With the dollar gaining some lost ground, and all those commercials hyping gold, anyone think that is may be time to short gold? P.S. Many thanks to those "Fools" on this board that convinced me to not short gold over a year ago.Moneyshaker
When the US was downgraded to a AA credit rating from AAA, Warren Buffett said he thought we should be AAA or even AAAA. His reasoning was that we owed our debts in dollars and we could pay our debts in dollars so......WE COULD JUST PRINT MORE DOLLARS! He followed that up by saying , “Now if you're talking about inflation, that's a different question”. Here is the article. http://seekingalpha.com/article/285546-warren-buffett-s-drum...His comment on the credit rating received WAY more attention than his follow-up comment on inflation. But it seems to me, if we do have inflation that there is no where for the price of gold to go but up. So for me, I would not short gold. I have about 12% of my portfolio in gold.Jeb
Shorting gold seems to be a very dangerous proposition. One could easily find as many (or more) reasons for the gold price to go up vs. what you said why it could fall. I'm not saying it's climbing further - less so in the very short term. But shorting gold right now.....I don't think so.HH
Thanks for your comments. Gold has increased on market uncertainty, volatility, and a falling dollar. I guess the question is are we headed for more uncertainty? Arguements for more volitility would include unemployment figures, European debt obligations, devaluation of the dollar, etc. There are definitely some scary times ahead. But if I has my choice between $1900 and an ounce of gold, I would take the greenbacks every time. Moneyshaker
"But if I had my choice between $1900 and an ounce of gold, I would take the greenbacks every time."I would make that choice today because today that would be a 3% premium to the price of gold. But as with all investing, the goal is to make your best determination about what that investment will be worth in the future......in a year's time, or two years, or 5 years. Would you have made that same choice 5 years ago? If I had my choice between $650 and an ounce of told I'd take the greenbacks every time? Because 5 years ago that is what it was trading for. Gold is a cornerstone of my portfolio and I think it will be for a while.
Hi Moneyshaker,Definitely, the choice is yours. And it's not at all unreasonable to NOT put any money into gold. (I am invested into gold through ETFs as an inflation hedge though.)But remember what you had asked originally....you wanted to short gold, right? And that's an entirely different question. And my recommendation would still be clearly NOT to do that. (I mean NOT shorting gold.) It's still okay to disagree with me but you had asked for feedback....and that's mine.Good luck,HH
HH and Jeb,Thanks again for you insights. After reading your comments, it is clear that shorting gold has more risks than I realized initially. I went ahead and took a small position in an inverse gold ETF. This may not be logical, but I still think that there is a good probability of a gold bubble. That brings up another issue- if there is a bubble, timing it correctly would be impossible. In the end, maybe the best way to "short gold" is to keep my liquid assets in dollars.Moneyshaker
"In the end, maybe the best way to "short gold" is to keep my liquid assets in dollars."Ha ha! I guess when you put it that way you are indeed correct. And it looks like I am doing the same thing as well. ;-)
The world's financial situation is a mess. Even at these high prices, I would not sell or short gold/silver today.I applaud the Fools for recommending PHYS and I bought on the rec.They made a critical mistake in also recommending the sale of PHYS without really looking at the big picture, IMO.I am now long on cash and metals. I am up PHYS 39%.
I reluctantly followed the PHYS sell rec as I am trying to mimic the Pro portfolio, but I bought it back along with Sprott Silver during the recent market rally when prices fell a bit. Would love to see Pro reengage in metals as a hedge if they see fit to do so.
I would also like to see a hedge via long gold, but would prefer that it were a leveraged option play of some sort. Perhaps a BCS or diagonal with GLD or similar ETF.Lance
l.I have sold an itm covered call on Gld at this time. Take a look at that and if you like, try to get the better of the b/a on the call. I am using 60 day interval rollout targets.Obviously you do better closer to the money, mine is strictly an anchor at 150 at this time. I'm not convinced of the case for gold but if it rolls bac to 150, I'm not going to be displeased with the lot. Especially if gold decoupled from here with the market.Swd
I put 40% of my assets in GOLD, which proves it's a bubble.The company I invested in takes mine waste that has about 0.2 ounces per ton of gold in it, and processes it into a more reasonable 20 ounces per ton concentrate. Another company can then process that into actual gold, where it can be smelted into pure gold.There are millions of tons of this waste with fractions of an ounce per ton (1) in nature and (2) at every single mine that has ever operated. Some local Alaskans take weekend trips to old mines to load buckets of dirt from abandoned mines to shake out some gold (and that's just panning for larger chunks, they themselves leave fractions of an ounce per ton in their yard or wherever).Why doesn't everyone do this? Because gold costs about $300-$400 per ounce to mine, and at 0.2 ounces per ton, it costs about $550 per ounce to concentrate. People have done it in the past, but when commodities return to a "cost to dig up" valuation, these tailing operations are the first to become unprofitable. Gold will return to a reasonable premium over the cost to dig up. If you think inflation will mean it will soon cost $5,000 an ounce to dig up, then gold is going to go up to $5,000+; but eventually, it will return to a normal price, because the higher it goes, and the longer it stays there, the more supply operations such as ours will come online to profit from it. The more distressed-people will sell their jewelry, and the more people will realize it has no purpose, and thus no value floor.I hope that isn't for a long time from now, so my $ investment has time to produce some % profits from the concentrate operation. But someday in the future, the price of gold will drop below the cost of us to extract it from the tailings. I have no doubt.
hows that bubble doin ya fellas....echo echo echo......
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