Announcement

Collapse
No announcement yet.

Considering some alternatives to precious metals

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Considering some alternatives to precious metals

    I just found this site on Friday and, having caught up on some of the conversations you all are having, I feel like I'm ready to put forth some new questions. First one is, how do you evaluate the merit of precious metals against other more or less hard assets? Everyone on this forum seems really bullish on gold. I am thinking of two alternatives, (1) timberland and (2) capitalist opportunities in relatively illiquid emerging markets.

    (1) In 2005 I researched opportunities for a small investor to purchase parcels of timberland overseas. I found some businesses in New Zealand which were interested in serving international retail investors. I did not buy in at the time. I am wondering, do precious metals have some inherent benefit that timberland does not (assuming a long holding period)?

    (2) Another example would be capitalist opportunities in relatively illiquid emerging markets. Let me explain what I mean by that, by explaining my reservations with mainstream emerging markets investments. I believe that investing in securities through the mainstream channels is not cost effective. First, by the time investment banks has securitized and productized a particular opportunity, the price of the securities has already been inflated, and can just as well collapse when all prices collapse. Second, the investor ends up paying fees to a bunch of middlemen.

    So, with these reservation in mind, take a look at the really emerging, emerging markets. By the time American investment banks have opened channels for retail investors into a particular stock market, much of the gains have already been had. This happened to Vietnam after 2005, when Marc Faber predicted a bull market there, but as far as I know there is still no easy for non-accredited, retail investors to buy in. It is happening now in the Balkans. I really want to buy shares in East Capital's Balkan Fund, but as a non-accredited investor, the SEC says I cannot. By the time Vietnamese and Serbian stock markets are productized for American investors, these promising opportunities will have turned into dubious hucksterage.

    This I why I am interested in bypassing the financial services complex whenever possible. So here is what I mean by "capitalist opportunities in relatively illiquid emerging markets". I happen to have a family connection to a small, private company in a former Soviet state. Family matters aside, and assuming the company is run responsibly, it seems like an excellent opportunity to transfer capital out of the American miasma, and put it to work in a place that is not overvalued.

    What do you think of this idea, and are there other opportunities out there in public? I am inspired by Kiva, the micro-credit charity. There could be other systems for direct angel investment, for profit investments in profitable enterprises around the world.

    To close, I am looking for feedback on both of these ideas, which seem like plausible alternatives to precious metals, or at least good long term diversifiers.

  • #2
    Re: Considering some alternatives to precious metals

    timberland has historically been a rewarding investment, not correlated with equities. i'd be a little wary at the moment, however, unless you can ascertain how much timberland value is tied up in producing lumber for housing. there's been an anglo-saxon housing bubble -- u.s., u.k, n.z, australia -- and lumber prices might be on the way [further] down.

    as for very early investments in newly emerging markets - big opportunity, big risk. you need to think of it as a speculative piece within your [broader] portfolio.

    Comment


    • #3
      Re: Considering some alternatives to precious metals

      Also be aware of the cross rate between the Kiwi and US Dollar.....The Kiwi's hitting record highs.

      The time to buy in NZ using US Dollars was back in 2000-2001, when the cross was .39-.40 and land was cheap.

      Getting into NZ timber now you'd get double whacked by a poor cross rate and expensive land.

      The harvard University endowment became the biggest landowner here a few years back(around 02-03).....I reckon it was a good idea at the time.

      Just my .02c

      Comment


      • #4
        Re: Considering some alternatives to precious metals

        here are some alternatives:

        base metals (copper, zinc, nickel, etc.)
        uraniam/radioactive elements
        farm land
        oil


        -Just a plug for the last one, while alt-energy may be coming online, it isn't coming online fast enough to replace or even decrease daily consumption of oil. Whether you believe peak oil or not, the fact is that oil production is not increasing anymore, but world demand continues to increase. Oil seems to me like a very, very safe investment for a minimum of 5 years and very safe for 10, with the likelyhood of oil being still a good investment for the next 20, 30, 40, 50 years.

        couple more:

        water
        natural gas
        gemstones
        sugar cane (for making ethanol that actually has been shown to work well eg brazil)


        Final thought, if you have connections in russia, I mean seriously, get in on their oil/nat gas plays. Russia has huge resources and pretty much has europe by the balls, and their salkhalin project also has a lot of the world by the balls too. Russia is like a really freezy saudi arabia with it's oil and nat gas reserves.

        Comment


        • #5
          Re: Considering some alternatives to precious metals

          Following up on one of my first posts here.

          Originally posted by quigleydoor View Post
          I happen to have a family connection to a small, private company in a former Soviet state. Family matters aside, and assuming the company is run responsibly, it seems like an excellent opportunity to transfer capital out of the American miasma, and put it to work in a place that is not overvalued.
          I heard last week that the small business I was eying had to be sold. The local criminal syndicate expressed interest in it, and my cousin had no choice but to sell it for a song.

          Comment


          • #6
            Re: Considering some alternatives to precious metals

            gazp controls export of gas/oil, and so don't expect much incentive for domestic E&P...

            Originally posted by DemonD View Post
            here are some alternatives:

            base metals (copper, zinc, nickel, etc.)
            uraniam/radioactive elements
            farm land
            oil


            -Just a plug for the last one, while alt-energy may be coming online, it isn't coming online fast enough to replace or even decrease daily consumption of oil. Whether you believe peak oil or not, the fact is that oil production is not increasing anymore, but world demand continues to increase. Oil seems to me like a very, very safe investment for a minimum of 5 years and very safe for 10, with the likelyhood of oil being still a good investment for the next 20, 30, 40, 50 years.

            couple more:

            water
            natural gas
            gemstones
            sugar cane (for making ethanol that actually has been shown to work well eg brazil)


            Final thought, if you have connections in russia, I mean seriously, get in on their oil/nat gas plays. Russia has huge resources and pretty much has europe by the balls, and their salkhalin project also has a lot of the world by the balls too. Russia is like a really freezy saudi arabia with it's oil and nat gas reserves.

            Comment


            • #7
              Re: Considering some alternatives to precious metals

              It took me a long time to get into gold... every product has its own dynamic, and until you become comfortable with the product's characteristics, i'd advise you merely observe until you can establish at least a tenuous causality between events and prices. it took me a few months to even get my head around gold... then again, i work alone on my trading and i do it part-time: mea culpa.

              I'm not so sure about timber... i'd be curious to learn more from someone who has real experience in that space.

              as for illiquid emerging markets... hehehe, i've been there before, but don't dare invest without some edge or a willingness to travel and meet mgmt: you can end up losing your shirt otherwise.

              Comment


              • #8
                Re: Considering some alternatives to precious metals

                Russia is great for investments, but you need a political partner - or at least a combination of too small for the big boys/good partnership with local bureaucrats.

                Comment

                Working...
                X