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That's the old rule in investing that things which bring really handsome profits down the line are not this much in the public interest. When I was telling peo
by LekkoscPiwa 13y ago
That's the old rule in investing that things which bring really handsome profits down the line are not this much in the public interest.
When I was telling people back in 2007 I'm buying gold and silver they thought I'm crazy. It was waaay to expensive at $600usd and $10 usd respectively.
Since then I just heard that gold and silver are "a bubble". Literally, like for past 6 years my family, my coworkers, the media, you name it - treat this investment type with the highest dose of suspicion. While their "investments" (a.k.a. house - a place to live not an investment really) - went bad.
It's funny how the markets work.
The genuine growth stocks/assets will be the ones that don't bring too much of the media attention and the ones that "climb wall of worry".
Gold mining cost is currenly above the price of gold. A bubble?
Tumblr P/E (price to earning ratio) is 1:100. And any investor worth his buck knows that anything above 1:15 (some say 1:10 in bad market conditions like we have nowadays) is too expensive.
And still everybody wants to buy it, media reports on it all the time, and overnight everybody and their uncle knows who Mr. David Karp is. That's how you spot a bubble. Or at least seriously overvalued asset. And assets are to be bought on cheap and sold expensive not the other way around.
- kfk 13y agoGold mining cost is currenly above the price of gold. A bubble? Where did you get this info?
- LekkoscPiwa 13y agoFrom: http://www.bloomberg.com/news/2013-04-17/gold-miners-lose-169-billion-as-price-slump-compounds-etf-pain.html http://www.bloomberg.com/news/2013-04-17/gold-miners-lose-16... Quote: "Gold producers, ignored as global stocks rebounded in the past two years and investors turned to exchange-traded funds that track bullion, face closing mines or shutting themselves down after the metal’s worst slump in three decades this week made 15 percent of miners unprofitable." I also read that the biggest gold mine in the world in South Africa (70% world production) is not profitable at these prices. But you'd need to google for that information yourself. Also, I'll add another point. The definition of bubble is that nobody knows that's a bubble. Everybody will think and tell you it's a genuine investment, actually the best investment going on at the moment. That's why one way of making sure you're not investing in overvalued assets is to ask your cab driver if he invests (or would like to invest) in that asset. Now, evey cab driver who drives me stays away from gold because it's a "bubble". But in the day they would all just love to buy Facebook. So media says gold is in bubble. All my friends do. My family does. You check the stats - the price merely covers or doesn't cover mining cost - that's your "wall of worry" factor - now you buy. Don't get me wrong gold will be a bubble. But that's in distant future. That's when I'll be selling. (if im right)
- kfk 13y agoThanks. Very useful stuff, the site looks good too. I have all my savings in a bank account because I have no idea what to do with them. One day I would like to invest part of it, but you know, you need to understand a bit what you are doing there.
- LekkoscPiwa 13y agoActually, investing can be absolutely fascinating stuff and learning can eat plenty of your time. There are many schools of economics and different people will tell you different things, sometimes on opposite sides of an argument, all can be very interesting. Try finding some videos of Peter Schiff, Marc Faber, Jim Rogers, Kyle Bass on youtube. Or read them. They are all in favor of gold, hard assets. Now, there are plenty of others strongly disagreeing with them who are very interesting to listen as well. http://www.youtube.com/watch?v=ykT3z2qy1LI http://www.youtube.com/watch?v=ykT3z2qy1LI