What investment will keep up with inflation that is not the stock market? Gold?

[JeffKeryk]

And Tesla was a niche car company for rich stupid people in CA.
Going belly up any day now...
EVs are stupid. Elon is whack. Better short that TSLA!

The 2018 Model 3 Mid Range money is easily $700K today.
That's one expensive car...

According to Fortune:

As Tesla stock surges, it’s now worth as much as the next six biggest carmakers​

 

[Doc8404]

And Tesla was a niche car company for rich stupid people in CA.
Going belly up any day now...
EVs are stupid. Elon is whack. Better short that TSLA!

The 2018 Model 3 Mid Range money is easily $700K today.
That's one expensive car...

According to Fortune:

As Tesla stock surges, it’s now worth as much as the next six biggest carmakers​

I missed that boat

 

[dareo]

gold get slaughtered by the right stocks.

Had you bought enron, or GM you'd have lost it all.

This is Hindsight Investing, we only pick the winners!

However if you S&P 500'd it all you would be right about even with Gold interestingly enough.

 

[JeffKeryk]

I missed that boat

Yeah, I only have a little myself. 100 shares. Paid about $350 per share, as I recall.

 

[Wolf359]

My measly 20 coins bought for 7K is worth 36K today outpacing inflation by a substantive amount, in a form factor I can hold in one hand, that is fungible.

When did you buy them? How much were they worth last year? Can you really get 36k for it? That might be what they're worth when the gold dealer is selling them but they might not actually give you 36k if you wanted to sell it to them.

 

[Wolf359]

This is Hindsight Investing, we only pick the winners!

However if you S&P 500'd it all you would be right about even with Gold interestingly enough.

Maybe just slightly ahead. But it depends on the time period, that 2001 has the lost decade in it where the S&P 500 didn't do too much, it has exploded in the last decade.

 

[UncleDave]

When did you buy them? How much were they worth last year? Can you really get 36k for it? That might be what they're worth when the gold dealer is selling them but they might not actually give you 36k if you wanted to sell it to them.

03-4 if i recall.

Yes I can get the money from local assayers by walking in off the street (gold has always been easy to sell in gold country)

Or I can resell back to Monex if I want to wait, but then the transaction is recorded.

If a hacker brings down the trading firm thats holding your stocks, or if the building is simply blown up and no one answers the phones how quickly can can you convert stock to currency ? With gold the asset stays with you, but it can only appreciate, cant pay dividends, or split.

 

[PandaBear]

Gold 2001 ~$400
AMZN 2001 ~$10
AAPL 2001 ~.35

So if you were very thrifty in 2001 and invested $10,000 in each asset today would be:
25 ounces gold at spot value = $45,000
1000 shares AMZN = $3,525,500
28571 shares AAPL = $4,428,571

Maybe tech is overvalued and gold is undervalued?

Google didn't IPO till 04, so i couldn't do them.

Houses? At least in my area, apartments were around $75k a door in 2001 and now trading for $200k a door give or take. A luxury home built in 2001 might have only doubled today. So gold beats real estate but gets slaughtered by stocks.

In theory the correct way to value real estate (at least condos) is to include the potential rent + tax deduction - maintenance. I guess you can say it is still undervalued, but yeah real estate is highly location dependent.

 

[PandaBear]

But you didn’t know then what you know now. A lot of people had written off Apple. Amazon was a bookstore.

I wrote off Facebook in 2009 or so right after IPO. I thought it would be just another MySpace. People used to joke that they enjoy spending time on MyFace and SpaceBook. Amazon didn't take off like crazy until cloud becomes the future, actually right now the fastest growth cloud stock Microsoft and prior to the Chinese stock crackdown Alibaba. Apple was recovering at the time, and took off like crazy mainly after 07 or so when iPhone took off.

The biggest problem with picking tech stock is always trying to see things before the mass, so you can bet the mass cannot see things before the mass and most people would miss them.

 

[PandaBear]

03-4 if i recall.

Yes I can get the money from local assayers by walking in off the street (gold has always been easy to sell in gold country)

Or I can resell back to Monex if I want to wait, but then the transaction is recorded.

If a hacker brings down the trading firm thats holding your stocks, or if the building is simply blown up and no one answers the phones how quickly can can you convert stock to currency ? With gold the asset stays with you, but it can only appreciate, cant pay dividends, or split.



View attachment 70413

With gold you get robbed at gunpoint.

 

[PandaBear]

When did you buy them? How much were they worth last year? Can you really get 36k for it? That might be what they're worth when the gold dealer is selling them but they might not actually give you 36k if you wanted to sell it to them.

Maybe not in your neighborhood pawn shop. In Asia the spread is quite low because gold is easy to rework into another shape and form as long as you don't dilute it into 14K or 18K grade junk, just need a bit of heat, unlike platinum.

I still don't understand why people buy stuff with 14K or 18K gold, it is worth way less, and if you want something sturdy either go with platinum or titanium and be done with it.

 

[UncleDave]

With gold you get robbed at gunpoint.

Thats a possibility - just like cash, If a group of punks know you are moving a bunch of it.

Here in rural USA punks know you are equally well armed, and that you are going to shoot back and pick an easier target.

 

[PandaBear]

Thats a possibility - just like cash, If a group of punks know you are moving a bunch of it.

Here in rural USA punks know you are equally well armed, and that you are going to shoot back and pick an easier target.

Not just moving. If you have large amount of gold in a physical location you need constant security. Banks pay a lot of money hiring security to guard their physical gold.

 

[UncleDave]

Maybe not in your neighborhood pawn shop. In Asia the spread is quite low because gold is easy to rework into another shape and form as long as you don't dilute it into 14K or 18K grade junk, just need a bit of heat, unlike platinum.

I still don't understand why people buy stuff with 14K or 18K gold, it is worth way less, and if you want something sturdy either go with platinum or titanium and be done with it.

Jewelry isn't fungible, too much work, risk and headache.

Coins or bullion with a foundry stamp, and of known dimensions are the go to's.

 

[UncleDave]

Not just moving. If you have large amount of gold in a physical location you need constant security. Banks pay a lot of money hiring security to guard their physical gold.

Sure, this is why lots of guys keep their gold/ metal in safe deposit boxes. Just like cash, guns, jewelry etcetera.

 

[Kawiguy454]

While I would admit to gold being fairly rigid in terms of investments, I don't see how it isn't an investment.

I do agree one of its most useful functions is as a hedge against the ongoing debasement of fiat currency.

One could say if you make money with it its an investment and if losing or maintaining at minimum it is an asset (which is why central banks hoard it)

My measly 20 coins bought for 7K is worth 36K today outpacing inflation by a substantive amount, in a form factor I can hold in one hand, that is fungible.

Ill reiterate an example gold only storing value. In ancient rome a gold coin bought a shave, a new suit and shoes and a night stay at roman holiday inn. Today it buys about the same amount of shtuff.

Gold does not increase in value, the value of paper money and so the amount you trade for it changes in value at any given time. It is not an investment because it only ever keeps pace with inflation. This is the reason ppl buy it when trust in paper investments is sketch. A lot of ppl believe the paper investments are subject to heavy manipulation and so possible loss. Just look at gamestop ...one of the rare cases the manipulators appear to gotten hosed.

 

[ekrampitzjr]

Two more quick comments that are relevant here:

The government has actively tracked gold transactions since at least back in the 1980s. Broadly speaking, only the very smallest purchases and transfers are exempt, such you buying one gold coin from a collector.

Since someone brought up safe deposit boxes, be aware that your box is sealed when you die and can only be opened by court order as part of handling your estate. You don't want important documents your executor or heirs might need in there. When it is opened, an accounting will be done and the feds could seize large amounts of cash and gold, considering it as possible unreported income from illicit activity. Look online for horror stories about this. Frankly, anything in a safe deposit box isn't in your possession anyway. What if the bank folds?

 

[UncleDave]

Ill reiterate an example gold only storing value. In ancient rome a gold coin bought a shave, a new suit and shoes and a night stay at roman holiday inn. Today it buys about the same amount of shtuff.

Gold does not increase in value, the value of paper money and so the amount you trade for it changes in value at any given time. It is not an investment because it only ever keeps pace with inflation. This is the reason ppl buy it when trust in paper investments is sketch. A lot of ppl believe the paper investments are subject to heavy manipulation and so possible loss. Just look at gamestop ...one of the rare cases the manipulators appear to gotten hosed.

This is a common trope - that the value of gold never changes, but the value of fiat currency does.
To some extent this is true, but its not an absolute.

I've demonstrated with my own purchase that the metal can substantively outpace inflation, this was largely due to good timing on my part.

In this regard gold is like a stock -except I can hold the product in my hand and exercise it as trade, barter, or exchange it for currency with no one involved but the second party.

The current value of gold barring any gigantic discovery, is largely associated with the cost to retrieve and process it and as long as that number keeps going up so will gold in lock step.

 

[UncleDave]

Two more quick comments that are relevant here:

The government has actively tracked gold transactions since at least back in the 1980s. Broadly speaking, only the very smallest purchases and transfers are exempt, such you buying one gold coin from a collector.

Since someone brought up safe deposit boxes, be aware that your box is sealed when you die and can only be opened by court order as part of handling your estate. You don't want important documents your executor or heirs might need in there. When it is opened, an accounting will be done and the feds could seize large amounts of cash and gold, considering it as possible unreported income from illicit activity. Look online for horror stories about this. Frankly, anything in a safe deposit box isn't in your possession anyway. What if the bank folds?

Broadly speaking the government tracks all purchases made commercially.

A safe deposit box is only one possible location to store any valuables. As you point out - It's loaded with downsides.

 

[Wolf359]

03-4 if i recall.

If a hacker brings down the trading firm thats holding your stocks, or if the building is simply blown up and no one answers the phones how quickly can can you convert stock to currency ? With gold the asset stays with you, but it can only appreciate, cant pay dividends, or split.

Punching that in an S&P 500 calculator, you would be just slightly ahead in an S&P 500 index fund.

If you're investing in a large trading firm like Vanguard, Charles Schwab, Fidelity, TD Ameritrade, etc you should be fine. I basically go online and can move thousands with just a few keystrokes. Gold gets heavy to carry around if you have a large amount. When was the last time that you heard of a large bank getting hacked? It can happen but it's not common and people haven't lost their life savings when it was stored electronically at the bank. People who store gold do get robbed though. I do know one person who kept a lot of jewelry at home and she got robbed one night. Must have been someone who knew she had jewelry at home.

As for how quickly, usually takes about a business day. If I do it during the trading day, usually funds transfer between my Fidelity account and the bank the same day, otherwise it takes an extra day. No big rush though, used to take about a week when they sent sent checks in the mail.