How low will it go?

ATN_Pilot said:
That's because it's all a speculation play. Gold and silver have no real fundamentals. All you're doing is gambling on price movement.
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The fundamental with gold is that it is very unlikely to go to zero. Any stock, especially any airline stock, is fairly likely to go to zero given enough time. Otherwise, gold is a crappy investment. Doesn't pay dividends, gains are taxed at the highest rate of anything in the US. The reason to buy it is to avoid huge losses to inflation over time.

$100 of gold in 1974 is worth about $1200 now
$100 of S&P 500 in 1974 is worth about $1700** now
$100 of US Dollars in 1974 is worth $100 now.
$100 of TWA stock in 1974 is worth $0 now.
$100 of GM stock in 1974 is worth $0 now.
$100 of Chrysler stock in 1974 is worth $0 now.

**much higher, about $6,000 now if dividends were reinvested, minus taxes.
 
drunkenbeagle said:
The fundamental with gold is that it is very unlikely to go to zero.
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Well, that's not really a fundamental. A fundamental would be an examination of what it produces. And the answer to that is nothing. Gold only has value as long as we ascribe value to it. If gold were to become "so yesterday" in jewelry ten years from now because something else is more stylish, then gold is worthless. It has a few industrial applications, but there's enough gold for those uses to last millennia. The truth of the matter is that gold has no intrinsic value.

Any stock, especially any airline stock, is fairly likely to go to zero given enough time.
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Not really (except for airline stocks). You've cherry picked a few stocks there to make your point, but that's not a realistic assessment of equity investing. You did list the S&P, and that's really the only thing that matters. Because any diversified portfolio over a long period of time is going to mimic the S&P. And as you can see, the S&P beats gold significantly. Always has, always will. Why? Because the S&P represents the value of companies that actually produce things. They have intrinsic value. Gold does not. And the likelihood of a diversified basket of equities going to zero over any period of time is virtually zero.
 
Cessnaflyer said:
What are your examples?
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One big example is that in the piloting profession, it's implied that (with the exception of a mechanical failure) a poor outcome is generally the result of some sort of personal error. If we do something in the airplane or the sim that has a negative outcome, we generally feel that we did something wrong.

In trading and investing, it's important to let go of the need to be correct 100% of the time. In fact, it's perfectly possible to make money consistently being wrong over half the time. All we do as investors and traders is accumulate an edge that should make us money in the long term. Therefore, it's entirely possible to put on a trade that conforms 100% to our method, even looks the same as previous successful trades, but stops us out. As long as you're following a vetted, back-tested (done by you!) methodology, getting stopped out is not a personal failure. You simply go on to the next trade.
 
ATN_Pilot said:
Not really (except for airline stocks). You've cherry picked a few stocks there to make your point, but that's not a realistic assessment of equity investing. You did list the S&P, and that's really the only thing that matters. Because any diversified portfolio over a long period of time is going to mimic the S&P. And as you can see, the S&P beats gold significantly. Always has, always will. Why? Because the S&P represents the value of companies that actually produce things. They have intrinsic value. Gold does not. And the likelihood of a diversified basket of equities going to zero over any period of time is virtually zero.
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Hey, totally agree. The point was, while you can do a lot worse than gold, it is still better than cash under the mattress. For every person thinking gold is the best way to save, there are probably ten more holding their savings in cash. Which we can all agree is even worse.

And for the "preppers" up there in Georgia with @ATN_Pilot, it is probably better than the palettes of government surplus cheese they are buying...
 
drunkenbeagle said:
The reason to buy it is to avoid huge losses to inflation over time.

$100 of gold in 1974 is worth about $1200 now
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The theoretical protection from inflation that gold provides is worthless if you have taken huge losses due to speculation

You forgot to mention that $1800 in Gold in 2012 is worth $1200 now. That's a 30% loss in 24 months.


Right now Gold is a bubble that is about to burst.
 
USMCmech said:
The theoretical protection from inflation that gold provides is worthless if you have taken huge losses due to speculation

You forgot to mention that $1800 in Gold in 2012 is worth $1200 now. That's a 30% loss in 24 months.


Right now Gold is a bubble that is about to burst.
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It is unlikely that gold will lose all value over time. It is highly likely that US Dollars will.

In the last 45 years (since the dollar stopped being backed by gold), the dollar has lost about 95% of its value. Or said another way, a dollar from 45 years ago is worth less than a nickel now. That is a lot more than a 30% loss. The dollar will probably lose another 95% in the next 45 years.

That's not the first time that there has been a run on dollars (Nixon in 1971). When FDR wanted to print money in 1934, the dollar was devalued by 60% overnight. A loss of confidence in US Debt can, and probably will, happen again. Easy to say that it only happens to places like Greece, Argentina, Russia, Germany, Britain...., but will never happen to the US. History says otherwise.
 
Putting money in any currency or commodity is nothing but a gamble. Whether it's dollars, dong, rubles, oil, or gold, none of them produce anything, and therefore have no intrinsic value. Stay away from all of it. Invest in good companies and you can't go wrong.
 
dasleben said:
I'll just add to some of the above and say that some of the skills and attitudes we learn as pilots does not translate well into success in the markets.
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Same with engineers and doctors, especially engineers.

My experience shows engineers, generally speaking are terrible traders.

Not all of them, like anything, but generally yes.
 
I've invested heavily in Airlines. Doing very well in 2014. DAL and SAVE has been great. Outside of Airlines, Blackstone and Tesla has also been great. Tesla was just a lucky wild bet jumping on the bandwagon a year ago that has been wonderful.
 
If you guys are killing it so well in equities, have you considered learning how to use leverage?
 
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