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Four year high!

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Silverhawk74
Pillar Of The Community
United States
3670 Posts
 Posted 03/15/2012  5:23 pm Show Profile Bookmark this topic Add Silverhawk74 to your friends list Get a Link to this Message

So I see a new yahoo article claiming the stock market just hit 14, via the highest it has been in four years....

Perhaps this is why G&S are lagging behind so far this year to start.....

I look at G & S like that slow consitant turtle moving up the road, and the hair (the stock market), may just get caught sleeping under a shade tree before it is all said an done. And at that point we should see G & S start back up, just as soon as the bottom falls back out of the paper market, and don't fool yourself as it is just a matter of WHEN, not IF....

Edited by Silverhawk74
03/15/2012 5:24 pm
Pillar Of The Community
Australia
8603 Posts
 Posted 03/15/2012  6:00 pm  Show Profile Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
When you look at the DJIA chart over the last 5 years and apply a 5 - year trend line to that, you get a low point value in 2009 (after the GFC), of around 9,000 points, and a current point value now of a bit below 13,000 points.

That works out at compound growth rate around 14% per year, over a three year period.

For silver, with a price of around $15, 5 years ago, the compound growth rate is around 17% per year. (Around $15 then to around $33 now).


In doing this exercise, I was expecting to find the results a bit more favourable for a share index investment than has turned out, but the longer term investment in silver beats that. Interesting.
Edited by sel_69l
03/15/2012 6:16 pm
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 Posted 03/15/2012  7:33 pm  Show Profile Bookmark this reply Add Silverhawk74 to your friends list Get a Link to this Reply
Wow Sel that is some real smart math you figured up there I like that a lot!

An you guys that always look a little deeper then I, at the longer term view of the lines an charts over like you said five years, always get a better bigger picture of what is indeed going on on again the bigger scale of things. And it really begins to tell a story....

Very interesting indeed I find that 14% to 17% numbers you found there. Wow 3% better for silver over the paper market, I like you would have never figured that to be the case.....

Now my brain instantly wants to ask, what will those numbers be like over the next fiver years, lol....
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Australia
8603 Posts
 Posted 03/15/2012  7:56 pm  Show Profile Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
You have to consider if you want to be a long term investor or a short term trader. Price volatility has a lot to do about what sort of investor you wish to be, and the timing of when to buy or sell.

For me it is poured bars for bullion silver, (bought rarely), and for numismatics, I collect World coins ancient through to modern. Been at that for 40 years.

My biggest investment is my family, then my house (paid off 25 years ago), then superannunation (cumpulsory by Law), then numismatics, then bullion.

For bullion, I have a small amount each of platinum, gold and silver.
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United States
3670 Posts
 Posted 03/16/2012  01:26 am  Show Profile Bookmark this reply Add Silverhawk74 to your friends list Get a Link to this Reply
Yes I recall Sel as I have been postin in around you there my friend for some time now, and you have a real solid system to say the least and order of priority shall we say.....

Just you an me an the crickets tonight, lol. Like being all alone out under the moon in the middle of the outback eh....

Speaking of which I have noticed not too many post in an around the ol PM section when silver an gold are in a downward trend, but whenever it climbs a 1.50 or 2 bucks an oz. in a half a day or so for silver and 75 to 80 bucks for gold, we all seem to come out of the woodwork....

Avoiding loses from major pullbacks can be achieved I feel by having a selective eye for items on like low start no reserve auctions, when you catch a great piece end for half or less of its total value. And that is when the silver or gold separate from spot price, when you get that item that is low enough mintage an VERY sought after where as people will bid 250 on 1 oz. in the form they seek, whether silver is 30 bucks an oz. or 45. And the only difference maybe being they would bid much higher if silver was indeed 45 bucks per oz.....

Edited by Silverhawk74
03/16/2012 01:31 am
Valued Member
United States
264 Posts
 Posted 03/16/2012  08:13 am  Show Profile Bookmark this reply Add rgathright to your friends list Get a Link to this Reply
I just cannot invest in the stock market after having repeated proof that the SEC is doing very little to audit and protect our assets.

@Silverhawk74 I have noticed this low post trend on downward PM markets. Maybe it is just because so many of us are busy buying?
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United States
3670 Posts
 Posted 03/16/2012  08:25 am  Show Profile Bookmark this reply Add Silverhawk74 to your friends list Get a Link to this Reply
Buying theory eh rgathright, I can buy that, lol....
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United States
2867 Posts
 Posted 03/16/2012  09:13 am  Show Profile Check barryg's eBay Listings Bookmark this reply Add barryg to your friends list Get a Link to this Reply
Personally, I think the latest dip was entirely caused by me purchasing a monster box of ASEs. Seriously, silver was heading up when I made the purchase, and right afterwards it dropped about $1. Maybe my purchase was the straw that broke the camel's back or something.

Of course, my mother is still convinced that she personally caused the Great Northeast Blackout of 1965 since it happened just as she turned on the light switch in the kitchen....
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4008 Posts
 Posted 03/16/2012  2:21 pm  Show Profile Bookmark this reply Add Ed_B to your friends list Get a Link to this Reply

Quote:
I just cannot invest in the stock market after having repeated proof that the SEC is doing very little to audit and protect our assets.

Somehow, I have the impression that the regulators do not exist to protect the little guys but to mediate differences between the BIG guys. No, they do not do a lot to help us and that's for sure. The Bernie Madoff debacle was a prime example of how incompetent the SEC is. Even after receiving solid evidence of Madoff's ponzi scheme, it still took them years to figure out what to do with it. Madoff himself was pretty dumb too, though, so maybe they deserved each other.

Still, it is possible to make decent money via investing in the stock market. Buying good mutual funds from a trustworthy and low cost fund company is probably one of the better methods. 4 of the 6 Vanguard funds I own earned better than 8% last year. While not great, that beat ALL of the fixed income type investments by up to several times over. The oil and gas royalty trusts are another place to make good money, although with more risk.

As to the OP's statement from the Yahoo news article... yes, figured in US dollars, the US stock market has had quite a surge over the past 3 years. This is a lot less impressive, however, when figured in ounces of gold and not in declining fiat currency terms. Oil, for example, is not over $100 a barrel because the US dollar is strong. It is high in price because it takes more of the now less-valuable dollars to buy a barrel of oil. It's the same with stocks. A profitable company is a real asset, so it takes more of the now less-valuable dollars to buy its shares too. Combine that with about $5T pumped into the US economy by the Fed and we have more dollars bidding the prices of fixed assets even higher.

Although there are many ways to calculate the true rate of inflation, one of the better ones, IMHO, is to calculate a ratio of this year's money supply divided by last year's money supply and convert that into a percentage increase or decrease. For example: if the US money supply was $2.5T last year and it is $2.8T this year, we have 2.8 / 2.5 = 1.12 which implies (1.12 - 1) x 100 or an inflation rate of 12%. While this is a simple estimate of inflation, it is also a reasonably accurate one as long as national production is similar from year to year. If it isn't, then adjustments can be made to rationalize the differences caused by production changes. With fewer goods produced and more money pursuing those goods, there will be a tendency for higher inflation numbers. Although this would be rare, this also works for deflation when the money supply is reduced from one year to the next.
Edited by Ed_B
03/16/2012 2:36 pm
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United States
3670 Posts
 Posted 03/16/2012  2:23 pm  Show Profile Bookmark this reply Add Silverhawk74 to your friends list Get a Link to this Reply
Lol the great blackout of 65, good one.....

BF said if you dumped like a billion oz. into the market at one time, it would only change the price 50 cents either direction lol, so I am doubting htat 500 box buy theory, rof....
Valued Member
United States
264 Posts
 Posted 03/16/2012  4:31 pm  Show Profile Bookmark this reply Add rgathright to your friends list Get a Link to this Reply
@Ed_b You make a solid case for diversifying, yet even the most stable investments can lose their value quickly.


Quote:
The oil and gas royalty trusts are another place to make good money, although with more risk.


Go check UNG then:
http://finance.yahoo.com/echarts?s=...1:symbol=ung range=1y indicator=volume charttype=line crosshair=on ohlcvalues=0 logscale=on source=undefined
Pillar Of The Community
United States
4008 Posts
 Posted 03/17/2012  8:28 pm  Show Profile Bookmark this reply Add Ed_B to your friends list Get a Link to this Reply
Diversification is one of only two "free lunch" items for the small investor. No, it is not a guarantee but it is a pretty good way of shaving the odds a bit in our favor. Yes, everything can go down in price at the same time but it typically does not.

As to UNG, no, I would not invest in that. It has a fairly poor record of matching up with gas prices, as it is supposed to do. In the oil and gas business, it is often better to invest in the pipeline companies. They get paid regardless of the price of oil or gas. They can suffer from reduced tonnages when demand for fuel declines, though.
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United States
705 Posts
 Posted 03/17/2012  10:09 pm  Show Profile Bookmark this reply Add coinwatch to your friends list Get a Link to this Reply
I agree with Ed_B's comments regarding an oil and gas play. If I were ready to sell a coin or two with an eye toward portfolio diversification (and a little income generation) I'd look at something like Chesapeake Midstream Partners, L.P. (NYSE:CHKM). This is NOT a recommendation, just an example.
Rest in Peace
United States
9104 Posts
 Posted 03/17/2012  10:41 pm  Show Profile Bookmark this reply Add biggfredd to your friends list Get a Link to this Reply
Wonder how many more trillions they'll have to pump into the economy to get the DJIA back to the 14,198.10 it hit under the shrub?
Valued Member
United States
410 Posts
 Posted 03/17/2012  10:59 pm  Show Profile Bookmark this reply Add JSH to your friends list Get a Link to this Reply

Quote:
You make a solid case for diversifying, yet even the most stable investments can lose their value quickly.

What is the alternative? If you simply hold onto cash you are guaranteed to lose money due to inflation.
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United States
4008 Posts
 Posted 03/18/2012  5:58 pm  Show Profile Bookmark this reply Add Ed_B to your friends list Get a Link to this Reply
In today's investing world, there do not seem to be a lot of good alternatives. In many cases, our choices run the range of lousy to so-so. Fixed income investors have been slammed harder than gold and silver after a cartel paper raid. Millions of older Americans have their life savings in CDs and government bonds. These supposedly safe investments used to pay a reasonable rate of interest but don't any more. These same folks are burning through their principal to stay afloat while waiting for times to change and a little higher interest rate to salvage what they have left. They may or may not get it. If not, then many of them will be destitute. Things like this sometimes happen and that is unfortunate. When it is orchestrated, it is downright criminal, IMHO.

If I had to pick a generic investment plan for most people today, it would contain: 20% in dividend paying blue chip stocks or low cost stock funds; 20% in real estate investment trusts; 20% in precious metals; 20% in A rated or better industrial bonds; 10% in utilities, and 10% in cash. There are many ways to divide up investable cash and many details in a person's life that will dictate which of these kinds of things should accentuated or even replaced. Adjust annually, as seems appropriate with up to date info.

There is no one-size-fits-all approach and no approach that will always work. Investors who make money have gotten past worrying about such things. They make the best decisions they can with the info and situation at hand. After that, things are pretty much left to fate.
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