The Gold Debate: Here's Why You Should Be Wary [View article]
Jeff - - -
Excellent article. A small percentage in gold is wise for any portfolio with a time horizon beyond 3-5 years. However, occasional trading in larger gold positions can be much more productive than buy and hold. As you point out in the article, physical gold is not an ideal trading vehicle because of big commissions, large bid/ask spreads and poor liquidity. Most traders use ETFs and gold mining stocks for positions to be held for short periods of time.
We may be entering a great time for trading gold in 2010. I recently speculated that gold might see prices as low as $900 and above $1300 in 2010. My prognostication was that gold would be under pressure in the first half of 2010 and rally strongly in the second half of the year.
Disclaimer: The value of my prediction may be worth every penny I charged for it - it was free.
"Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."
"Generally it means being less productive," she said.
"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."
I'll make my comment based on the assumption that Dr. Polczalek's current AGI is $450,000 and she is considering cutting that to $250,000.
Dr. Poczalek will be thanked by other dentists in her community who will be happy to pick up her patients and an extra $200,000 per year, somewhere between $100,000 and $120,000 a year after taxes, depending on where taxes end up after 2010.
If Dr. Polczalek is happy with an after tax income of about $150,000 to $170,000 from an AGI of $250,000 rather than an after tax income of $250,000 to $290,000 from an AGI of $450,000, then she should work less.
I have just estimated federal income taxes and FICA. Of course she will have state income taxes.
Dr. Polczalek would benefit from "running the numbers": But maybe she is just rationalizing wanting to make her own life a little easier in the future.
Trading Strategy: Gold vs. Gold Stocks [View article]
Thanks for doing this work. I have been intrigued by the Au/Au stock ratio but have not taken the time to examine it closely. Hope you continue to work on it.
My Best/Worst Calls of 2008: A Credit Crisis Retrospective [View article]
Edward - - -
It amazes me that you do not have one of the largest watch lists on SA. For me, you are one of the best analysts of economic environments I have read. What I like most about your work is the real time reaction to the unexpected in a timely manner as events unfold. In 2008, this ability was put to an extreme test and you passed with flying colors. I hope 2009 is not as challenging, but I fear it may be. I'll be watching for your articles.
You said: "Gold is up some 2400% since its release from the Gold Standard in 1971, $35 to $875. Meanwhile, the DOW is up less than1000%, 800 to 8400. Which would you like to have owned during "that" entire time frame?"
That is a good comment, but you also said: "It's all a matter of perspective and the timeframe one wants to use." This comment is just as important, because each investor has to decide how to allocate his investment dollars based on his specific time horizon.
Someone who invested in 1971 never lost money in gold. That was a unique timing point for gold. People who invested at the wrong times with respect to when they needed to cash out (their time horizon) lost money. This is true for gold or stocks.
Investing is something like poker: You need to know when to hold 'em and know when to fold 'em.
Disclosure: I have a small position in gold, but I consider it a hedge rather than an investment. I prefer to take larger positions (than in gold) in industrial metals and oil, at the proper times in the business cycle. The time has not been right for me for 8 months. Yes, I missed a lot at the top in oil, but I'll settle for what I made before that.
The Gold Debate: Here's Why You Should Be Wary [View article]
Excellent article. A small percentage in gold is wise for any portfolio with a time horizon beyond 3-5 years. However, occasional trading in larger gold positions can be much more productive than buy and hold. As you point out in the article, physical gold is not an ideal trading vehicle because of big commissions, large bid/ask spreads and poor liquidity. Most traders use ETFs and gold mining stocks for positions to be held for short periods of time.
We may be entering a great time for trading gold in 2010. I recently speculated that gold might see prices as low as $900 and above $1300 in 2010. My prognostication was that gold would be under pressure in the first half of 2010 and rally strongly in the second half of the year.
Disclaimer: The value of my prediction may be worth every penny I charged for it - it was free.
Tuesday Outlook: Commodities, Emerging Markets [View article]
You wrote:
"Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.
"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."
"Generally it means being less productive," she said.
"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."
I'll make my comment based on the assumption that Dr. Polczalek's current AGI is $450,000 and she is considering cutting that to $250,000.
Dr. Poczalek will be thanked by other dentists in her community who will be happy to pick up her patients and an extra $200,000 per year, somewhere between $100,000 and $120,000 a year after taxes, depending on where taxes end up after 2010.
If Dr. Polczalek is happy with an after tax income of about $150,000 to $170,000 from an AGI of $250,000 rather than an after tax income of $250,000 to $290,000 from an AGI of $450,000, then she should work less.
I have just estimated federal income taxes and FICA. Of course she will have state income taxes.
Dr. Polczalek would benefit from "running the numbers": But maybe she is just rationalizing wanting to make her own life a little easier in the future.
Trading Strategy: Gold vs. Gold Stocks [View article]
My Best/Worst Calls of 2008: A Credit Crisis Retrospective [View article]
It amazes me that you do not have one of the largest watch lists on SA. For me, you are one of the best analysts of economic environments I have read. What I like most about your work is the real time reaction to the unexpected in a timely manner as events unfold. In 2008, this ability was put to an extreme test and you passed with flying colors. I hope 2009 is not as challenging, but I fear it may be. I'll be watching for your articles.
Thanks for all your great work.
Chart of the Week: Gold [View article]
You said: "Gold is up some 2400% since its release from the Gold Standard in 1971, $35 to $875. Meanwhile, the DOW is up less than1000%, 800 to 8400. Which would you like to have owned during "that" entire time frame?"
That is a good comment, but you also said: "It's all a matter of perspective and the timeframe one wants to use." This comment is just as important, because each investor has to decide how to allocate his investment dollars based on his specific time horizon.
Someone who invested in 1971 never lost money in gold. That was a unique timing point for gold. People who invested at the wrong times with respect to when they needed to cash out (their time horizon) lost money. This is true for gold or stocks.
Investing is something like poker: You need to know when to hold 'em and know when to fold 'em.
Disclosure: I have a small position in gold, but I consider it a hedge rather than an investment. I prefer to take larger positions (than in gold) in industrial metals and oil, at the proper times in the business cycle. The time has not been right for me for 8 months. Yes, I missed a lot at the top in oil, but I'll settle for what I made before that.