How to make money by investing in Gold?

[GeneralGogol]

Habits and history are quite magical in the minds of voters, politicians, central bankers, investors and traders. But that's not my "end game" prediction.

Every "end game" prediction in the past decade was wrong, every Gold bug doom-prophet (Jim Rogers, etc) was continuously wrong for decades and underperformed a simple diversified basket of indexes.

For some reason all the tin-foil-hat-conspiracy sites (think ZeroHegde) figured out that the best way to profit from their readers is to pump Gold as "the only safe haven". History shows that it is not a safe haven. The sooner people realize that, the better for them it will be. But sadly Gold bugs are just like crypto bugs, stuck in their cult mentality without looking at data that clearly proves their hypothesis wrong.

Predictions such as "Gold will double in 10 years", even if you're right and pick the exact moment to buy and sell - making 2x in 10 years is awful performance on an annual basis, and it is even more awful when it comes with a much higher degree of volatility and risk.

In the long term Gold is an underperforming investment:

 

[369]

That does not mean much nor is it any indication of quality of strength.
You can claim Bitcoin from Oct 2020 till Apr 2021 and say 10k to 65k and that makes it a great asset.
Or Amazon stock from xyz to zxy.

You could do this everything, maybe the span is lower or larger or different.
It is how the banks sell you their magic fund and stellar performance just for you to discover that their marketing material has similar tactics.

A good indicator where the price will go is to garther information what central banks pay for gold between each other if you are able to get that kind of information

 

[fc70]

Every "end game" prediction in the past decade was wrong, every Gold bug doom-prophet (Jim Rogers, etc) was continuously wrong for decades and underperformed a simple diversified basket of indexes.

For some reason all the tin-foil-hat-conspiracy sites (think ZeroHegde) figured out that the best way to profit from their readers is to pump Gold as "the only safe haven". History shows that it is not a safe haven. The sooner people realize that, the better for them it will be. But sadly Gold bugs are just like crypto bugs, stuck in their cult mentality without looking at data that clearly proves their hypothesis wrong.

Predictions such as "Gold will double in 10 years", even if you're right and pick the exact moment to buy and sell - making 2x in 10 years is awful performance on an annual basis, and it is even more awful when it comes with a much higher degree of volatility and risk.

In the long term Gold is an underperforming investment:

View attachment 4057

Why don't you also put up the graph that shows that the Nikkei has gone nowhere for 30+ years?

 

[JohnnyDoe]

Why don't you also put up the graph that shows that the Nikkei has gone nowhere for 30+ years?


View attachment 4059

There are so many reasons for this.
I will cite 2:

1. Failures are not allowed. If you read Antifragile: Things That Gain from Disorder (Incerto): Taleb, Nassim Nicholas Nicholas: 9780812979688: Amazon.com: Books you will understand why this has a negative impact.
2. Try to open a bank/brokerage account in Japan.

 

[369]

gold is being reimplemented into the monetary system and best of all it won't be 1:1 but with leverage which means gold will be the ultimate money.
people need to understand what that means for gold and than look how much fiat exist and how much gold exist which needs to match after the change of the monetary system.

Do your math and you will see why gold will be the final winner

 

[JohnnyDoe]

gold is being reimplemented into the monetary system and best of all it won't be 1:1 but with leverage which means gold will be the ultimate money.
people need to understand what that means for gold and than look how much fiat exist and how much gold exist which needs to match at the change of the monetary system.

Do your math and you will see why gold will be the final winner

Not smart to do math with wrong numbers

 

[369]

Not smart to do math with wrong numbers

i know for how much gold has been traded between central banks back in 2012........
its nothing close to what its being traded now and how much more fiat has been created since 2012 ?
After the monetary system transformation gold needs to equal fiat with x leverage ......
There is a reason why central banks are buying gold for the new monetary system and it won't be a 1:1
If you understand IMF and SDR's you understand as more gold a country has as more money its allowed to mint.
Thats why china is buying so massiv amounts of gold which is needed to be able to mint enough CNY (SDR) to get a world reserve currency
Gold will be the key asset

gold is not a good investment and performces very bad.......yeah thats exectly the semtiment they want to the public till they make the monetary system change over a weekend where after it will be to late to invest in gold......
Even the paid pseudo guru shills claim to go into silver instead of gold
DON'T TOUCH GOLD ......their clear message

 

[JohnnyDoe]

i know for how much gold has been traded between central banks back in 2012........
its nothing close to what its being traded now and how much more fiat has been created since 2012 ?
After the monetary system transformation gold needs to equal fiat with x leverage ......
There is a reason why central banks are buying gold for the new monetary system and it won't be a 1:1

We don’t know anything else than what they want us to know. Transparency is zero.

 

[369]

We don’t know anything else than what they want us to know. Transparency is zero.

there are insiders who disagree with the davos agenda.
however they all went into silent mode which i can understand if you know what is coming

 

[khinkali]

@GeneralGogol if you look at those data since the USA ended convertibility of the dollar into gold (or other reserve assets), T-Bills won't look so good.

In the wake of 1972, gold outperformed stocks (DJIA and even total return) for some years. Total return beat gold through the 80s (when monetarist economists were valued by politicians), and most of the 1990s. Question: Why have gold prices (measured in USD) stayed low through the 2010s with so much QE?

That is a a nice chart from 1800. Only one of those lines is relatively flat. I would argue that you could go back 20x as far and find that gold is the one flattish line over the long term. That is quite some pedigree.

Predictions such as "Gold will double in 10 years"

That is exactly how I think people should stop seeing this. It makes little sense to me to say that "this price went up 30%" or "there has been 30% inflation" if the thing that you're measuring with shrunk in value by 30%.

If in 2022 we were to redefine 1 kg to be (0.7377607×1040)hΔνCs/c2 (roughly the mass of a half litre of water instead of roughly 1 litre) then the 2023 2kg bags of flour would be the same size as a 2021 1kg bag of flour. Would people proclaim "flour inflation!!" or just notice that kilograms are not what they used to be?

Yet, people are quick to proclaim price inflation or see "great investment" in the wake of currency debasement.

If you understand IMF and SDR's you understand as more gold a country has as more money its allowed to mint.

Gold will be the key asset

Can we say "key measuring stick"? I see a world where the asset could be cobalt, gas, whatever. The issue here is how to measure it. "I have assets worth X gold" vs "I have assets worth X USD" (or CNY).

Perhaps I'm flogging a dead horse and most people aren't going to think in terms of principle eigenvector or dimensionality reduction when they plan their debt or trading contracts, but I think that we're entering a time when multiple global blocs and growing exposure to "foreign" currencies (both fiat and crypto) could lead people to be more aware of currency heterogeneity and look for better solutions than we've been using for the last fifty years.

 

[369]

@GeneralGogol if you look at those data since the USA ended convertibility of the dollar into gold (or other reserve assets), T-Bills won't look so good.

In the wake of 1972, gold outperformed stocks (DJIA and even total return) for some years. Total return beat gold through the 80s (when monetarist economists were valued by politicians), and most of the 1990s. Question: Why have gold prices (measured in USD) stayed low through the 2010s with so much QE?

That is a a nice chart from 1800. Only one of those lines is relatively flat. I would argue that you could go back 20x as far and find that gold is the one flattish line over the long term. That is quite some pedigree.



That is exactly how I think people should stop seeing this. It makes little sense to me to say that "this price went up 30%" or "there has been 30% inflation" if the thing that you're measuring with shrunk in value by 30%.

If in 2022 we were to redefine 1 kg to be (0.7377607×1040)hΔνCs/c2 (roughly the mass of a half litre of water instead of roughly 1 litre) then the 2023 2kg bags of flour would be the same size as a 2021 1kg bag of flour. Would people proclaim "flour inflation!!" or just notice that kilograms are not what they used to be?

Yet, people are quick to proclaim price inflation or see "great investment" in the wake of currency debasement.






Can we say "key measuring stick"? I see a world where the asset could be cobalt, gas, whatever. The issue here is how to measure it. "I have assets worth X gold" vs "I have assets worth X USD" (or CNY).

Perhaps I'm flogging a dead horse and most people aren't going to think in terms of principle eigenvector or dimensionality reduction when they plan their debt or trading contracts, but I think that we're entering a time when multiple global blocs and growing exposure to "foreign" currencies (both fiat and crypto) could lead people to be more aware of currency heterogeneity and look for better solutions than we've been using for the last fifty years.

no we can't

i can't understand what people don't understand about gold.

Gold was flat for over a century.Of course it was flat because it was bounded with the USD where you always received x amount of USD for one ounce.So how could it increase when it was not a hedge at that time ?
It become in the 70's a hedge when they finish the gold standard and thats why its price raise and fall against USD till today.

NOW all fiats are dead they are being run against the wall on the purpose to implement in the end the final new monetary system which will be deflationary (not inflationary like now) and linked to gold and being virtual.

So we are bringing back the gold standard (not the 1:1) which means the end of hedge.Gold can't be seen as a simple hedge anymore.
And here comes the part which it seems only the big guys understand (and thats why they are horting gold)
That after implementing the new system via SDR all existing fiat on the world needs to match all existing gold in central banks with leverage x.
So have yourself a look how much fiat exist and how much gold and do your math what the price of one ounce needs to be to match all fiat.

What i can say is central banks paid back in 2012 5 digits per ounce when trading between themself
2018 a known group calculated all USD fiat vs all gold USA holds and come to a price of $98k per ounce so US central banks gold would equal to all existing fiat in USD at that time
and now in 2022 where the minting of fiat exploded and keeps being minted what do you think the equal price would be ?
Of course its not a 1:1 standard like before nixon but it doesn't need to be as its new function for countries to be able to mint x times more money than the gold is worth makes its value explode

 

[khinkali]

no we can't

Fair enough. I'm confused though. When you say "not a 1:1 standard", what do you mean that is different from my position? Just "i have a little gold so that can back much more of my paper/digital currency?" That seems a smaller goal than "i have a bunch of stuff, with X value in gold" to issue against?

Gold was flat for over a century.Of course it was flat because it was bounded with the USD where you always received x amount of USD for one ounce.So how could it increase when it was not a hedge at that time ?

I'm thinking 000s of years, not 100.

 

[GeneralGogol]

Why don't you also put up the graph that shows that the Nikkei has gone nowhere for 30+ years?

How is the Nikkei related? Show me where I told you you should buy only the Nikkei...

YOLOing your entire portfolio into Japanese is as dumb as YOLOing your entire portfolio to the S&P (OK maybe slightly dumber but still dumb).

Nowhere did I write you should only invest in the US, or Europe, or anywhere else.

The point is that diversified portfolio spread across many different indexes, countries, asset classes, leads to better results with lower volatility.
Choosing one asset class or one asset as the holy grail of investment is just bad risk management.

 

[backpacker]

The point is that diversified portfolio spread across many different indexes, countries, asset classes, leads to better results with lower volatility.
Choosing one asset class or one asset as the holy grail of investment is just bad risk management.

True!
The big question is how to achieve this diversified structure best: A global multi asset ETF, a mutual fund (total return fund)? Or starting with equity in multinationals like Unilever/Nestlé/Rio (just examples) and then mixing it DIY by adding other asset classes ... (?)

 

[369]

Don't get me wrong you guys are talking a lot of liberty and freedom but in the end you still keep talking to invest in ETF's which is using your money for voting rights in cooperations to dictate there their agenda.
ETF's are a big no go for the people who are not in their club.
You basicly give them power via your own money which is being used against yourself

 

[backpacker]

Don't get me wrong you guys are talking a lot of liberty and freedom but in the end you still keep talking to invest in ETF's which is using your money for voting rights in cooperations to dictate there their agenda.
ETF's are a big no go for the people who are not in their club.
You basicly give them power via your own money which is being used against yourself

This is -unfortunately- a matter of fact.
However, how can a small individual investor achieve the necessary diversification, as correctly mentioned by @GeneralGogol ?

 

[GeneralGogol]

The big question is how to achieve this diversified structure best: A global multi asset ETF, a mutual fund (total return fund)? Or starting with equity in multinationals like Unilever/Nestlé/Rio (just examples) and then mixing it DIY by adding other asset classes ... (?)

Global multi asset ETF is the easiest solution and most diversified.

Unilever\Nestle\Rio can all go down -50% because they are all essentially just one sector - consumer defensive. However it is extremely unlikely to happen to a true global diversified-rebalanced ETF that is spread over the entire world (and preferably not too much US-based). An example is Vanguard Total World or VWRL. Even in 2020 the worst drawdown was 30% and if you added some Global Bond ETFs your drawdown would've been even lower.

If you are worried that Blackrock somehow find out that you are "not in the club" of some tinfoil-hat 369 that lives in an alternate reality where secret agents are constantly conspiring against him, or are worried that they are funding an agenda that is against you, you can always invest in sectors that are pro your agenda. Maybe you are against the ESG propaganda, you can invest in an Oil Sector ETF, there are plenty of anti-ESG ETFs. However this exposes you again to sector risk. Blackrock has only one agenda and it is making money.

 

[369]

All ETF's will go down massivly.We are in a recession with stagflation.The worst scenaria.Now you got the threat of bank crisis ,blackouts ,and loan crisis.Good luck with your global ETF's
Only some small niches may go up

 

[backpacker]

All ETF's will go down massivly.We are in a recession with stagflation.The worst scenaria.Now you got the threat of bank crisis ,blackouts ,and loan crisis.Good luck with your global ETF's
Only some small niches may go up

Where would you invest your money: Private Equity (typical niche), gold, fixed term deposit, Treasuries, real estate?

 

[bastard]

like with any other commodity. You just need to buy low and sell high

yeah same story all the time.