The time is now to start buying silver and gold....

reply to post by brocket99


thanks

- see above post

ok - sorry about that, there is prob. only 1 girl in this world who could say something to me and just totally throw me off course.. ahhh! anyways unlike a market, I just cant seem to figure her out so ill just stick to this for a bit

So first lets look at this

1. If we invested $1000 into each the DJIA (dow jones industrial average)and Gold in 1933 we have results of (as of earlier this year in March, so feel free to adjust numbers in your mind)


DJIA = $145,000 (rounded and you must add it in the last 3 months)

GOLD = $44,000 (same rules apply)


2. Now, over the past 8-9 years or so, it has been a different story (if we just looked at this WHOLE THING through the past 8-9 years.. we have..)


DJIA (2000 through 2008) = -19%

GOLD (2000 through 2008) = +241%


- Now follow me here bc this next part is SUPER IMPORTANT and I have explained this before but I will explain it again on this thread.

- Every 10 years STATISTICALLY AND HISTORICALLY

1. You can expect a 10% return in 10 years in the market

2. For every 10 years that we do NOT equal 10%, then NEXT 10 YEARS HISTORICALLY WILL YIELD US BACK TO OUR 10% AVERAGE OVER THE NEXT 10 YEARS


So what does that mean?

It means that now we are prob -10% in the market (after the recent run up), the NEXT 10 YEARS HISTORICALLY AND STATISTICALLY will YIELD 20% to get us BACK TO OUR AVERAGE of 10% PER EVERY 10 YEARS

So, when you account for that, it is telling you a couple things.


1. You have a great opportunity cost for not being invested all the time in the market.

2. When I say all the time, I do not mean FULLY INVESTED, but DOLLAR COST AVERAGING

3. NO ONE can time the market

4. You must always play for historical averages no matter how bad the world seems around you, thats how I knew to buy waay back at DOW 7200, bc historically I have seen this EXACT trend play out, and it was 1974, and if you go back we had a pretty damn good market till early 80's after a little shakeout in the mid 70's (expect the same thing again this time around)

5. The reason why I say you are 10000x too much in gold is because of all the previous, you will be losing ground to CPI and inflation when the market is going to historically make its move and gold might move to 1500 lets say... but dont you think now after seeing the historical information that the odds are much more in your favor of just dollar cost averaging into the marketplace?






Now I got this from another website, but the person that made this up drew some terrible conclusions IMO, but I will tell you what I see.


I see the historical price of gold at a high when the market is cheap relative. See, the average investor sees this ass bullish for gold, when its the other way around. ITS ABOUT BUYING LOW AND SELLING HIGH, not getting worked into this fantasy about 5000 gold and all the BS that ensues down the line.

This chart is showing you that right now gold is at a PREMIUM to the market - NEVER BUY ANYTHING AT A PREMIUM when you know you can get it lower, thats like buying futures contracts over night over fair value and just losing all your money when the market opens the other way on your ass in like 5 mins..

I promise you no big investors are staking big claims in gold right now, if they are they are either hedging their bets against the inverse of something, or just feeding disinformation that happens way more than you think. I would like to take the example of a few guys on the trading floor of the NYSE that said earlier this year they couldnt figure out why markets were going up and they would be short, while you know they were just making a KILLING off the fools that were throwing short volume their way.

Same thing goes with sites called "goldbug".com... think about the angles here.. everyone is looking to make $ off you fools (not talking to anyone in specific, but you know what I mean)

The market is always looking for a new suckers, and when I hear $hit about a "suckers rally" it makes me laugh because these suckers are up over 50% if they were even in the NASDAQ let alone many 100% in certain stocks..


So im sure I left out a lot, and Im sure that I am not always right, but Im more right than wrong, and Im usually pretty confident before I post anything like this on this board etc..

reply to post by brocket99


I agree with land and housing, although the time to get in was a month or 2 ago with the rates, if you have good credit etc. down the line I would 100% agree still

Gold:Stocks - major cycles:


1900 - 1929: stocks outperform gold

1929 - 1932: gold outperforms stocks

1932 - 1966: stocks outperform gold

1966 - 1980: gold outperforms stocks

1980 - 2000: stocks outperform gold

2000 - ?: gold outperforms stocks

Originally posted by GreenBicMan


Now I got this from another website, but the person that made this up drew some terrible conclusions IMO, but I will tell you what I see.

Terrible conclusions ? The DJIA:GOLD ratio is what it is , and on May 29 , 2008 , when the chartista annotated that graph , the ratio was as stated: 14.34 , or , DJIA-12,594:GOLD-878

Originally posted by GreenBicMan
I see the historical price of gold at a high when the market is cheap relative....

This chart is showing you that right now gold is at a PREMIUM to the market....

Not by historical metrics.

The only flaw in your linked chart is the limited 10yr time frame. The DJIA:GOLD has a looong , multi-year wave cycle. To capture the predictive strength of this ratio (market tops/bottoms) , we have to look back in time.

Please compare the dated peaks & troughs in this chart to the major cycles I posted above....

[atsimg]http://files.abovetopsecret.com/images/member/c5fd16bde574.gif[/atsimg]

Across the last century , the DJIA:GOLD bottoms @ 1 - 5 , with the median ratio being 5.4. As of last Friday' close , the ratio now stands @ 9.49.

With respect to major market corrections , history tells us that equities are still expensive when priced in Gold....either Gold continues to appreciate relative to shares...shares correct further...or perhaps a bit of both.


Out of time here , but in closing , when counting coup , please remember to adjust those capital gains for inflation....

Dow Jones Industrial Average Inflation Adjusted.

UGLY: Inflation-Corrected Dow

reply to post by OBE1


You are misunderstanding me

The chart relates back to a page where he states a lot of stuff that is not relevant, not just what is on the charts

And I am not sure what the rest of your post means, could you please explain yourself more?

Thanks

reply to post by OBE1


Anyways, IMO at least, quoting my last post this is all you really need to know


1. If we invested $1000 into each the DJIA (dow jones industrial average)and Gold in 1933 we have results of (as of earlier this year in March, so feel free to adjust numbers in your mind)


DJIA = $145,000 (rounded and you must add it in the last 3 months)

GOLD = $44,000 (same rules apply)


That pretty much sums it up

I am more or less talking about about silver namely... I could see silver going sky high in the next couple years....

reply to post by iamjesusphish


Perhaps

If you really believe that DCA into it, just dont go "all in" at once... that could hurt..

GL

Beware of speculative investments. Speculation in real estate is what got us here. Last year the bogeyman was Oil Speculators, remember $5 gas and congress wanting to go after oil speculators? They blindly ignored housing speculators.

If you invest in speculative investments, have a plan to exit before the other investors can.

reply to post by Dbriefed


So investing in silver when trends show it is going to keep going up to historic highs, ebay is an amazing way to get silver...

Originally posted by GreenBicMan
You are misunderstanding me

Got it , thanks.

Originally posted by GreenBicMan
And I am not sure what the rest of your post means, could you please explain yourself more?

No prob GreenBicMan , I understand...the issue is a bit more complex than....

Originally posted by GreenBicMan
1. If we invested $1000 into each the DJIA (dow jones industrial average)and Gold in 1933 we have results of (as of earlier this year in March, so feel free to adjust numbers in your mind)


DJIA = $145,000

GOLD = $44,000

As simply as I can....

In 1933 , when Gold was confiscated and ownership outlawed by Roosevelt , the price was fixed @ $20.67oz. A year later Gold was revalued @ $35oz where the price remained relatively constant (fixed) until Nixon 1971. Congress didn't restore Americans' right to own gold until Dec 31 , 1974 , the same day that the Comex Gold Futures contract was launched.

What I'm suggesting here , is that if you have the time , and the incentive , perhaps a GOLD/DJIA perf chart with a 1974 - 2009 time sequence would offer a more appropriate comparison.

Every dog has it's day , including Gold vs Stock returns....very distinct cycles. The declining DJIA:GOLD ratio tells us that Gold is outperforming this cycle. Will the ratio decline to historical values ? Allow me to answer that question with another; Do you have faith in the USD/US monetary authorities ?

I also suggested the importance of adjusting capital gains for inflation (real returns vs nominal returns). If you have trouble understanding the mechanism by which the dollar is gradually , historically , sacrificing buying power against the price of goods and services , while Gold’s inherent worth (buying power) remains constant , it might make a worthwhile study , especially as it applies to stock returns - links provided in my previous post.






[edit on 9-9-2009 by OBE1]

reply to post by OBE1


interesting - 74 was energy crisis as well, and thats when we had our recession that mimics this one (IMO at least) i will try to make this on stockcharts.com or somethng.. give me some time

unfortunately i cannot go that far back/or cant find the commodity charts that compare going back that far

the best i can do is this from 1997 till now and this is the CBOE GOLD INDEX vs DJIA


finance.yahoo.com...:symbol=^dji;range=19941003,20090908;compare=^gox;indicator=ema(200)+volume;charttype=line;crosshair=o n;ohlcvalues=0;logscale=on


Perhaps someone with a membership to stockcharts.com could find this or someone with some more time

reply to post by GreenBicMan


GBM,

Comparisons of gold versus inflation usually peg gold at its intra-day high back in 1980. If you track gold versus inflation since 1975 for example, when Americans were permitted to legally own gold bullion coins again, the ratio is much better, if we still use 1980 or almost any year as a starting point and compare the purchasing power of the U.S. dollar since then.

The dollar has lost about three quarters of its purchasing [ower in the last quarter-century while gold has remained steady. In 1932, you could purchase a man’s suit for a $20 bill or a $20 gold coin. Today, a $20 bill will just about get you a pair of boxers, whereas a $20 gold coin is worth approx $1,000 and will still get you a nice suit.

I grant you that the price seems high right now however, I honestly believe that the price has been surpressed for years and couple that with the inevitable future rise of inflation and we may just see a breakout. I can not see the next quarter gold price lower than 950 as it seems like when it does drop, China steps in and starts buying with its dollars and then the price goes back up.

PEACE,
RK





PEACE,
RK

reply to post by Rigel Kent


We may see a breakout, but here is my PROBLEM

I have no problem getting into some sort of gold derivative/coinage/whatever

But I do have a problem with people starting to yell get in now.. etc..

That to me SHOUTS SHORT THE HELL OUT OF THIS THING

See people on this message board are wrong about investments 90% of the time. If I was rich, I would short the general opinion. Not to be mean, but thats just how it is. So, if you must, dollar cost average in, then I have absolutely no problem with that. Infact like I said gold may take off right now (doubting, but could) and it may go to 1500 lets say?

But what happens when it drops back down to 800 after that and spends 20 years in that range? Gold is a weird instrument, one I am certainly not too familiar for disclosure, but just do me a favor and dont go all in at one time and you should be ok in the long run.

GL

Ok I'd like to chime in here real quick and hope it's not too late.

First off, I am PISSSSED off, I wrote a long reply and just when I went to hit reply button, for whatever reason, my logitech mouse thought I wanted to "go back" to the last page. So I lost EVERYTHING that I spent all my time writing up. GRRRR!!


I am new to gold/silver and don't want to pretend I am at all knowledgable about this topic. But I am trying to research and do my due diligence. I've read up on the Argentina crisis, Zimbabwe and currently Weimar.

I know that GBM, has been talking about the natural or should I say, historical cyclical cycle of DJIA and Gold/Silver.


But isn't today's EXPONENTIAL printing of money going to change that normal financial timeline?

I am not looking into buying physical gold/silver to GET rich, I want to buy it to help insure the possibility of the USD crash and preserving the value of what I have now in USD form.


What about the historical financial data for Argentina/Zimbabwe/Weimar that before the crisis, I'm sure someone could have said, "Don't worry nothing is going to happen, look at our history".


So this is what I fear, I understand that the best tool is history. But what history also shows is that excessive printing can doom a nations currency. And I don't think any other country has ever printed as much money as we are now...

Very interesting thread. I myself buy a little silver now and then. (and lots of comic books).

Its ok to buy a bit just don't go crazy. (put off that big Mac now and then and buy something that you can hold till later (or a comic) whatever.

here is a good site with easy buy and sell for silver bullion.nwtmint.com...

Originally posted by RUFFREADY
Very interesting thread. I myself buy a little silver now and then. (and lots of comic books).

Its ok to buy a bit just don't go crazy. (put off that big Mac now and then and buy something that you can hold till later (or a comic) whatever.

here is a good site with easy buy and sell for silver bullion.nwtmint.com...

Thanks for the link. That's another thing I'm confused about since I'm new to all this. Which sites are reputable sources of buying gold/silver.

I am not interested in paper gold/silver certificates. I want the physical thing in my house.

So I'm not sure of the process of buying gold is like any other items you buy on the internet like buying a PC for example.....

And are all gold coins created equal? Stuff like that....

There is a massive lack of understanding of gold it seems which is heartening in some ways, as it's just another bullish factor for gold.

Keep telling yourself "but its at all time highs!". Keep telling yourself "but you can't eat gold!".

Let's see. The Dow closed on Sep 11, 2009 at 9,605. EXACTLY 8 years ago, Sep 10, 2001, the Dow closed at 9,605. Yep, sensational returns over 8 years, especially considering the devaluation in the dollar that has also occured over that 8 years.

Meanwhile, over that same period, gold is up 300-400%. Gold is in a long-term cyclical bull. The dollar is toast.

My only advice is to research gold well, before buying in. It is manipulated (but this manipulation is coming to an end, thankfully) and has long been manipulated by several main players. This reign is coming to an end, supported by the fact gold closed over the psychologically important 1000 mark on Friday for the first time ever - and right when the Dow closes on the exact same level as it did 8 years prior. Coincidence? I think not.

Gold has been consolidating and building its base for its next leg up. It will be volatile. There will be pullbacks.

When the Dow-gold ratio is 1:1, that's when you should start thinking gold is peaking. We have a long way to go - but don't for one second think that the world's elite and central bankers aren't currently dealing behind the scenes and trying to hoard as much of the only real currency that exists in the world, gold. Paper money is an illusion. Gold is real. Study its history. Study who is buying. Study cycles. Study supply and demand. Study the fiat money system. Study fractional banking. And open your eyes to what's going on the world with the collapse of the financial system.

I am not going to preach to anyone to go out and buy gold, but I will say this: be VERY VERY weary of anyone who downplays gold, tells you it is a bad investment or waxes lyrical on all its supposed negative aspects. They are nothing but snakeoil salesmen, ponzi-scheme worshippers, and disinfo agents at worst, or just plain ignorant at best.

Rant over/

Thanks cloudbreak,

There will always be people for and against buying gold, or stock etc...

I love reading both sides of the arguments as it helps my approach to a lot of things. I do find it hard however to make a decision though when you TRY to be balanced and listen to both sides.

Am I going to jump into some silver/gold coins? I think I am, AFTER I do a little more research. But I am personally not liking what I am seeing going on with all these printing of our US dollar.

Am I going to put all my eggs in one basket? Heck no.

Would love to hear more insights on this. Anyone else?