Gold - any gold bugs out there?

[wong]

Anyone else actively investing in gold ?
I've been a gold bug since 2006. Made a bit in 2007, but lost it again in 2008.
Hope 2009 looks better for gold as the fundamentals are sound.

[LeeThePeople]

What kind of returns have you made?

[Muzzlehatch]

With quantitative easing on its way in to dilute the value of our currency even further, precious metals might well be the right choice.

[jazzybee]

Been thinking about this myself. Looking for a liquid but tangible asset investment for a small chuck of sterling I have. Was considering switching to dollars or Euros - but feel we are in for a significant sterling depreciation and asset inflation - in that case Gold, Silver type investments look good. However, how does one invest? I could buy futures or options but then am at risk with the institution I have the investment with. Whats the safest way?

[NoelWatson]

wong said:

Hope 2009 looks better for gold as the fundamentals are sound.

I am unable to determine the yield or PE ratio, so am not sure which fundamentals you are using

[wong]

Gold does not provide interest/dividends or any income. You may even have to pay for insurance/storage. So why buy gold ?

With every country printing lots of money ( it does not take any effort to print more money.) inflation is on the horizon. It takes a lot of effort to mine gold and its supply cannot be increased significantly by pressing a few buttons. As more and more dollars chase fewer and fewer assets, then those assets will increase in value.

Gold bullion is available - ask your bank
Gold mining stocks - tend to leverage gold bullion prices
Gold futures
gold ETF's
I follow www.zealllc.com - weekly essays

[NoelWatson]

wong said:

Gold does not provide interest/dividends or any income. You may even have to pay for insurance/storage. So why buy gold ?

With every country printing lots of money ( it does not take any effort to print more money.) inflation is on the horizon. It takes a lot of effort to mine gold and its supply cannot be increased significantly by pressing a few buttons. As more and more dollars chase fewer and fewer assets, then those assets will increase in value.

Gold bullion is available - ask your bank
Gold mining stocks - tend to leverage gold bullion prices
Gold futures
gold ETF's
I follow www.zealllc.com - weekly essays

I assume you haven't got any futures or ETFs, or do you protect yourself from counterparty risk somehow?

Why do you choose to use gold as an inflation hedge and not some other asset?

Are you sure that gold isn't currently in a massive bubble, because even Mrs Muggins the local butcher was recommending that I buy some?

Edited by NoelWatson on Wednesday 4th March 08:32

[ShadownINja]

NoelWatson said:

Are you sure that gold isn't currently in a massive bubble, because even Mrs Muggins the local butcher was recommending that I buy some?

Edited by NoelWatson on Wednesday 4th March 08:32

There's at least one gold thread a week on PH isn't there? Something's up (namely the price of gold!). Time to short?

I bet your edit was to change Miggins to Muggins.

[LeeThePeople]

NoelWatson said:

wong said:

Gold does not provide interest/dividends or any income. You may even have to pay for insurance/storage. So why buy gold ?

With every country printing lots of money ( it does not take any effort to print more money.) inflation is on the horizon. It takes a lot of effort to mine gold and its supply cannot be increased significantly by pressing a few buttons. As more and more dollars chase fewer and fewer assets, then those assets will increase in value.

Gold bullion is available - ask your bank
Gold mining stocks - tend to leverage gold bullion prices
Gold futures
gold ETF's
I follow www.zealllc.com - weekly essays

I assume you haven't got any futures or ETFs, or do you protect yourself from counterparty risk somehow?

Why do you choose to use gold as an inflation hedge and not some other asset?

Are you sure that gold isn't currently in a massive bubble, because even Mrs Muggins the local butcher was recommending that I buy some?

Edited by NoelWatson on Wednesday 4th March 08:32

With it being a finite commodity the price is bound to go up when stocks go low. My problem is are we going to see a good return in our lifetime? IMO precious metals and gemstones are such a long time investment you need to be counting generations to see a high return.

But then again with the base rate so low your money is not making a nice profit in the bank.

[NoelWatson]

coyft said:

I've had a fair portion of my investments in Gold bullion since Jan 2008, it's gone up 40% in that time. Stocks on the other hand have gone down by 40%. It's proven to be a very good hedge against the depreciation of the pound.

There is loads of research you can do to decide it it is an investment for you.

Wouldn't it have been easier to trade GBPUSD?

[LeeThePeople]

NoelWatson said:

coyft said:

I've had a fair portion of my investments in Gold bullion since Jan 2008, it's gone up 40% in that time. Stocks on the other hand have gone down by 40%. It's proven to be a very good hedge against the depreciation of the pound.

There is loads of research you can do to decide it it is an investment for you.

Wouldn't it have been easier to trade GBPUSD?

Isnt that a lot riskier though?

[Deva Link]

coyft said:

I've had a fair portion of my investments in Gold bullion since Jan 2008, it's gone up 40% in that time. Stocks on the other hand have gone down by 40%. It's proven to be a very good hedge against the depreciation of the pound.

There is loads of research you can do to decide it it is an investment for you.

Isn't the increase largly exchange rate gains? Great if you're holding gold that you bought at $2 to the £ but surely it's very expensive right now if your base currency is sterling.

[NoelWatson]

LeeThePeople said:

NoelWatson said:

coyft said:

I've had a fair portion of my investments in Gold bullion since Jan 2008, it's gone up 40% in that time. Stocks on the other hand have gone down by 40%. It's proven to be a very good hedge against the depreciation of the pound.

There is loads of research you can do to decide it it is an investment for you.

Wouldn't it have been easier to trade GBPUSD?

Isnt that a lot riskier though?

TBH I haven't compared relative volatilities - my point was that gold, measured in USD, hasn't moved much since Jan 2008

[wong]

NoelWatson said:

wong said:

Gold does not provide interest/dividends or any income. You may even have to pay for insurance/storage. So why buy gold ?

With every country printing lots of money ( it does not take any effort to print more money.) inflation is on the horizon. It takes a lot of effort to mine gold and its supply cannot be increased significantly by pressing a few buttons. As more and more dollars chase fewer and fewer assets, then those assets will increase in value.

Gold bullion is available - ask your bank
Gold mining stocks - tend to leverage gold bullion prices
Gold futures
gold ETF's
I follow www.zealllc.com - weekly essays

I assume you haven't got any futures or ETFs, or do you protect yourself from counterparty risk somehow?

Why do you choose to use gold as an inflation hedge and not some other asset?

Are you sure that gold isn't currently in a massive bubble, because even Mrs Muggins the local butcher was recommending that I buy some?

Edited by NoelWatson on Wednesday 4th March 08:32

I hold gold mining stocks and trade London gold futures.
Gold mining stocks have historically leveraged gold's gains 3 to 5 x ( but have been underperforming recently) If 1 oz of gold costs 400 US$ to mine and gold is 500 $ an oz, then the mine makes 100 $ profit, if gold is 600 $, then it has increased profit to 200 $ - a 20 % increase in the price of gold has caused a 100 % increase in profit. Its not quite as simple as that, but you get the drift.
Gold is drifting higher and may well be in a bubble. But is no where near a blow off top. In any bubble, it is the true fanatics ( who usually work in that industry itself) are the first to see the bubble, the second phase are the fund managers then the third and last phase are the general public.

[wong]

coyft said:

I've had a fair portion of my investments in Gold bullion since Jan 2008, it's gone up 40% in that time. Stocks on the other hand have gone down by 40%. It's proven to be a very good hedge against the depreciation of the pound.

There is loads of research you can do to decide it it is an investment for you.

I have been holding Chinese gold mining stocks since 2005. With the bubble in the Chinese stock market compounding the rise in the price of gold from ~ 500 US$ to 800 - 1000 US $ in 2007, these stocks increased ~ 300 %. Then I got tempted by warrants and discovered gold futures without really understanding them and lost most of the previous profits in 2008. Now, older, wiser and less greedy, I see that the prospects for gold are improving.
I use the following websites
www.kitco.com
www.goldseek.com
www.zealllc.com
Stephen Leeb ( not a gold bug) is also recommending gold now.

What websites / research do you use ?

[NoelWatson]

wong said:

Gold is drifting higher and may well be in a bubble. But is no where near a blow off top. In any bubble, it is the true fanatics ( who usually work in that industry itself) are the first to see the bubble, the second phase are the fund managers then the third and last phase are the general public.

But the general public have been recommending it for ages. Including the shoe shine boy (and Mrs Muggins)