Gyroscopic Investing

"Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it
would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At
$1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400
million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most
profitable company, one earning more than $40 billion annually). After these purchases, we would
have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying
binge).

Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual
production of gold command about $160 billion. Buyers – whether jewelry and industrial users,
frightened individuals, or speculators – must continually absorb this additional supply to merely
maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn,
wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the
currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its
owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The
170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can
fondle the cube, but it will not respond.

Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m
confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at
a rate far inferior to that achieved by pile B."

boglerdude’s post is an unattributed quote of Warren Buffett.
The Exxon Mobil part is out of date as of 2020.

A century from now we can be getting all our power from Mr. Fusion, and making our own food in our 3D food printer in the kitchen. Farmland is all national parks and Exxon is long gone.

Meanwhile I've cornered the market for gold jewelry for 100 years and am a gazillionaire. I also give tours of the shiny metal cube for $10 a pop.

Cortopassi wrote: ↑Thu Mar 05, 2020 8:17 am A century from now we can be getting all our power from Mr. Fusion, and making our own food in our 3D food printer in the kitchen. Farmland is all national parks and Exxon is long gone.

Meanwhile I've cornered the market for gold jewelry for 100 years and am a gazillionaire. I also give tours of the shiny metal cube for $10 a pop.

Wasn't there a Twilight Zone episode where some robbers with stolen gold put themselves into suspended animation for 100 years, then try to hike through the desert to civilization with their gold? They die along the way. A passerby later finds them and notes that all the gold has been worthless since it was discovered how to manufacture it artificially.

It's hard to predict the future!

Gold: worthless
a Hundred-Year Nap: Priceless

Jeffrey Gundlach just said that gold is near all-time highs with other currencies, and that he expects it will hit an all-time high relative to the dollar. (cnbc)

Xan wrote: ↑Thu Mar 05, 2020 9:22 am

Cortopassi wrote: ↑Thu Mar 05, 2020 8:17 am A century from now we can be getting all our power from Mr. Fusion, and making our own food in our 3D food printer in the kitchen. Farmland is all national parks and Exxon is long gone.

Meanwhile I've cornered the market for gold jewelry for 100 years and am a gazillionaire. I also give tours of the shiny metal cube for $10 a pop.

Wasn't there a Twilight Zone episode where some robbers with stolen gold put themselves into suspended animation for 100 years, then try to hike through the desert to civilization with their gold? They die along the way. A passerby later finds them and notes that all the gold has been worthless since it was discovered how to manufacture it artificially.

It's hard to predict the future!

Yes. Good episode!

https://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper

I can't recall ever seeing a 45 degree up and to the right like this, without some dip along the way. I don't know whether that is good or bad, but good for today.

$1700 on Kitco.

Libertarian666 wrote: ↑Sun Mar 08, 2020 5:59 pm $1700 on Kitco.

Whoa!

And and stock future and oil futures are absolutely tanking. Going to be another fun, exciting day tomorrow, haha.

dualstow wrote: ↑Sun Mar 08, 2020 6:37 pm

Libertarian666 wrote: ↑Sun Mar 08, 2020 5:59 pm $1700 on Kitco.

Whoa!

Yeee ha!!!!!!!!!! Hang on tight everyone, here we go!

Just don't panic, is all. Ignore the pundits, keep that dry powder handy and your fingers away from the "trade" button.

Meanwhile, down under....

https://www.youtube.com/watch?v=e6N2oOT ... dex=4&t=0s
(happy I come across the PP nearly 10 years ago!)

sophie wrote: ↑Sun Mar 08, 2020 10:20 pm

dualstow wrote: ↑Sun Mar 08, 2020 6:37 pm

Libertarian666 wrote: ↑Sun Mar 08, 2020 5:59 pm $1700 on Kitco.

Whoa!

Yeee ha!!!!!!!!!! Hang on tight everyone, here we go!

Just don't panic, is all. Ignore the pundits, keep that dry powder handy and your fingers away from the "trade" button.

Back down to up only $3 on the day, at $1676.

Libertarian666 wrote: ↑Mon Mar 09, 2020 3:26 am Back down to up only $3 on the day, at $1676.

Yeah, we've officially hit that public "SELL EVERYTHING!!!" point in the meltdown.

pmward wrote: ↑Mon Mar 09, 2020 8:59 am

Libertarian666 wrote: ↑Mon Mar 09, 2020 3:26 am Back down to up only $3 on the day, at $1676.

Yeah, we've officially hit that public "SELL EVERYTHING!!!" point in the meltdown.

Except bonds?

Cortopassi wrote: ↑Mon Mar 09, 2020 9:03 am

pmward wrote: ↑Mon Mar 09, 2020 8:59 am

Libertarian666 wrote: ↑Mon Mar 09, 2020 3:26 am Back down to up only $3 on the day, at $1676.

Yeah, we've officially hit that public "SELL EVERYTHING!!!" point in the meltdown.

Except bonds?

Money has to go somewhere, and usually in those sell everything panic modes it winds up in bonds.

Hopefully bonds provide a little buffer today, doesn't look like gold will.

Shows what I can predict, but I really thought gold might take off with this panic selling, oil prices plummeting, global pandemic thing we've got going on.

So far, not at all.

mdwilson1991 wrote: ↑Thu Mar 12, 2020 9:36 am Shows what I can predict, but I really thought gold might take off with this panic selling, oil prices plummeting, global pandemic thing we've got going on.

So far, not at all.

There are always way more factors that affect markets than you think. Gold itself may be more valuable than ever, but leveraged stock investors also have to sell something to cover their margin calls. But given enough time, secondary factors will run their course and things will work out.

In the meantime, everything is relative. When stocks are hitting circuit breakers, modest gold losses feel like great bargains.

Tyler wrote: ↑Thu Mar 12, 2020 10:13 am

mdwilson1991 wrote: ↑Thu Mar 12, 2020 9:36 am Shows what I can predict, but I really thought gold might take off with this panic selling, oil prices plummeting, global pandemic thing we've got going on.

So far, not at all.

There are always way more factors that affect markets than you think. Gold itself may be more valuable than ever, but leveraged stock investors also have to sell something to cover their margin calls. But given enough time, secondary factors will run their course and things will work out.

In the meantime, everything is relative. When stocks are hitting circuit breakers, modest gold losses feel like great bargains.

Especially since gold is still in positive territory for the year.
So far, anyway.

As I'm writing this, gold is still up about 1% YTD.
And these must be end times, because I've recently sold about 10% of my gold holdings at prices about $100 above where we are right now.
Not because I thought this would happen, but just to have lots of cash because I'm possibly going to buy a house later this year.

Here we go...

Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program...
https://www.cnbc.com/2020/03/15/federal ... ogram.html

this could go either way .... it basically is saying we are in deep doo doo ...

it could be bad for stocks and bad for gold and long term bonds ..... finding buyers at these rates may be tough for bonds ... and margin calls may see both hammered