Finance/Investing ITT

[87e30]

(ever read a balance sheet? ZZZZZZZZZZzzzzzzzzzzzzz).

As an accounting student I will second this, haha.

Pretty good level headed in advice in here. My finance teacher (worked on wall street in the past) was saying similar things. Diversify in a market portfolio and relax. Trying to beat the market is a recipe for failure. Just look at the hedge funds...

[Farbin Kaiber]

You really think there is gonna be a bubble on a limited resource? That's like saying the oil bubble is gonna pop and we will be back to 99c/gal. for fuel.

[z31maniac]

You really think there is gonna be a bubble on a limited resource?

You really think there isn't?

[nando]

Investing in anything that yields a return in "dollars" seems like a risky move to me these days ;)

so I suppose working for dollars is risky too? ;)

if you really want to hedge, how about commodities that have real uses? like I dunno, oil, steel, copper, etc? or even better, the companies that create/extract them, and happen to pay good dividends? :)

plus, there's a lot of quality ADRs, that are priced in dollars, but earn their income in other currencies. If the dollar deflates your assets will appreciate with it. If you hold onto bonds, obviously you lose. When people realize that there's a huge bubble in certain commodities, and stop buying at some point, the house of cards will collapse, fast.

When people are burning wheelbarrows full of cash to keep warm, the huge spike in metals could be valid. But so far I don't see many people with a lot of excess cash.. usually the opposite.

[nando]

You really think there is gonna be a bubble on a limited resource? That's like saying the oil bubble is gonna pop and we will be back to 99c/gal. for fuel.

Tulips.

Oil has many, many uses and drives most of the world's economy. Gold is useful for electronics, some industrial applications and... shiney trinkets? if 90% of the world's gold supply disappeared, would we still have more than enough of for all of the uses in manufacturing and electronics? I think yes..

where does demand for gold/silver come from?

where does demand for oil come from?

there are many, many examples of limited resources that have been in bubbles. *everything* has limited resources. Unless you've found the secret of perpetual motion.. ;)

[Farbin Kaiber]

And when a paper currency dissolves, and oil still costs something, one who listened to me would have silver to buy it with.

[nando]

"when"... except you have no precedence. Even massive economic collapses in places like Russia eventually worked themselves out. I think if something like that happened (US currency "dissolves", total economic collapse, the fall of the US government, anarchy, etc), we'll have a hell of a lot more to worry about than where we're going to fill up our tanks.

Basically it will be whoever has the most bullets, not who has the most shiny trinkety stuff. Think about what happened during hurricane Katrina, on a massive scale. What are you going to use the gold for, bullet proof shield? throw it through windows so you can maybe find scraps of food in a shopping center?

And that's assuming you have actual bullion in your posession. Most of the gold securities don't hold any bullion or it's locked away far from the investors. If there's no market, how will you collect? how much of it is tucked away in your house in case the entire world economic system collapses as you fear? If you work for the security company that's paid by a market system to protect the asset, and that market system is gone, what is the incentive not to use your weapons/training to keep it for yourself?

It's really, really far fetched. But it's not far fetched to say that a 500%+ price appreciation in an asset that has limited uses could potentially be in a bubble.

[Farbin Kaiber]

^ Well because exactly just that, it will come back. So, how else would you hold onto a commodity of value to transfer into new, "rebuilt" financial market? The pages of worthless copy paper of the stocks and ETF statements? Documents referring to a currency called a "Dollar" that would no longer exist? Really, you are putting a lot of faith into a concept without backing. All I'm saying is having some backup is a wise move. You don't have to listen to me, or even say I'm right/wrong, just view it as an alternative to the norm.

[nando]

I'm not saying you're wrong. But I think it would be a good idea to study the currencies that have collapsed and see what actually worked. Was it really gold/hard assets? Or armed thugs who got what they needed by using force/violence? Keeping in mind Americans are one of the most heavily armed (and violent) populations on Earth.

25% of your investments is not just a hedge, it's a bet. I don't have 25% of anything sunk into one investment (I have a lot more than the $8k account i mentioned above, too).

as far as my investments in "paper". That was my point - if everything collapsed, I don't give a crap about gold, dollars, or whatever. I want a sawed off shotgun and as much ammo as I can hold onto. Then I'm coming over to your house, shooting you dead, and taking your womenz and foodz :p

[Farbin Kaiber]

Do you really think you'll be coming and taking the food of some guy that is suggesting the investment into gold/silver and moved to Ruralsville, ID to grow his own food/animals?


OPSEC limits me from telling you what you'd have in store.

[Kershaw]

It's not tough. Invest money 44% - 28% - 28% in VTI - VNQ - VEU (for example).

vti and vnq dont look like it's the right time to buy them. right time to sell though. veu looks solid though.

my one great success was hk.1211 (iirc) they make batteries for electric cars. i read about them in GQ, they said buffet had staked them 20m or something. i researched them and they seemed really legit. bought in at 14, sold out way too soon. still made a boat load. they are sitting at 65-70 now, or higher.. i dont want to check. haha.

the loss that made me call it quits was a bio penny stock a friend referred me to. i made 2k on a friday. he said it'll only go up. i shoveled more money at it. lost a decent bit over the next week. we're talking about 8k of loss.

when i was 12, i wanted to put 50k in google when they went public. but i didnt trust myself because i was only 12. but i knew they were gonna be big. kinda wish i had. haha.

#1 post college mistake = new/pricey car !!

made this mistake IN college. i paid in cash so i dont have a car payment anyway. but insurance was $375/month when i first got it.

[samiam3356]

You really think there is gonna be a bubble on a limited resource? That's like saying the oil bubble is gonna pop and we will be back to 99c/gal. for fuel.

You really think there isn't?

and there's your market. People betting on it going down and people betting on it going up. The house(broker) wins no matter what.

I was a finance major in college and was an advisor for 8 years. 5 years with Ag Edwards and 3 with Wachovia Securities. Funny how over time the title on stock brokers changed to Financial Advisor. 85% of them are just really good salesmen. Some of the best advisors usually don't do too well because they are not charasmatic and not very good at selling. However, there are SOME that actually are very good. And yes there is a need for them in some circumstances. When your talking about people with millions of dollars and multiples trust accounts setup it can get pretty complicated for a 80 year old woman that got left a lot of money from her husband or what not. It's a very greedy business and what eventually led me to change out of a career that I use to love.

Anyhow, it's all about time in the market and the compounding of dollars. Its been mentioned before in this thread about taking advantage of employer matching on retirement accounts and it could not be more true. It's like getting a 100% return on your money up to the match if its dollar for dollar.

[Kruzen]

Tulips.

Oil has many, many uses and drives most of the world's economy. Gold is useful for electronics, some industrial applications and... shiney trinkets? if 90% of the world's gold supply disappeared, would we still have more than enough of for all of the uses in manufacturing and electronics? I think yes..

where does demand for gold/silver come from?

where does demand for oil come from?

there are many, many examples of limited resources that have been in bubbles. *everything* has limited resources. Unless you've found the secret of perpetual motion.. ;)

http://www.npr.org/blogs/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium?ft=1&f=93559255

Gas is actually extremely cheap these days. Because of bernanke's antics it's expensive in dollars.

With fuel @$3.89, gold at 1508 and silver at 47.50, gas costs:
.0026/oz gold
.082/oz silver

In 1991, gas cost .00284oz gold and .28 oz silver. And in 1961 Gas cost .0088 oz gold and .24 oz of silver.

[rwh11385]

Tulips.

I love it when people who understand this reference and know this is not the first time the world has experienced bubbles. I brought it out at a client's annual board meeting.


And people are seemingly ignorant that the USD has been the third best performing currency in the last 100 years...

All these *ifs* about fiat money becoming worthless... But I'm advocating buying part in all companies. If paper money is no longer worth anything, aren't the companies worth something?

Like you mentioned, most commodities are just pieces of papers too, which aren't any better than paper for % of a company. If you are stocking M4s, gold bricks, and cans of beans like mr.sleeve then that's another story.

[Farbin Kaiber]

^ Well, those Co.'s you suggest would go bankrupt overnight like Brawndo. Nobody buying the product, no "value" in their value.