As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 1:29 pm
Gyroscopic Investing
Permanent Portfolio Forum
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As gold sinks, is it a buy?
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Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 1:33 pm
Not sure but I may do some tax lost harvesting here and switch from GLD to IAU in case we're bottoming.
Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 7:07 pm
Don't try to catch a falling knife!
Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 7:41 pm
How else would you make money from it? Were you being sarcastic?
Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 9:37 pm
I would wait until it has 2 consecutive positive days, including at least a 1%, before I even considered buying it.
Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 10:12 pm
I like to buy PRPFX on days like this.
It feels less speculative than trying to time a gold purchase, and I have confidence that even if it keeps falling, it will eventually give me a positive return.
It feels less speculative than trying to time a gold purchase, and I have confidence that even if it keeps falling, it will eventually give me a positive return.
Re: As gold sinks, is it a buy?
Posted: Wed Feb 20, 2013 10:28 pm
Prognosticating: The act of predicting the future.
Speculating: The act of backing one's prognostications up with money.
I do the former all the time, the latter very very rarely.
With that out of the way let me prognosticate a little. Long term, I am bullish on gold for much the same reasons cited in this guys pitch. But the key phrase is long term. I just don't see a huge downside to gold while central banks are tripping over each other in a mad rush to debase currency and most of the world's industrialized nations are so heavily in debt that were in not for their ability to print money they would be bankrupt. And yet we are still clawing our way out of a deflationary crisis which could be exacerbated by deep government spending cuts. So if I were speculating on my prognostication (which I am not) I would definitely see this as a long term play.
But there is no way that once the inflation genie gets out of the bottle the FED is going to be able to snap their fingers and order it back in. I'm going out on a limb here but I think gold could easily double in price over the next five years.
Speculating: The act of backing one's prognostications up with money.
I do the former all the time, the latter very very rarely.
With that out of the way let me prognosticate a little. Long term, I am bullish on gold for much the same reasons cited in this guys pitch. But the key phrase is long term. I just don't see a huge downside to gold while central banks are tripping over each other in a mad rush to debase currency and most of the world's industrialized nations are so heavily in debt that were in not for their ability to print money they would be bankrupt. And yet we are still clawing our way out of a deflationary crisis which could be exacerbated by deep government spending cuts. So if I were speculating on my prognostication (which I am not) I would definitely see this as a long term play.
But there is no way that once the inflation genie gets out of the bottle the FED is going to be able to snap their fingers and order it back in. I'm going out on a limb here but I think gold could easily double in price over the next five years.
Re: As gold sinks, is it a buy?
Posted: Thu Feb 21, 2013 3:22 pm
You should use the 4-currency gold timing model instead. A rising tide lifts all boats, yes?Reub wrote: I would wait until it has 2 consecutive positive days, including at least a 1%, before I even considered buying it.
Re: As gold sinks, is it a buy?
Posted: Thu Feb 21, 2013 3:42 pm
Would you mind elaborating?MachineGhost wrote:You should use the 4-currency gold timing model instead. A rising tide lifts all boats, yes?Reub wrote: I would wait until it has 2 consecutive positive days, including at least a 1%, before I even considered buying it.
Re: As gold sinks, is it a buy?
Posted: Thu Feb 21, 2013 4:05 pm
Kriegsspiel wrote: How else would you make money from it? Were you being sarcastic?
I don't think he was being sarcastic but, since no one can know the answer in advance, he was being rhetorical.You could lose money if it sinks further, and you
could make money buying gold as it rises, as long as it rises further.
Right?
For now, I agree with Reub. Could be a falling knife.
Re: As gold sinks, is it a buy?
Posted: Thu Feb 21, 2013 4:46 pm
Pointedstick wrote:Would you mind elaborating?MachineGhost wrote:You should use the 4-currency gold timing model instead. A rising tide lifts all boats, yes?Reub wrote: I would wait until it has 2 consecutive positive days, including at least a 1%, before I even considered buying it.
4-currency?
Hope you can share this one MG..
Re: As gold sinks, is it a buy?
Posted: Thu Feb 21, 2013 5:43 pm
Here is MG's quote:
"A simple method for timing gold bullion that historically outperforms buy and pray is to check the price of gold in the four major currencies (USD, EUR, GBP, JPY) at the end of each month and if all are showing a positive gain, then buy the gold, otherwise wait until next month. However, I do not know how that compares to DCA into gold in a bull market. As long as real interest rates remain negative, gold will remain in a bull market."
MG
"A simple method for timing gold bullion that historically outperforms buy and pray is to check the price of gold in the four major currencies (USD, EUR, GBP, JPY) at the end of each month and if all are showing a positive gain, then buy the gold, otherwise wait until next month. However, I do not know how that compares to DCA into gold in a bull market. As long as real interest rates remain negative, gold will remain in a bull market."
MG
Re: As gold sinks, is it a buy?
Posted: Fri Feb 22, 2013 9:00 pm
To deal with the daily volatility, use the average gold price for the month when doing the comparison. Now, lets be realistic. In such a backtest, it would not account for the spreads or the commissions for coins and that was surely dramatically higher back in the 70's and 80's than they are now. But as a guide for when to get in or DCA as opposed to trading in and out of gold and cash, it does the job.Reub wrote: Here is MG's quote:
"A simple method for timing gold bullion that historically outperforms buy and pray is to check the price of gold in the four major currencies (USD, EUR, GBP, JPY) at the end of each month and if all are showing a positive gain, then buy the gold, otherwise wait until next month. However, I do not know how that compares to DCA into gold in a bull market. As long as real interest rates remain negative, gold will remain in a bull market."