Gold AU

[Roarmeister]

With the recent rise in the price of gold, what do you think about your investments?

[iced]

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@Roarmeister wrote:

With the recent rise in the price of gold, what do you think about your investments?

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I'm pretty happy with my stock positions still. Precious metals are shiny and nice to look at, but I don't really see them as a long-term investment hedge. The sky isn't going to fall, the government isn't going to collapse, and we're not going to fall into some dystopian future where the only wealth that survives are precious metals.

Stocks can crash, but they eventually recover if you bought smart. Speculate on penny stocks and start-ups and you're rolling the dice, but there's a lot of solid bluechips and ETFs out there that will only go up when you look at them long-term.

Don't get me wrong, gold, platinum, silver, and some other metals tend to hold their value more or less. The thing is I don't invest to hold my value. I invest to grow my value, and there's just far better ways of doing that over a 10-30 year period than gold.

[Roarmeister]

My philosphy is to hold physical gold and silver (if you can't hold it, its not real, you might as well buy a cryptocurrency), plus I have another fund of miners...  About 11% of my holdings are physical; I would rather have 15%.  I hold PMs as a store of value and counter to stocks.  While its nice to see gold increase the last couple of weeks, I believe there is all kinds of upside to the metal.  And while silver SHOULD dramatically rise but at the moment it is heavily manipulated by players like JP Morgan.  In a free market it should be be worth 7x its current value.

[wasCB14]

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@Roarmeister wrote:

My philosphy is to hold physical gold and silver (if you can't hold it, its not real, you might as well buy a cryptocurrency), plus I have another fund of miners...  About 11% of my holdings are physical; I would rather have 15%.  I hold PMs as a store of value and counter to stocks.  While its nice to see gold increase the last couple of weeks, I believe there is all kinds of upside to the metal.  And while silver SHOULD dramatically rise but at the moment it is heavily manipulated by players like JP Morgan.  In a free market it should be be worth 7x its current value.

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I don't know much about market manupulation or precious metals, but I've heard the "JPM is keeping the price of silver low" line for at least 10 years. If there is some mastermind manipulative strategy at work here, it's sure taking a long time to play out!

I'm about 20% Berkshire Hathaway, 70% real estate (quality properties and REITs, conservatively financed), and 10% short-term covered puts and calls. I do think US stock valuations are a bit high, and I'm not interested in smaller or more speculative companies at present valuations. I'm definitely a bit defensive in my portfolio.

Real estate makes more sense to me than gold in the event of high inflation. Rents tend to rise with inflation and debt falls in real terms.

And if there's little or no inflation, at least I get a little income.

[Roarmeister]

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@wasCB14 wrote:

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@Roarmeister wrote:

My philosphy is to hold physical gold and silver (if you can't hold it, its not real, you might as well buy a cryptocurrency), plus I have another fund of miners...  About 11% of my holdings are physical; I would rather have 15%.  I hold PMs as a store of value and counter to stocks.  While its nice to see gold increase the last couple of weeks, I believe there is all kinds of upside to the metal.  And while silver SHOULD dramatically rise but at the moment it is heavily manipulated by players like JP Morgan.  In a free market it should be be worth 7x its current value.

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I don't know much about market manupulation or precious metals, but I've heard the "JPM is keeping the price of silver low" line for at least 10 years. If there is some mastermind manipulative strategy at work here, it's sure taking a long time to play out!

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Yes, it has taken a long time to play out.  JPM took on Bears Stearns short positions after they bought them out in 2009 and have been milking and tampering with the market ever since.  They have made billions, perhaps trillion $ on their manipulation.  It took years to bring this to the courts, not because of lack of evidence but big money has lots of power and they can fight back.  There have been now 6 people charged with the manipulation and the number of lawsuits against JPM is growing.  The problem is, they need to go against the top dogs including Dimon.  JPM has worked themselves out of a net short position and is now the largest owner of physical silver.  Their position is far larger than Warren Buffet's when he tried to corner the silver market and both are larger than the Hunt brothers back in the 80s.   Yet the Hunt brothers are pilloried while JPM looked like they were going to go scott-free.  Well, that won't be true for much longer.  FWIW, JPM has been fined a min. of 35 billion in the last 15 years on illegal activity, but until now nobody has paid a personal price or gone to jail.  ScotiaBank, who is just as blood guilty, is desperately trying to get out of the PM market before the prices rise and they take the fall.  HSBC lost 200 million in ONE DAY because of their short position backfired on them.  Their house of cards is going to come down on them.

Sorry for the very late post but I thought you and others should know that these "rumours" are not rumours, but are very very real.

[wasCB14]

I'm reading a bit about JPM selling futures while it was buying physical silver.

Is it true or false that JPM, as a custodian of SLV's silver, allows people to exchange their SLV shares for physical silver?

[Roarmeister]

In theory or in practise? 

[iced]

Unless it's in something like silver coins which at least have some collectible and aesthetic merit, why would anyone even want to exchange for physical metal? It's just taking up space and it still has to be sold for cash to be spent, so why not just keep it as a digital holding?

I wouldn't want my oil or corn commodity holdings as physical barrels of oil or bushels of corn, so why take physical silver?

[wasCB14]

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@iced wrote:

Unless it's in something like silver coins which at least have some collectible and aesthetic merit, why would anyone even want to exchange for physical metal? It's just taking up space and it still has to be sold for cash to be spent, so why not just keep it as a digital holding?

I wouldn't want my oil or corn commodity holdings as physical barrels of oil or bushels of corn, so why take physical silver?

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In times of panic and distrust in the financial system, some retail buyers are willing to pay a price far higher than the digital price for physical silver.

Now why this is, I don't really know.

Greedy, opportunistic dealers?

A lack of confidence that the digital silver can be accessed by investors?

A lack of confidence in the audit or accounting of an ETF?

During times of panic, I'm not sure if dealers are willing to pay the same sort of premiums to an investor wanting to sell.

[wasCB14]

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@wasCB14 wrote:

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@iced wrote:

Unless it's in something like silver coins which at least have some collectible and aesthetic merit, why would anyone even want to exchange for physical metal? It's just taking up space and it still has to be sold for cash to be spent, so why not just keep it as a digital holding?

I wouldn't want my oil or corn commodity holdings as physical barrels of oil or bushels of corn, so why take physical silver?

---

In times of panic and distrust in the financial system, some retail buyers are willing to pay a price far higher than the digital price for physical silver.

Now why this is, I don't really know.

Greedy, opportunistic dealers?

A lack of confidence that the digital silver can be accessed by investors?

A lack of confidence in the audit or accounting of an ETF?

During times of panic, I'm not sure if dealers are willing to pay the same sort of premiums to an investor wanting to sell.

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Having read the comments on a few youtube clips discussing the price disparity, it sounds like dealers are just being greedy/opportunistic, charging what buyers are willing to pay. Dealers are unwilling to pay a big premium over spot for physical silver for their inventory.

If dealers had the same concerns as retail buyers...the same distrust in the spot price or "paper silver" value...then they should be willing to pay above it for physical inventory. But it sounds more like those who happen to have inventory are making a windfall profit while those without inventory are just patiently waiting for physical prices to rationalize.