Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
In Jan, 1980, gold hit a new record of $850/Oz. Look it up.
$1.00 in 1980 = $3.57 today. Look it up.
850 X 3.57 = 3,034.50/Oz. Figure it yourself.
So that means, maybe a couple of different things:
It could mean that if you were a gold bug in 1980 you have a long way to go before you get your money back.
Or it could mean that gold has a long way to go since it was fairly valued in 1980.
Either way, to me the message is clear in that all of these blanket statements that I'm reading about gold are just so much horse-pookey. Whether you make money or not depends on when you got the idea to buy.
If you got the bright idea in 1985 when gold was $284/Oz and still use the $3.57 multiplier above you get.....$1013/Oz. So you have a profit. For now
You know who I think is making money on gold? All those slick looking salesmen on TV
gold in 1980 was a pricing error . it was no different than when nasdaq hit 5000 or even the price of homes. that doesn't mean a pricing error becomes the standard forever as to how an asset does.
every asset gets mis-priced at some point in its life.
it corrects like water seeking its own level .
the real questioin is " HOW DID YOU DO ?"
there is no one here i bet that bought gold at 850 and still owns it im sure.
gold in 1980 was a pricing error . it was no different than when nasdaq hit 5000 or even the price of homes. that doesn't mean a pricing error becomes the standard forever as to how an asset does.
every asset gets mis-priced at some point in its life.
it corrects like water seeking its own level .
the real questioin is " HOW DID YOU DO ?"
there is no one here i bet that bought gold at 850 and still owns it im sure.
your post really is quite meaningless.
i will add one other parameter.
any asset class should never stand alone but be part of a master strategy. lets suppose you were the worst timer in the world and bought your gold the moment it was mis-priced at 850.00 .
lets suppose on the same day you also bought an s&p 500 index fund and some bonds to create a real portfolio .
just rebalancng the gold all those years left you with pretty much the exact same return on your gold as the equities today and you bought at the worst moment in history..
Last edited by mathjak107; 04-18-2013 at 04:03 AM..
What a hoot. It doesn't fit with your narrative, so it was "mis-priced in 1980". But it wasn't mis-priced 5 years later because that's more what you want to hear!
The price at 850 was a fluke. You can believe it or not but that does not make it the reference point forever as to how it performs anymore than nasdaq at 5000 did.
Those are levels they should never have hit in the first place.
who cares what something was over 30 years ago.. gold was not even a main stream investment back then.
the only thing that counts just like stocks is how you did, what something once was is meaningless. markets have no memory.
if you did not own cisco systems 13 years ago do you care it once hit the high 60's. ?
nope i sure don't. i only care as far as how it performs for me.
Last edited by mathjak107; 04-18-2013 at 08:44 AM..
When it comes to golds value, the only thing I am sure of, is the fact gold is held by central banks and institutions as a reserve and they do not want to sell it... speaks loud and clear to me.
I don't know what the fair value of gold may be. We've seen several examples of how it may be calculated, and all of them made sense to me. And we've looked at historical value, and it's been all over the map when you place inflation adjusted multipliers to it.
But what if the pundit who calculated it at $800 (today's money) was right? What if it declines to $800 and stays there? That happened - and even worse - when gold went from $850 in 1980 to $240 in 1985 and stayed down for years. The decline in that case took five years, and then another 20 years (2006) before it ever touched the dollar figure again. It never has touched the inflation adjusted figure.
Quote:
AFP/Getty ImagesGold bugs may be in denial about the yellow metal’s fair value, writes Mark Hulbert.
CHAPEL HILL, N.C. (MarketWatch) — Gold’s bear market is just beginning.
That’s the depressing assessment from Claude Erb, a former commodities portfolio manager for Trust Company of the West, and co-author — with Campbell Harvey, a Duke University university finance professor — of an academic study from last June that is looking to be increasingly prophetic.
In that study, the authors calculate that gold’s fair value is close to $800 an ounce. Though many of gold’s true believers were inclined to dismiss such a bearish projection when their study came out, it’s beginning to be taken a lot more seriously: Bullion’s recent slaughter has eliminated more than 40% of what a year ago they concluded was bullion’s overvaluation — including $240 over the last week alone.
These developments prompted me to check in with them to see if these recent developments had in anyway softened their bearish assessment.
not that i am a gold bug at all but i will gladely take a chance with an asset that has survived 5,000 years which is far beyond any company on the planet.
certain things like diamonds and precious metals and even art work have intrinsic values that are ageless.
Back in the 1970's 1 dollar bought 1/35 of an ounce of gold. , today 1 dollar buys 1/1400th of an ounce of gold so there is a store of value going on there..
in fact going back to the 1800's 1 ounce bought a good mans suit and a pair of good shoes.
today 1 ounce still gets a good mans suit and a pair of shoes.
It's the work, not the gold, that makes art work have intrinsic value. Gold is one of the most malleable metals, and much of the most impressive artwork made from it uses very thing gold. Gold leaf, the most common type used, is only a couple of microns thick or even thinner. One ounce of 24k gold can be beaten so thin it cannot be handled with the fingers; a special brush called a gilder's tip must be used to handle it.
Do people here consider gold as a real asset or a financial asset? Just curious what people perceive.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
? All those slick looking salesmen on TV
