Like many HP'ers I'd imagine, I am not a gambler. I wager on stocks, but small amounts. If I'm in Vegas, I'm looking for the $5 table. If I have a stock hunch, I would generally throw $1,000 at it, $2,000 max. I like security, I like firmness with my investments. I like cash. COP and GLD too, but mainly cash.
Sure, I could have made a boatload following my own advice, shorting the homebuilders that have already crashed. Could've made a fortune buying spec condos in Phoenix in 2003 and then getting out by 2005. But I'm not a gambler.
I won't be the type of person who makes a fortune then loses it all.
So, with that type of personality and investment philosophy, what's a person to do in this environment? It almost feels like if you don't gamble a bit, you could get killed, really killed.
Why? Because if you touch stocks or bonds, you'll probably lose as this market just drifts lower and lower. Shorting seems wise, but can backfire real quick with a merger announcement or manipulation.
If you keep your money in US Dollars, you'll probably lose as we inflate our way out of this disaster. If you're in real estate, we KNOW you'll lose.
Even gold and silver are just treading water. Foreign stock funds - they're going down too - when the US gets a cold they sneeze. And foreign currencies are like throwing darts.
So, if you believe inflation will roar, the economy will tank, the dollar will keep falling, the US has gone over the cliff, and you're just looking to hold onto what you got, what's a non-gambling person to do? Serious replies please, my US$-heavy portfolio needs some ideas.
August 13, 2006
Hello, my name is HP (Group: Hello HP!). I'm not a gambler. I don't have a gambling addiction (Group: Awww!)
Subscribe to:
Post Comments (Atom)
53 comments:
The biggest gamble is do you believe the housing market will have a hard landing or a soft landing.
http://bigpicture.typepad.com/comments/2006/08/are_economists_.html
or
http://video.google.com/videoplay?docid=-2640239019877885520&q=UCL
if you're living in Britain, move money into pounds. otherwise, forign cash funds. US$ cash funds. CDs. T-bills. a little gold. Keep your powder dry.
Resource rich, population poor Canada.
Vast lands, energy, minerals, water.
Low population, smaller entitlement system.
Keith
Consider Canadian and
Ausrralian based Uranium
stocks.
Couple Im in are
Pinetree PNP Toronto
and Mega
Also the 500 pd gorilla
Cameco CCJ on Ny ans
Toronto exchanges
Great Job
Tom
1st order- NO DEBT. Owe no man or institution any money.
2nd order- NO STOCKS. The market could (should) crash in the next 1-36 months.
3rd order- 10-20% of your Net Worth in gold bullion (no stocks).
4th order- 10-20% in foreign currency (Cando, NZD, Swissie) I like the NZD (great country).
5th order- The remainder of your cash should be in TIPS (Treasury Inflation Protected Securities).
has anyone read into the NAFTA and SPP agreements? how about the creation of the AMERO once canada the us and mexico are joined?
could that be the reason fro big dicks "deficets dont matter" statement? bankrupt america, collect all the foriegn goods possible then default and recreate a new currancy....
Alright serious responses cuz Keith's US$ are in a pinch:
1) Have at least 1 years supply of food on hand - after 8.22 it will cost you $5K - if you can get it anywhere at any price.
2) Stick with common rounds - like 45s/40s/223/308/20 or 12 Ga.
3) Solar arrays to charge flash lights /run sw radio along with all the wiring and a AC/DC (hells bells;) inverter and a few deep cycle batteries.
4) pre-1965 silver junk coins and american eagle/kruggerands (well recognized.
5) Must have - books - "where there is no dentist and no doctor"
6) Must have a source of fresh clean water - you may not be able to buy this at any price is a few years.
If you have kids or a wife - of course more food etc.
You also may consider having all your teeth removed so you are not ripping them out of your head later in life with pliers.
Ok - did I say gold...oh yeah - gold.
Play it conservative, always work for me. I was completely invested, all in solid blue chip stocks throughout the 90's. late 98 or so a broker told me i was a dinosaur because i was not invested in Nasdaq! He said, "you gotta be where the money is being made!" He mentioned the dotcoms and other high-tech stocks. This guy did everything but laugh out loud, when i said,
"lets wait and see!
Well, here we are several years later, the dinosaur still stands! Not wealthy, but still invested in the same boring dividend stocks!
Not sure where the broker is anymore, his phonecalls stopped pretty much during the crash. But i do know where most of the dotcoms are!
T-bills, TIPS, GOLD, (I like holding the coin, not the paper)
For the last 5,000 years in a row, all the people who needed an answer to that question always came back to gold, because there IS nothing else. But many will come to appreciate that fact too, too late.
Richard Daughty
...the angriest guy in economics
The Mogambo Guru
You could always move some money into Prosper.com and lend it out to other Americans. You'll still be exposed if America goes over a cliff, but you are better more on people. As long as everyone you lend money to doesn't lose their job and go bankrupt, I think it should be fairly safe. By safe, I mean safer than a lot of other investments you mentioned.
Short-term CD's (3 month to 1 year) that you reinvest into ever higher rates as they come due. That, and TIPS
Watch gold/silver take off around september, i'll be out by feb or march when gold is over 800 and silver over 17. No doublt in my mind it will happen, the dollar will be fallin.
I make my money working, saving, and a few hundred at a time on lots of sure thing investments that I understand because they are in my field. I have kept up with inflation by keeping my cash growing through income savings. I have lost to inflation but kept my buying power the same through saving. My hunch is that we always go into some sort of recession where my buying power will increase when certain assets deflate. The booby prize for my course of action is that I have no debit, own all my assets outright, have no stress, and don’t have to make business decisions based on needing the money to service debit. No desperation.
For the gold "gurus" out there, I have a simple quiz:
a. What are the gold reserves held by central banks?
b. What nations hold the largest percentage of these reserves?
c. What is the ratio of private gold holdings to central reserves?
d. List all countries since 1900 that replaced their fiat currancy with gold specie. Use a second page if necessary.
e. multiple choice: A world in which fiat currency becomes worthless will:
1. not matter to geniuses such as myself that have wisely bought CDN Maple Leafs.
2. look like post-Tito Yugoslavia times ten, in which I will be beaten to death for my coins, food, and shoes.
f. rhetorical question: how's that Au you bought in 1986 working out for ya?
rydex just launched a few more currency funds the USD is not your thing. there are 6-7 currencies you can hold now. I don't research currencies, but here are some symbols.
FXB
FXC
FXE
FXM
FXA
FXF
FXS
some people like the BEARX fund or the prudent bear safe harbor fund.
( Sell gold; it's in a speculative bubble, just like real estate. )
you have any valuations or metrics to back that up.
how does a double equal a bubble?
Gold has only doubled yet it takes 3 times the energy to mine it.
(e. multiple choice: A world in which fiat currency becomes worthless will:
1. not matter to geniuses such as myself that have wisely bought CDN Maple Leafs.
2. look like post-Tito Yugoslavia times ten, in which I will be beaten to death for my coins, food, and shoes.
f. rhetorical question: how's that Au you bought in 1986 working out for ya?)
1. I'll buy protection with all my gold.
2. this is not post-tito yugoslavia
3. rhetorical question: how's that gold and silver I bought throughout 2004 working out for me?
(a. What are the gold reserves held by central banks?
b. What nations hold the largest percentage of these reserves?
c. What is the ratio of private gold holdings to central reserves?
d. List all countries since 1900 that replaced their fiat currancy with gold specie. Use a second page if necessary.)
a. 31,000 tonnes according to the IMF
b. the US with 68% of their reserves in gold, IF they still have them. germany, the IMF, France and Italy round out the top 5 as top holders of gold in tonnes
c. I don't know, but the new gold ETFs hold more gold than a lot of nations.
d. none, why would they willingly give up their power to essentially print money, spend on pork and run budget deficits unless they had to?
that doesn't matter, people all around the world still consider gold and silver money and they treat it that way. the thing is, these people are the one's who are seeing income growth and economic growth.
The death of the dollars is premature. . .
If I can give you any advice in my 30 years of investing - never bet against the house. (USA) Yes, we have the ups and downs, but I bought my first stock - Merck in 1976 while a grad student, and reinvested it until 1998. I have been through inflation/deflation/stagflation - Carter,Ford,Reagan,Bush I and II and Clinton. . .the Dow went from 800 to 11,800 and back to 8,000 and back to 11,000. . .if you buy good quality stocks (Buy and hold -don't buy and forget) you will do well. . .just reinvest the dividends. Out of 50 stocks, I have only one without a dividend.
Utilities are a nice place to be - although a bit overpriced now. . .don't expect to get rich quick. . .it took me 30 years.
(if you buy good quality stocks (Buy and hold -don't buy and forget) you will do well. . .just reinvest the dividends.)
there are long periods, I"m talking 10-20 years, when you can hold stocks and make NO money.
Everywhere on virtually every investment site people are saying BUY GOLD!
This reminds me of BUY REAL ESTATE in 2000.
People who know nothing about investments are giving this advice.
Stay Away. Next mania.
Safest bet?
A basket of short stock. Don't short too much of any one so you have diversification.
The large homebuilders are still a long, long way from their 2000 prices and the ugliness has barely affected their financials yet.
Another could be some consumer stocks.
And last but not least, the lenders. Lend, cfc, new...
Being short in these groups is also a very good hedge to your long stock or long mutual fund positions.
"there are long periods, I"m talking 10-20 years, when you can hold stocks and make NO money. "
This is true, but check the charts for MRK and CVX (Chevron) from 1975 - 1985 MRK was flat, but I reinvested dividends. . .CVX went up, but I held MRK till 1998 and it split 5 times. . .CVX went up during the awful 1970's. . .I did mention 30 years here - Keith is a 30 something as I recall. . .he may want to retire by 60.
( Everywhere on virtually every investment site people are saying BUY GOLD! )
maybe on some places onthe internet, but they are exceptions. even the mainstream sites are only pimping it for diversification, then they go write back to writing about stocks.
where are the fundamentals that say gold is a bubble?
it's not in the dow/gold ratio. it's not in the mainstream press. I don't hear people talking about gold out in public. if gold were a bubble we'd be in the $2,500+/ounce range.
(This is true, but check the charts for MRK and CVX (Chevron) from 1975 - 1985 MRK was flat, but I reinvested dividends. . .CVX went up, but I held MRK till 1998 and it split 5 times. . .CVX went up during the awful 1970's. . .I did mention 30 years here - Keith is a 30 something as I recall. . .he may want to retire by 60.)
some stocks do well(or ok) but not all. the dow lost almost 70% in real terms from it's 60s high to it's 70s low.
gold and silver soared over 1,000% during the 70s.
Give it to me. "It is more blessed to give than to receive"
LC
John:
Using the gold you bought in 2004 as a guide to long-term performance is about as useful as the flipper that bought a PHX condo in 2002.
Your snarky answer to (d) supports the arguments of the anti-gold-as currency camp.
The problem of hard core gold bugs (as opposed to those who use gold as a hedge)is confuse their moral judgments with financial analysis.
But who knows, maybe you're right. If so, come see me; I'll be the one selling the protection.
by the way, most of my shorts via put options for Jan '07 placed just in the past few weeks are doing insane.
I know I can lose it all, and quickly, and I really try not to watch them as I'll hold until January after the complete consumer meltdown, and see where we are.
Day to day, who cares, and sometimes they go up or down over 50% in a day. Really. But.. for now... here's how they look:
Federated (FD) +FDMF -42.86%
Circuit City (CC) +CCMX -17.02%
Lowes (LOW) +LOWMA +0.00%
Housevalues (SOLD) +UZZXB +100.00%
Pacific Sunwear (PSUN) +PVQMW +90.24%
Countrywide (CFC) +CFCMG +54.72
Home Depot (HD) +HDMU +113.64%Amazon.com (AMZN) +ZQNMZ +127.12%
Todays stock market investors are soon to be tomorrows IDIOTS. Don't be an idiot. The stock market is gambling, not investing.
Gold is money and silver isn't. Central banks own NO silver.
Why in the world would central banks have ANY gold, in reserve, if it wasn't REAL money?
thanks everyone for the advice. I'll be looking this week at currency etf's - but I want to make interest, not just hold currency. I'll be looking to add some more January puts too, especially on mortgage companies and retailers.
Christmas 2006 will be a disaster in America.
Is Kenny Rogers dead yet?
Remember Kenny Rogers Roasters, and their stock that shot to the moon then went bankrupt?
Good chicken though.
The Riddle of Oil
"For no one - no one in this world can you trust. Not men, not women, not beasts. "
"This you can trust: oil."
I just got options enabled on my e-trade account. It seems to me odds are in your favor if you bank on decline, despair and ruin.
So maybe I'll have some beginners luck with puts.
Any suggestions?
I want to short Fannie Mae FNM because I'm sure that will turn into financial WWIII when all the facts are uncovered but FNM's connection to the U.S. Government makes me think all will be forgiven, like General Motors. Buying stock in GM is like buying a ticket on the Titanic AFTER it hit the iceberg!
Kieth you are so right when you say "if you don't gamble a bit you can really get killed".
Come on over to "Dogcrap Green - Bet" And bet just a bit on a four game parlay that I'll lay out for you.
Nail one parlay and you are set.
On serious note - Attacking the risk when the oppertunity is there is what has to be done so long as you understand laying low during the other times is all part of the game.
South America
Copper can fall 70% and the Copper producing economies are still sitting on a "gold" mine.
Peru looks good to me. Maybe Chile
((d) supports the arguments of the anti-gold-as currency camp.)
not if you understand the limitations imposed by the gold standard as opposed the fiat system. gold is already a currency, as is silver, no matter what system a gov't is on. gold and silver don't need a gov't to be a currency.
why did Nixon go off the gold standard? they were flooding the world with dollars and someone finally called them on it.
No one mentioned BEGBX, the intermediate term international bond fund(non-dollar denominated AAA rated government debt). Leading economic indicators are bearish, with the housing panic consumer spending will tank,global gdp will falter,interest rates will be lowered, the dollar will tank and BEGBX will shine brighter than gold.
Diversify with BEARX and VFITX.
As far as betting against the $ and shorting stocks, remember this: Markets can remain irrational longer than you can remain solvent.
hey boycot ,joe here can you please email me some info about that begbx and vfitx. very intersting what is it, thanks azjoecooll@cox.net
Read Penniless Billionaire. If you believe in inflation, and how can you not when you see how many trillions of dollars (fiat paper with only the backing of the USA) has been pumped into the world economy, even a worn out sock will be worth more than your money. Hard assets are anything but paper.
After WWI Germany inflated for two reasons, one, they feared a communist revolution if there was mass unemployement and secondly because the rich manipulated the markets to get even richer. The upper 1% have the credit-worthiness to borrow millions of fiat dollars and they don't want to pay them back. If they inflate they can buy assets today with paper and inflate away their debts. Do you think that mind set has vanished? Then, with hyperinflation they got even richer and when they felt the game was up, new currency, the Reichmark. So maybe we will do the same. Still, for all the irrational talk about prices, what is a number?
All the years I though my native Californians numb to the real meaning of their mortgage debt over the pst 30 years I see that all of them were smarter than I gave them credit for as they cashed out their paper fiat gains and transfered them into real gains, like mansions in Oregon, Phoenix, Texas, Florida and anywhere they could. Of course this is part of California, export your inflation. Once you've inflated outside then prices can rise again in California to start the wealth transfer all over again.
I'm sorry but the $6,000 a year income my father made in 1962 and the $18,000 house they bought in California is just a number. So what, $60,000 a year and $180,000? All paper.
Our government will do the same as the Weimer republic because of the same two reasons, fear of massive unemployment and social unrest and the need for the rich to consoladate their debt into real wealth by inflation. When the system gets unmanageable, social unrest do to hyperinflation and the elimination of the riches debt acquired assets then the government will get serious and issue a new currency and start the game all over again.
At that point the only currency the public will accept will be gold.
Atlas Shrugged, a good read.
Cool-
I will be "Farm Girl". And my ex Navy Seal, four tours of duty- Vietnam Vet, ex-CIA Farmer husband is here to back me up.
Keith- Doing a great job!
I have a couple of old Brititsh pounds from 1978... are they still good?.?...I'll send them to you to spend in a good British Pub. Beer, Blog, Beer. It's all Good.
"You got to know when to hold'm and know when to fold'm" - The Gambler
Atlas Shrugged is a piece of crap. Most people that read it have only read the bible for thirty years and so to them its a big deal.
"I have a couple of old Brititsh pounds from 1978... are they still good?.?...I'll send them to you to spend in a good British Pub. Beer, Blog, Beer. It's all Good."
We have £1 coins now, £1 notes went out in the early 80s, but the Scotch have £1 notes still.
As for buying a beer even if he could spend them, £2 wouldn't buy him half a bitter!!
Someone mentioned that SILVER is
not money. They are right, its
not money now. Historically, when
it behaved as money, it had like
1/15 the worth of gold. Recently,
behaving as a commodity,it has been
as low as 1/57. I believe that silver
is a very cost effective hedge to
accumulate now, as when the the
hyper hits the fan, silver will gain
substantially as it re-monetizess.
Just notice the recent change from
1/57 -> 1/52 in the recent sucker rally.
Price suppresion by silver shorts etc
is another good reason to get in soon,
at this next bottom this week or next.
See Ted Buttlers writing on this.
Aside from that, I think it pays to deversify. No one really knows what
will happen, we are so screwed!
Cash, bearx, fx, dbc, food and vice.
I think it is too late for oil per se,
but commodity stocks in general and oil
juniors if you can get them.
I think Keith is right. If you don't
gamble, you will be screwed. And, you
may be screwed anyway.
-El Maha
1. Housing index fund - Short (prevents getting killed if you short a single housing stock and it pops on a mergers & acquisitions announcement).
2. Oil ETF - Long (ANY bad news and oil is going sky-high)
3. SLV (Silver ETF) - Long (need to be patient -- The crash will happen)
4. Gold/silver bullion
5. Housing... In two years!
Buy land. They don't make any more of it.
So what's wrong with reading the bible?
"2nd order- NO STOCKS. The market could (should) crash in the next 1-36 months.
3rd order- 10-20% of your Net Worth in gold bullion (no stocks)".
I understand about regular stocks, but why do you say no gold stocks? During the 1970s gold rush, gold stock prices were going the the roof. And in 1993 Vanguard gold fund gained 100% when the housing market was crashing.
Joe, here's a link:
http://moneycentral.msn.com/investor/partsub/funds/snapshot.asp?Funds=1&Symbol=BEGBX
I'm not too afraid of inflation,people will not bid prices up in the near future.Both real wages and asset prices are srarting to decline.
Response to question about gold stocks.
I wouldn't recommend gold stocks for several reasons. One, they're paper. Paper won't do much good if you need money and a terrorist decides to bomb the stock exchange. It's possible!
Secondly, miners are well known for overstated claims of product in the ground.
Thirdly, the price of metals is very manipulated via PM stocks. If you really want to gamble by 5-10%. But, still put a substantial portion in bullion! Gold is very portable and traded in EVERY country. Gold is still money.
Post a Comment