print gold but you can make as many $US as you want. Gold is going up, and eventually, after the system is fixed or replaced it will come back down. But for now, gold and silver are great "investments" as they help you maintain your purchasing power as the $US collapses. Just watch the video. One of the best out there on the topic. If you don't have the time to watch this, then you don't really care about this topic.

bravo bravo to all you gold traders.... bravo bravo.... now what will you do with all that money you made investing 1.5% of your net worth?

FYI, prior to the bubble in gold, most portfolios contained 1.5% gold exposure... so even with it tripling of that stuff your net worth hasn't budged given the bloodletting in home prices (which was the biggest component of one's net worth)......

So LET'S just keep this BUBBLE shit in perspective.... but do carry on. FLMAOZzzzzzzzzzzz....

and when tulips 4x in the next week, we'll have all the playas trash talking about how they were ALL IN. Bullshit.

flmaojsodjsnaluiisawexzzzzzzzxxxyyzzz

gold prices plummeting! Someone should check on Glenn Beck. Tell him not to jump.

"Gold posts biggest drop since 1980 on Fed fears"

http://finance.yahoo.com/news/Gold-posts-biggest-drop-since-rb-1519504637.html?x=0&.v=3

"jason, while I sorta agree with you, what do you make of people who bought gold at ~$800/oz and have recently unloaded it or will do so very near-term? Are they just dumb-luck investors? Are they savvy? Are we dumb for having stayed on the sidelines?"

Yes, yes, and yes. Just as savvy (and/or dumb) as someone who bought Yahoo in 2006 and sold it December 1999.

Step right up ladies and gentlemen.
Step right up.

See our talking ape. Only $2 to see him talk. $5 to get a prediction on Manhattan real estate. 1/8 ounce of gold for it to predict the price of gold tomorrow.

See our talking ape folks. Step right up, step right up to our show on west 67th street.

Buying Yahoo stock in 2006 and then selling it in 1999 is truly remarkable.

I meant 1996.

I'm gonna miss ud. He made enough money on his gold trade to shut his website down.

Man, I wished I could've retired on my tulip trade.

"...Gold Extends Biggest Slump in 18 Months...

...“Gold is a trade, gold is a position, gold is volatile, but gold is not safe,” Dennis Gartman, an economist, wrote today in his Suffolk, Virginia-based Gartman Letter. “The public is involved in gold, and the cab drivers of the world have bought into it. Now they are being taken out, at high cost...."

http://www.bloomberg.com/news/2011-08-25/gold-extends-biggest-decline-in-18-months-after-cme-raises-futures-margins.html

Ill miss u too w67th...flmansoodfjhskwwkhdskwsswswqaxsefrzzzzzzzzzzzzzzzzzzzzz

An ape holding a tulip. Thats like one of those cute pictures you see online, as long as you ignore the reality that the ape was just flinging feces before finding the tulip.

How is gold @ 1763 reflective of a slump?

Gold up $50 today. RISK OFF!

"BSE has no financial understanding. Quite hilarious comments to read actually"

Heh.

Well the reason for latest Gold pullback surprised me a little. Apparerently there's such a huge rush for dollars by the banks that they are selling anything and everything to meet their short term liquidty needs which itself is quite scary. see today's FT

http://www.ft.com/intl/cms/s/0/a234dcf8-e801-11e0-9fc7-00144feab49a.html#axzz1Z4UZN1Hu

"Holding tiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiight $1750 /ounce. It HAS made me rich. How's that investment in BRK.A doin'?"

BRK Buyback :)

Wait...RS says banks want dollars more than gold...WHAT!?!!?!?!?

"...Flight From Gold Continues

Metal falls below $1,600 as dollar strengthens...."

http://www.forbes.com/2011/09/26/gold-plunges-on-economic-debt-concerns-marketnewsvideo.html?partner=yahootix

I love it: the little boys wake up when gold is down. and down it is. and silver....I can't even look up quotes. I lost a few mil last week. It hurts. but i've been thru that a few times in the last few years and yes bought more silver today. a lot of it.half a ton .
Ssim has a good educational link there for those who care to preserve their future.good luck to everybody.this is a very good entry point for those who don't have a position yet.
for others CNBC is good entertainment.

40 years of Paper Currencies and we're seeing the result-Bill Fleckenstein

http://www.youtube.com/watch?v=IohLOfkUl6o

"Glenn Beck-Approved Goldline Charged With 19 Criminal Counts Of Fraud And Theft...

...The complaint alleges that Goldline “runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims,” according to a statement released by the consumer affairs division of the Santa Monica City Attorney’s office.

The company has been charged in the court filing with misdemeanors that include theft by false pretenses, false advertising, and conspiracy, the City Attorney’s office said. In addition to the charges against the company, the complaint accuses former CEO Mark Albarian, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard of defrauding customers. Current CEO Scott Carter is accused of making false or misleading statements. ..."

http://abcnews.go.com/Blotter/goldline-execs-charged-fraud/story?id=14857253&page=1

i prefer paper dollars as u can both eat them and wipe ur ass with them. u can do neither with gold which is why the $ is the best investment

Great thing about paper money. Gov't can always make more.....

http://www.zerohedge.com/news/us-plans-issue-846-billion-treasurys-next-6-months-35-more-previous-year

In other words, the US Treasury is planning on issuing 35% more in the first half of the fiscal year than a year previously, even though this time last year the Fed was monetizing all gross issuance, and even though the European EFSF was not about to ramp up issuance and soak up hundreds of billions of excess fixed income targeted capital.

>i prefer paper dollars as u can both eat them and wipe ur ass with them. u can do neither with gold which is why the $ is the best investment

That's the type of perverted nonsense we expect to hear from Wbottom. Please try to keep streeteasy clean.

Roubini’s six-point case, in his piece for Project Syndicate:
1.Gold spikes in times of serious economic, financial and geopolitical risks — think “financial Armageddon.” But that doesn’t make it such a safe investment, says Roubini, noting sharp falls in gold prices during crisis periods of 2008 and 2009.
2.Gold performs best in times of high inflationary risks, as its popularity grows under the view that it is a hedge against inflation. But even after aggressive monetary policy by central banks, he says, global inflation is low and dropping further, and commodity prices are adjusted downwards.
3.Gold provides no income. With equities, you get dividends; with bonds, coupons and with property, rent. Now that the global economy is recovering, other assets are providing higher returns — so who needs gold, which has “vastly” underperformed since early 2009 versus stocks, he asks.
4.Real rates are headed higher on the view that the Federal Reserve and other central banks are going to back out of quantitative easing and zero-policy rates. “The time to buy gold is when the real returns on cash and bonds are negative, and falling,” and that’s not now, he says.
5.Highly indebted sovereigns are not pushing investors towards gold and away from their bonds. In fact, many of these governments have high stocks of gold, which they may dump to cut debt. Italy, for one, could be tempted to pare back on its huge holdings.
6.Political conservatives in the U.S. have hyped gold so much that it’s become counterproductive. “For this far-right fringe, gold is the only hedge against the risk posed by the government’s conspiracy to expropriate wealth,” he says.

nyc1234
about 22 months ago
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i prefer paper dollars as u can both eat them and wipe ur ass with them. u can do neither with gold which is why the $ is the best investment

Do you eat your paper dollars before or after your wipe your ass with them?