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  • FIRE Buys Ice

    FIRE Buys Ice

    Back when we started talking up gold in August 2001 when the metal traded at $270, if we suggested that some day a large insurance company will buy hundreds of millions of dollars worth of gold to "hedge against further asset declines" we'd have been laughed off the Internet. And then...

    Northwestern Mutual Makes First Gold Buy in 152 Years
    June 1, 2009 (Bloomberg - Andrew Frye)

    Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company’s 152-year history to hedge against further asset declines.

    “Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. “In the Depression, gold did very, very well.”

    Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped $4.80 to $975.50 at 4:03 p.m. in New York.

    AntiSpin: Today, with this announcement, gold officially exited the Early Adopter stage of market development and entered the Early Majority stage.
    We entered at the Innovator stage. We intend to exit during the Late Majority stage when most of the price appreciation can be expected to occur. The dates are, of course, guesses. Our long term gold price target is $2,500.

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    Last edited by FRED; 07-08-09, 06:16 PM.
    Ed.

  • #2
    Re: FIRE Buys Ice

    FRED, are we to assume that the meaning of the text on the right of the graph is as follows:

    "Shaded area under the curve represents the number of NEW gold adopters" ?


    If not, then the graph means that gold will sell-off between 2012 and 2015 at the start of the "Laggards" period.

    Comment


    • #3
      Re: FIRE Buys Ice

      Originally posted by LargoWinch View Post
      FRED, are we to assume that the meaning of the text on the right of the graph is as follows:

      "Shaded area under the curve represents the number of NEW gold adopters" ?
      no. the height of the curve multiplied by a small interval of time along the x axis will be the number of new adopters during that period.

      imagine we read the curve in 2011. the total area under the curve up to 2011 will represent all the holders of gold up to that date.

      Comment


      • #4
        Re: FIRE Buys Ice

        Originally posted by jk View Post
        no. the height of the curve multiplied by a small interval of time along the x axis will be the number of new adopters during that period.

        imagine we read the curve in 2011. the total area under the curve up to 2011 will represent all the holders of gold up to that date.
        Exactly. Look at the VOLUME under the curve.
        Ed.

        Comment


        • #5
          Re: FIRE Buys Ice

          volume?

          I need to get my 3d glasses on.

          Comment


          • #6
            Re: FIRE Buys Ice

            Originally posted by jk View Post
            no. the height of the curve multiplied by a small interval of time along the x axis will be the number of new adopters during that period.

            imagine we read the curve in 2011. the total area under the curve up to 2011 will represent all the holders of gold up to that date.
            I get it now jk thanks.

            In other words and for clarity, in 2011 the total gold adopters will be represented by the area of all past adopters i.e. red + yellow + orange areas.

            We can also assume that iTulip expects about the same/more gold adopters between 2011 and 2013 (light green) than between 2001 to 2009 (red + yellow + orange) combined...
            Last edited by LargoWinch; 06-01-09, 10:38 PM. Reason: area not volume..."geez" (lol)

            Comment


            • #7
              Re: FIRE Buys Ice

              Area, not volume although I couldn't for the life of me tell you the formula

              Comment


              • #8
                Re: FIRE Buys Ice

                Anyone know of a good leveraged way to buy Au?

                Other than taking out another mortgage on the house and burying bullion under it?

                Comment


                • #9
                  Re: FIRE Buys Ice

                  Originally posted by WildspitzE View Post
                  volume?

                  I need to get my 3d glasses on.
                  Okay, area. Geez. What a pack of nit pickers.
                  Ed.

                  Comment


                  • #10
                    Re: FIRE Buys Ice

                    Call me crazy but I would think if you need Au, you don't WANT to be leveraged but maybe I'm old fashioned...

                    Comment


                    • #11
                      Re: FIRE Buys Ice

                      Originally posted by snakela View Post
                      Anyone know of a good leveraged way to buy Au?
                      Here are a few:

                      Futures contract
                      Sell naked puts on futures
                      Buy GLD on margin

                      Comment


                      • #12
                        Re: FIRE Buys Ice

                        Originally posted by FRED View Post
                        Okay, area. Geez. What a pack of nit pickers.
                        FRED, we are slowly learning to appreciate awesome content despite the odd typo.


                        ... I almost forgot; where can I get my $8 credit? ;)

                        Comment


                        • #13
                          Re: FIRE Buys Ice

                          Originally posted by sn1p3r View Post
                          Call me crazy but I would think if you need Au, you don't WANT to be leveraged but maybe I'm old fashioned...
                          Winner, Winner, Chicken Dinner!

                          Leverage kills during de-leveraging, or hadn't you heard?

                          Comment


                          • #14
                            Re: FIRE Buys Ice

                            Originally posted by jtabeb View Post
                            Winner, Winner, Chicken Dinner!

                            Leverage kills during de-leveraging, or hadn't you heard?
                            If you can't kiss it or hug it, you should not own it.

                            Comment


                            • #15
                              Re: FIRE Buys Ice

                              Originally posted by LargoWinch View Post
                              If you can't kiss it or hug it, you should not own it.
                              Alternatively, you can leverage on GLD and use the profits to buy the metal but that assumes you can trade GLD without getting your a** handed to you.

                              Risk, reward, risk, reward...:eek:

                              Comment

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