X marks the spot (Bullion)

#1
YankeeVol

YankeeVol

Raised a Yank, Born a Vol
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Mar 11, 2010
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#1
Anybody else buy bullion?

I have quite a bit of silver. Just starting to dabble in gold.
 
#7
#7
BTW, physical metal and raw land are terrible long term investments. No income is generated therefore there isn't any compound growth. Trade or hedge, but that's better handled using exchange traded securities. Land that's eventually worked or developed is different. Raw land actually has negative cash flow. RE taxes and insurance is paid out and it isn't depreciated for cost recovery/taxes.

Crypto currencies/Bitcoin are similar. No positive cash flow. But they are highly volatile which is great for traders and unlike real estate is a liquid asset. Physical metals are liquid, but the buy/sell spreads are probably unfavorable. Especially for more exotic metals.
 
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#8
#8
I try to have part of my 401k track it. It's actually a lot, but in a 401k there is only one mutual fund I can buy that tracks it, and it's got significant tracking error. It's not a good investment, but obviously I'm happy now (today). Busted clock and all that.

Right now the gold buy/sell spreads are extreme for the kind of stuff people put in a shoe box. By that I mean, this is the worst time to start dabbling, right when everybody else is. (I mean, there is pestilence, after all). FWIW. I don't have any. I would probably favor ETF's if I could. I can't buy ETF's in my 401k.
 
#9
#9
Thunder Good-Oil said:
BTW, physical metal and raw land are terrible long term investments. No income is generated therefore there isn't any compound growth. Trade or hedge, but that's better handled using exchange traded securities. Land that's eventually worked or developed is different. Raw land actually has negative cash flow. RE taxes and insurance is paid out and it isn't depreciated for cost recovery/taxes.

Crypto currencies/Bitcoin are similar. No positive cash flow. But they are highly volatile which is great for traders and unlike real estate is a liquid asset. Physical metals are liquid, but the buy/sell spreads are probably unfavorable. Especially for more exotic metals.
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When I first bought silver it was over $30. It’s now down to $17. I bought some now just to break even from what I bought back then. If it gets to $25 again I can at least make a little.

Tbh, it’s just more of a hobby than anything.
 
#10
#10
Thunder Good-Oil said:
BTW, physical metal and raw land are terrible long term investments. No income is generated therefore there isn't any compound growth.
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Buying metals isn't necessarily about "investing", but more about wealth protection and maintaining your purchasing power. Now having said that, with the gold/silver price ratio at over 100/1 when the historical average is 16/1 and the ratio of mining production today is closer to 10/1, then when a correction comes, either the price of gold would have to come down far enough to bring us back to a historical mean or the price of silver would have to jump up to satisfy the historical mean. Now, since central banks and national reserves have gold, how likely is it that gold is going to fall to $300/toz in order for that correction to occur?
 
#11
#11
Rasputin_Vol said:
Buying metals isn't necessarily about "investing", but more about wealth protection and maintaining your purchasing power. Now having said that, with the gold/silver price ratio at over 100/1 when the historical average is 16/1 and the ratio of mining production today is closer to 10/1, then when a correction comes, either the price of gold would have to come down far enough to bring us back to a historical mean or the price of silver would have to jump up to satisfy the historical mean. Now, since central banks and national reserves have gold, how likely is it that gold is going to fall to $300/toz in order for that correction to occur?
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I said it's best for trading and hedging and noted that it's a really bad long term buy and hold investment. Useful for portfolio diversification as well if that's not considered a version of hedging. Unless you're Goldfinger or in the Hunt family 40-50 years ago, accumulating a high proportion of precious metal in a portfolio probably isn't a great idea.
 
#12
#12
Thunder Good-Oil said:
I said it's best for trading and hedging and noted that it's a really bad long term buy and hold investment. Useful for portfolio diversification as well if that's not considered a version of hedging. Unless you're Goldfinger or in the Hunt family 40-50 years ago, accumulating a high proportion of precious metal in a portfolio probably isn't a great idea.
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Their ultimate failure was they played with "paper silver" contracts instead of physical silver at the very end of the road in 1979/1980. Had they just stayed in the physical market, who knows what might have happened. They were very close to throwing the entire system into chaos.... for the better. Once The Hunt's experienced the Nixon Shock and saw gold demonetized and the loss of their oil assets in Libya early in the decade, they were pretty close to closing the decade with cornering the silver market and bring the traditional east coast banking interests to their knees.
 
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