Bought some gold bullion today

[Guister]

Hey guys,

I went to the store today and low and behold, came out with a pure gold coin, from the Canadian mint, weighing 1/2 ounce.

Worth about $600. No big deal.

My rationale? Once the apocallypse hits it's going to be gold that's the true currency once again, and paper money will be worthless. Might as well stock up now.

http://www.bullioncoinsandbars.com/images/products/gold-coins-ml.jpg

[Latrinsorm]

If I were you I would take that gold coin straight to the supermarket and get as much of the cheapest bottled soda as you can. HOARD THOSE CAPS!

[thefarmer]

http://www.madonnacollect.co.uk/twentypoundsfrontnew.jpg

[Drew]

I have a bunch of silver coins, not really saving it for zombie apocalypse, but why not.

[Cephalopod]

I have a feeling zombies aren't going to accept gold. If you're smart, you'll stock up on brains now.

[pabstblueribbon]

Plan on moving to South Carolina?

[Buckwheet]

I have a bunch of silver coins, not really saving it for zombie apocalypse, but why not.

http://chrislee.me/zds/Order_NOW_files/shapeimage_3.png

[Marl]

If I were you I would take that gold coin straight to the supermarket and get as much of the cheapest bottled soda as you can. HOARD THOSE CAPS!

I have boxes and boxes of caps and scrap metal in the basement....I am prepared

[Guister]

It's partly for the apocalypse but also cause I think having gold on hand is really cool. I mean it's the ultimate currency. You can always trust in its value. Plus it's shiny.

[Parkbandit]

Hey guys,

I went to the store today and low and behold, came out with a pure gold coin, from the Canadian mint, weighing 1/2 ounce.

Worth about $600. No big deal.

My rationale? Once the apocallypse hits it's going to be gold that's the true currency once again, and paper money will be worthless. Might as well stock up now.

http://www.bullioncoinsandbars.com/images/products/gold-coins-ml.jpg

Welcome to a year ago..

[Drevihyin]

I would prefer $600.00 in ammunition or rations.

[Guister]

Who said anything about there being zombies at the apocalypse? For Christ sake, why will it be an all-out war? I'm just thinking in terms of rebuilding the economy.

[Androidpk]

I would prefer $600.00 in ammunition or rations.

.

[BigWorm]

It's partly for the apocalypse but also cause I think having gold on hand is really cool. I mean it's the ultimate currency. You can always trust in its value. Plus it's shiny.

If shit goes down, why would gold be worth anything?

[Archigeek]

And why would you buy it at what is arguably it's peak in value? Go buy some depressed stock instead. In 4 years it will be worth 2x what it is today, and your gold coin will be worth $297.

[Bobmuhthol]

If only markets worked like that. Give me some stocks that are going to earn 19% annualized yields and I will buy them right now.

[Keller]

As soon as I saw a gold coin from Canada I thought this was going to be a Gold Medal pun involving the 51st states poor showing.

You let me down.

[Guister]

If shit goes down, why would gold be worth anything?

Because gold has historically always been a valued object, for as far back as civilization can be documented. It's shiny, scarce, malleable (among other properties), and for some strange reason inspires a type of greed in its posessor. Gold rules.


And why would you buy it at what is arguably it's peak in value? Go buy some depressed stock instead. In 4 years it will be worth 2x what it is today, and your gold coin will be worth $297.

That's a good point. I wasn't really thinking of this in terms of an investment, or at least a short-term one. I just wanted to grab it and hold onto it. I'm not sure how long I'll have it for, but hopefully it will be for a while. I just think it's cool to own.

[Archigeek]

If only markets worked like that. Give me some stocks that are going to earn 19% annualized yields and I will buy them right now.

Actually, the market does work like that.

I look for undervalued stocks, estimate what I think they're worth and what they might be worth in the future, and buy them if I like the company's fundementals and feel that the current valuation is low. I only monitor about 10 stocks at a time at the most, in order to maintain my knowledge of the companies I'm invested in.

One of the big mistakes a lot of investors make, is that when they buy for the long term, they don't precisely value the company before they buy. If you don't determine a value besides the sale price, you shouldn't be buying, and you should always buy with the intent to sell. Buy and hold doesn't mean forever: buy low, sell high. Too many people try to ride a wave and get that basic principle backwards. Determine what you think is low and what you think is high, BEFORE you buy, and then be disciplined about buying AND selling. And for goodness sake, buy companies with good fundementals and good leadership.

As for the current market, I can't claim to have done very well. I'm currently down about 11% over the course of the last 24 months. The 18 years prior to that though, I'm probably at about your desired 19% anualized yield. Gotta do your own homework though bud.

Anyway, we're hijacking his thread I suppose. For the record, while I might not invest in them, I think gold coins are cool.

[Bobmuhthol]

If you have 23 times the amount of money you started with 18 years ago I would strongly recommend becoming a fund manager.

[Clove]

I'd buy his fund! I'd be pretty tickled with a 5% annualized yield that held over 18 years!

[NicAlbion]

Hm. Funny, I thought after the apocalypse humans would all start shanking, shooting, and raping to get whatever they need.

Damn you Bible, you tricked me.

[Drew]

If only markets worked like that. Give me some stocks that are going to earn 19% annualized yields and I will buy them right now.


In the last six years I've made about 35% annually. It's extremely possible but it's harder to do it in an institutionalized way.

[Archigeek]

See, now I'm more impressed with Drew. The last six years were tough years to earn money investing. And if you read what I said, I carefully select only a handful of stocks. Not enough diversification for fund management. As for the 18x realized gain, I don't precisely know the number, but I can pretty much recite for you chapter and verse everything I've bought in the last 20 years and roughly what I gained. I think I've probably taken too much off the table to buy a house rather than keep it all in the market to have made an 18x gain, but I've done pretty well. Here's my track record:

1990: bought Costco at a split adjusted price of 9 bucks a share, sold all 600 shares in 2001 to fund my house at a price in excess of 50 per share.

1996: bought Restoration Hardware at 14 a share, decided their distribution system had problems so I sold it at 28 a share 5 weeks later.

1996: funneled the Restoration dollars into 400 shares of AMD at split adjusted 9 per share: sold half to fund the house in 2001 at more than 40 per share, sold the other half at a loss a couple years later at around 7 per share when I was out of work. You can't hold a stock like AMD that takes a cast iron stomach, when you need a nice steady cash reserve. If I hadn't had to sell, the other half would have been in the money too, but that stock is a roller coaster. To understand it, you have to understand Intel.

1997: Egain, bought 300 shares at around 13 per share... sold at around 3 per share. Ouch. Bought 1000 shares back later at just over a buck and sold at a 25% gain in a dumb investment. Both of those were dumb investments obviously though.

2002: Bought the Costco back as soon as I could afford it, when the price had dropped down into the low 30's. Sold it before the recession in the mid 60's when I decided the market was over priced in general.

2005: Bought Autodesk in the 20's, sold it when I sold the Costco at just a hair over 50 if I recall correctly, so roughly a 2x gain.

Currently own: 200 shares Intel, 100 shares Ingersoll Rand, and 100 shares of GE. I will freely admit to not doing my research on GE, and for the time being I've been spanked a little on that one. The other two are a hair below even since I bought them between 2 years and 18 months ago. Net result on those currently is that I'm down about 11%.

So there you have it. Not bad. Not all winners, but not bad. When I do my research, I do my best investing, and I've done far better than any of the fund managers who are managing my frickin' retirement money that's much more diversified. One of these days I'll take control of that and then I won't have to worry about it.

I won't give you any stock picks, but I'll give you some million dollar advice that runs somewhat contrary to conventional wisdom instead:

1. "buy and hold" is not a complete strategy. You must have a plan to sell as well. Analize current value compared to price and estimate it vs some future value and price.

Don't over-diversify. I doubt you have a ton of time to study stocks. Follow ONLY as many stocks as you can stay educated about, and chose your buy AND sell points carefully. You don't need to own them all. I follow about 10 and own only 3 currently. Over-diversification insures that you will have average results. When prices aren't right, keep the money in cash and wait.

And this is good conventional wisdom:

DO diversify beyond stocks. Always keep a nice healthy rainy day fund, and additionally buy some conservative investments too, like EE bonds or something. I have some bonds that have produced guaranteed 4% and 6% returns since the early 90's.

[Kuyuk]

if I get more than $100 to my name I might invest it :(

[Clove]

Except for the 1990 Costco there's not enough data to determine whether you got an average 18% appreciation year over year. However, if you grabbed an impressive yield off that particular investment. At $9.00 a share in 1990 18% until 2001 would have made the sell price approx $65.00 a share. If you sold it around $50.00 share that's damned good.

Statistically the mob has gotten better yields making random picks based on name recognition than experts (picking carefully researched stocks etc).

Diversification is extremely important for security; not sure what you mean by "over-diversified".

I agree entirely that you should have a specific sell goal, not just buy and hold until some vague condition of "it's high-enough" is met.

[Archigeek]

Except for the 1990 Costco there's not enough data to determine whether you got an average 18% appreciation year over year. However, if you grabbed an impressive yield off that particular investment. At $9.00 a share in 1990 18% until 2001 would have made the sell price approx $65.00 a share. If you sold it around $50.00 share that's damned good.

Statistically the mob has gotten better yields making random picks based on name recognition than experts (picking carefully researched stocks etc).

Diversification is extremely important for security; not sure what you mean by "over-diversified".

I agree entirely that you should have a specific sell goal, not just buy and hold until some vague condition of "it's high-enough" is met.

By over-diversification I mean buying more than you can understand, just because someone says you need to diversify. Diversification IS important, but not as important as understanding each company you own, and what the right price is for that company. That's right, I said OWN. That's the mistake people make. They buy a bunch of stuff all over the map because someone said they should diversify. What happens? What should obviously happen and is the end result of diversification if taken to the extreme: average results. If average results are your goal, just invest in a spider fund and get it overwith. I contend that if you're going to take the time to invest, you should have a goal of above average results.

[Guister]

As for the current market, I can't claim to have done very well. I'm currently down about 11% over the course of the last 24 months. The 18 years prior to that though, I'm probably at about your desired 19% anualized yield. Gotta do your own homework though bud.


You're being modest. That's an exceptional return, considering the market environment over the last 24 months.


I will freely admit to not doing my research on GE, and for the time being I've been spanked a little on that one.

GE is one of those stocks, as I'm sure you know, whereby the market forces dictate price. Warren Buffett himself could not dissect that one. Of course your point on leadership being an essential criteria is good, and holds true for GE. Consider the legacy of Jack Welch, the best overall manager in the past century arguably.

Still, what happens when a financial meltdown breaks the markets, or when the United States suffers nuclear war? I'm grabbing all my gold and running for the hills.

[pabstblueribbon]

You can't eat gold, or use it as a weapon or tool.

Well, maybe as a weapon... doubt you'll get very many golden rounds out of that coin though.

[Guister]

But of course. I would have all the arms and ammo that I needed by that point. Not only am I hoarding gold but I'm hoarding weapons and ammunition to protect that gold. Which also might come in handy when pillaging.

[Kuyuk]

And fighting zombies.

[pabstblueribbon]

Probably better get some silver in case there are zombie werewolves too.

Zombie werewolves will fuck your shit up.

[Archigeek]

Yeah, zombie werewolves will most definitely fuck your shit up. Silver bullet, but it's got to be to the brain. A silver pick axe will work too. Or an ice pick. Yes, an ice pick. Or stock investments. They hate those.

[Guister]

Are you suggesting tha zombies and werewolves can somehow breed into a superspecies?

[pabstblueribbon]

They dont breed...

But yeh, it's in the bible.

[IorakeWarhammer]

i bought gold a year or two ago when it was 800 an ounce

[Guister]

What did you buy? Did you buy a fund? Or physically gold?

[Clove]

You can't eat gold, or use it as a weapon or tool.Gold makes excellent electrical wire and has other industrial applications. In that sense you can use it as a tool. Just sayin'... but you should still have lots of silver for the zombie werewolves.

[DoctorUnne]

I'd buy his fund! I'd be pretty tickled with a 5% annualized yield that held over 18 years!

Considering the S&P 500 has returned 9% annually over the past 140 years I'd try to do better.

[Jayvn]

I honestly thought this was a warclaidm i bought coins thread....

[DoctorUnne]

The S&P 500 has strictly been around since 1957. I don't have all of the historical data but it was 100.38 in June 1968 and hit its highest close at 1565.15 in October 2007. Don't know what happened from 1957 to 1968 but June 1968 - October 2007 saw 7.25% annual returns.

http://www.moneychimp.com/features/market_cagr.htm

has 10.55% from 1968-2009.

Do your numbers include dividends? I thought it was pretty common knowledge that equities have returned ~10% over the course of the last century.

[kookiegod]

Yeah, zombie werewolves will most definitely fuck your shit up. Silver bullet, but it's got to be to the brain. A silver pick axe will work too. Or an ice pick. Yes, an ice pick. Or stock investments. They hate those.

I dunno, but my stock portfolio been averaging about 12.5 percent since the recovery started. Its bouncing around like a superball up and down 100 points since last months issues with Greek soverign debt and the pull back of credit in China, but considering where we were 18 months ago, its been doing pretty good in that I recovered all my losses and making decent to good profits in equities right now.

I'm about 65 percent in equities and 35 in bonds, mostly tax-free munis.

~Paul

[Archigeek]

I'm with you on the superball action Paul. Mine's been bouncing up and down like a yoyo, but yes it has been very good since the recovery started. I can't really complain about that... except that, "since the recovery started" is debatable. Lets just say it's been pretty good for about the last year. But the year before that pretty much sucked ass. I side-stepped some of it, but not as much as I would have liked. Unfortunately, there are huge sections of the economy where no recovery has appreciably started, and more unfortunately, one of them is mine. Still employed, and also working with a friend to help him start his own business. If it takes off I'll jump ship and that should be fun.

Like your portfolio mix, though I'm a little leary of muni's right now. I think you're fine, but watch them carefully. Their value is going to bounce around for a bit too as a lot of municipalities are in a tough position financially. Hopefully that little bit of extra risk will come with a little bit of extra reward.

[Bobmuhthol]

<<Do your numbers include dividends?>>

No, price of index only. Whoops.

[kookiegod]

I'm with you on the superball action Paul. Mine's been bouncing up and down like a yoyo, but yes it has been very good since the recovery started. I can't really complain about that... except that, "since the recovery started" is debatable. Lets just say it's been pretty good for about the last year. But the year before that pretty much sucked ass. I side-stepped some of it, but not as much as I would have liked. Unfortunately, there are huge sections of the economy where no recovery has appreciably started, and more unfortunately, one of them is mine. Still employed, and also working with a friend to help him start his own business. If it takes off I'll jump ship and that should be fun.

Like your portfolio mix, though I'm a little leary of muni's right now. I think you're fine, but watch them carefully. Their value is going to bounce around for a bit too as a lot of municipalities are in a tough position financially. Hopefully that little bit of extra risk will come with a little bit of extra reward.

Yah, everything is watched carefully on an ongoing basis, not daily cause thats when sell off panic ensues and you lose money on a daily bounce, but things are sold if they trend down, or news on the horizon indicates a sector is in for some prolonged turmoil.

I'm taking the cash I have on the sidelines and buying an apartment building or two (got a final offer of 1.25m on a 21 unit building that tosses off about 30k a year after expenses and looking at a 33 unit as well) and I'm going to Austin TX to look at a franchise of an exciting entertainment game company the week of the 15th, and likely to buy in and grab some primo territory and be back into biz for myself. That should make decent coin per the pro-forma I've done and talking to a bunch of current owners, its the next big thing in entertainment.

Should be fun and profitable. Meanwhile, I keep the portfolio intact and hopefully growing.

~Paul