Gold Not Getting Killed!!!

[nero3]

Re: Gold Not Getting Killed!!!

It has no utility.

Katsenelson knows nothing, and Buffett is not to be trusted.
Buffett is a leader of lemmings.

I think Buffet don't like gold. It's not something he can hold "forever" and make money on. He rather want to own businesses that make money and don't rely on market timing, like gold that does nothing, and is a greater fool game of speculation. If there is terrible inflation, the businesses that are of good quality, will be able to pass that inflation on, and thus make more money. The businessman that own a good business will therefore don't loose out to inflation. However the wait can be long, all to after inflation peaks before stocks start a secular bull, and the value MR market set to those stocks start to rise, but for the intelligent businessman that does not matter as the businessman are making a living from the income stream of that business, not living to sell off more and more of his gold. For the patient investor the return from holding those quality stocks, including dividends will almost certainly outperform gold over a longer time period like 30-40 years.

A very interesting thing about the DOW, is the divergence between the Q ratio, and the Price to book ratio on the DOW. I think there will be an upward adjustment of book values similar to after 1950, as described by buffet in his 1979 Fortune article. But first we might go through a further cycle of inflation similar to what happened during WW2 (or the late seventies), Unless it's ready to be a bull now.

I also like to add that when long term interest rates peaked at as high they did in 81 it was an exception. The usual level in the past, before secular bulls, was around 6 %, like before the roaring twenties. I don't interest rates have to peak at such high levels as in 81 again, before there is a secular bull.

[metalman]

Re: Gold Not Getting Killed!!!

I think Buffet don't like gold. It's not something he can hold "forever" and make money on. He rather want to own businesses that make money and don't rely on market timing, like gold that does nothing, and is a greater fool game of speculation. If there is terrible inflation, the businesses that are of good quality, will be able to pass that inflation on, and thus make more money. The businessman that own a good business will therefore don't loose out to inflation. However the wait can be long, all to after inflation peaks before stocks start a secular bull, and the value MR market set to those stocks start to rise, but for the intelligent businessman that does not matter as the businessman are making a living from the income stream of that business, not living to sell off more and more of his gold. For the patient investor the return from holding those quality stocks, including dividends will almost certainly outperform gold over a longer time period like 30-40 years.

A very interesting thing about the DOW, is the divergence between the Q ratio, and the Price to book ratio on the DOW. I think there will be an upward adjustment of book values similar to after 1950, as described by buffet in his 1979 Fortune article. But first we might go through a further cycle of inflation similar to what happened during WW2 (or the late seventies), Unless it's ready to be a bull now.

I also like to add that when long term interest rates peaked at as high they did in 81 it was an exception. The usual level in the past, before secular bulls, was around 6 %, like before the roaring twenties. I don't interest rates have to peak at such high levels as in 81 again, before there is a secular bull.

wow. another stunningly simplistic, fact-free and clueless comment. are you sure ej didn't plant you here to amuse us?

[TRake]

Re: Gold Not Getting Killed!!!

Yeah, there are many logical problems in that post. I would lmao if someone like Obama or Summers came out tomorrow and said: "We have our exit strategy! It will only involve 6% fed funds rate!!! To accomplish this we are going to start over, burn all the dollars and base our new currency on ______!!!!!!"

You fill in the blank. I would prefer dollars based on baseball cards because I have too many of those. I was young not too long ago.

TRake

[medved]

Re: Gold Not Getting Killed!!!

I think Buffet don't like gold. It's not something he can hold "forever" and make money on

He is too big to buy. Even "small" purchase by his standards will shake the market. When he bought some silver (again, going "small"), it went from about $5/oz to $8/oz in no time. He will never tell you, what he really thinks about gold, why would he disturb the status-quo.

[metalman]

Re: Gold Not Getting Killed!!!

He is too big to buy. Even "small" purchase by his standards will shake the market. When he bought some silver (again, going "small"), it went from about $5/oz to $8/oz in no time. He will never tell you, what he really thinks about gold, why would he disturb the status-quo.

Buffett on gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

Buffett the gold moron.

[LargoWinch]

Re: Gold Not Getting Killed!!!

Buffett on gold in 1998 at Harvard: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

Buffett the gold moron.

Metalman, are you not a bit too though on the Sage of Omaha?

Think about the alternative!

"It comes in abundance from trees with little to no efforts, we print as many as we want and assign whatever "value" to it, but we make certain that it contains official looking faces and logos so that we can pay people (yes, with "it") to stand around guarding it."

[metalman]

Re: Gold Not Getting Killed!!!

Metalman, are you not a bit too though on the Sage of Omaha?

Think about the alternative!

"It comes in abundance from trees with little to no efforts, we print as many as we want and assign whatever "value" to it, but we make certain that it contains official looking faces and logos so that we can pay people (yes, with "it") to stand around guarding it."

i'm only quoting the guy... that's what he said. staggering ignorance for a guy who's responsible for running billions of bonars of other people's money.

[LargoWinch]

Re: Gold Not Getting Killed!!!

i'm only quoting the guy... that's what he said. ...

MM, I agreed with you the first time around; no need to go on the defensive.

My quote regarding the "Sage of Omaha" was intented to be sarcastic... Next time I will make sure to add this: :rolleyes: (btw, could we set-up another symbol for sarcasm? this one is kinda...dull.)

[Munger]

Re: Gold Not Getting Killed!!!

i'm only quoting the guy... that's what he said. staggering ignorance for a guy who's responsible for running billions of bonars of other people's money.

I'm going to have to disagree. While I hold some gold, I agree with Buffet that it is no more than a greater fool game since it truly has no utility. Yes yes yes, I know it has history, central banks hold it, harder to make than dollars, yes yes yes. But still, you are essentially banking on a political and speculative calculation that someone else will trade you something of use for it.

Which, I might add, is not a bad bet given the alternatives - it is just not what Buffet is about. He prefers to own businesses that make something that people want (and prefers to own the whole thing so he controls it - not just part of the stock of some business that someone else is running/looting). And I must say, given the choice between a great business that has solid long-term prospects and a chunk of metal, I would choose the former.

Unfortunately, I can't seem to get my hands on an entire business for a price I can afford. Also unfortunately, it is hard to get a small piece of a business that pays dividends and is not constantly at risk of being looted by management. So I will buy gold. C'est la vie.

[TRake]

Re: Gold Not Getting Killed!!!

http://geology.com/minerals/gold/uses-of-gold.shtml

first return on a google search

[FRED]

Re: Gold Not Getting Killed!!!

I'm going to have to disagree. While I hold some gold, I agree with Buffet that it is no more than a greater fool game since it truly has no utility. Yes yes yes, I know it has history, central banks hold it, harder to make than dollars, yes yes yes. But still, you are essentially banking on a political and speculative calculation that someone else will trade you something of use for it.

Which, I might add, is not a bad bet given the alternatives - it is just not what Buffet is about. He prefers to own businesses that make something that people want (and prefers to own the whole thing so he controls it - not just part of the stock of some business that someone else is running/looting). And I must say, given the choice between a great business that has solid long-term prospects and a chunk of metal, I would choose the former.

Unfortunately, I can't seem to get my hands on an entire business for a price I can afford. Also unfortunately, it is hard to get a small piece of a business that pays dividends and is not constantly at risk of being looted by management. So I will buy gold. C'est la vie.

The average retail stock buyer is speculating that the shares of businesses that they own make something that people will continue to want, and that the company or companies invested in are the best at meeting that want. For the average investor, buying stocks is every bit as speculative as buying commodities.

A stock index is no less vulnerable to inflation or other macro economic effects than commodities.

Warren Buffett is not your average investor. He has a team of analysts who methodically analyze markets to pick growing markets, pick likely leaders in those markets, then meet with management of likely leaders to determine which is most likely to succeed.

The retail investor has none of these risk eliminating tools.

The retail investor's purpose in the market is to drive up the prices of stocks that insiders like Buffet own, and to get left holding the bag when insiders determine that it's time to sell.

[Munger]

Re: Gold Not Getting Killed!!!

The average retail stock buyer is speculating that the shares of businesses that they own make something that people will continue to want, and that the company or companies invested in are the best at meeting that want. For the average investor, buying stocks is every bit as speculative as buying commodities.

A stock index is no less vulnerable to inflation or other macro economic effects than commodities.

Warren Buffett is not your average investor. He has a team of analysts who methodically analyze markets to pick growing markets, pick likely leaders in those markets, then meet with management of likely leaders to determine which is most likely to succeed.

The retail investor has none of these risk eliminating tools.

The retail investor's purpose in the market is to drive up the prices of stocks that insiders like Buffet own, and to get left holding the bag when insiders determine that it's time to sell.

Exactly. The days of paying out the profits to the shareholders via dividends seem long gone. Until then it's all speculation to me.

[ax]

Re: Gold Not Getting Killed!!!

This is why it's laughable when these billionaire investors tell us where and how we should be investing on MSM outlets. Derivatives are a time bomb (except that I own $67 billion worth), Goldman is a great buy (when they give you guaranteed warrants and 5% interest), I'm buying distressed debt (Wilbur Ross)....like any normal investor could have access to those benefits/conditions.

[TRake]

Re: Gold Not Getting Killed!!!

This is why it's laughable when these billionaire investors tell us where and how we should be investing on MSM outlets. Derivatives are a time bomb (except that I own $67 billion worth), Goldman is a great buy (when they give you guaranteed warrants and 5% interest), I'm buying distressed debt (Wilbur Ross)....like any normal investor could have access to those benefits/conditions.

Exactly. Contradictions are a sign. MSM is the devil!

[audrey_girl]

Re: Gold Not Getting Killed!!!

This is why it's laughable when these billionaire investors tell us where and how we should be investing on MSM outlets. Derivatives are a time bomb (except that I own $67 billion worth), Goldman is a great buy (when they give you guaranteed warrants and 5% interest), I'm buying distressed debt (Wilbur Ross)....like any normal investor could have access to those benefits/conditions.

I always thought the most impressive thing about Buffet was his PR skills. Amazing how he is treated in the press. Good ole folksy Warren.

Obama's political skills while impressive, pale in comparison to the Oracle of Omaha.