Gold
 

Time to attune attention to this market.

Fevered reports of a NY close over $500 (highest since 1980's) coming soon, to a TV near you.

Re: Gold
 

Which gold stocks do you guys own? I have 1000 shares of AUY (Yamana Gold, Inc.)--any comments? I jumped in @ $5.02/share; closed today @ $5.48.

Re: Gold
 

GLD

Re: Gold
 

Please read
Storage and stability
&
World commodities and world currencies

both by Benjamin Graham, you will never again look at gold the same way.

Re: Gold
 

[ QUOTE ]
"It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

[/ QUOTE ]

Warren Buffett, 1998

Re: Gold
 

Do your self a favor and just hold on to it. Dont trade it, it's a good holding. Consider adding/broadening out via the gold ETF (GLD) or a gold mutual like Fidelity Select GOld (FSAGX) or Toqueville Gold.

This action has all the earmarks of a huge multi-month move from the recent $500 milestone close.

Re: Gold
 

Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

Re: Gold
 

[ QUOTE ]
Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

[/ QUOTE ]
Silver is a key input to film. When silver prices went up it really hit companies like Kodak hard. Silver has utility which creates tangible value. Other than jewelry I don't think much is made with gold, though I may be wrong.

If that's what your link said, I'm sorry for being repetative.

Re: Gold
 

[ QUOTE ]
all the earmarks of a huge multi-month move from the recent $500 milestone

[/ QUOTE ]
I'm not saying you're wrong, but it's interesting that you're saying this when it's at a 24.5-year high.

At what spot price would you recommend him to sell his holding?

Re: Gold
 

gold up another 5 this morning

Re: Gold
 

[ QUOTE ]
Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

[/ QUOTE ]

Your link explains why he invested in silver (it has tangible value and uses, and he thinks he knows what it's reasonable equilibrium value is). It also explains the differences with gold, which is why he'll never change his opinion on gold.

What if Bush decides to help reduce our national debt by selling all the (now unnecessary) gold from our central bank? What happens to gold prices then?

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

[/ QUOTE ]
Silver is a key input to film. When silver prices went up it really hit companies like Kodak hard. Silver has utility which creates tangible value. Other than jewelry I don't think much is made with gold, though I may be wrong.

If that's what your link said, I'm sorry for being repetative.

[/ QUOTE ]

Gold is actually used in a lot of electronics, fwiw.

-bb.

Re: Gold
 

http://news.yahoo.com/s/nm/20051209/...ts_precious_dc

Had to post this...

[ QUOTE ]
Gold fever rages as price tops $530

[/ QUOTE ]

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

[/ QUOTE ]
Silver is a key input to film. When silver prices went up it really hit companies like Kodak hard. Silver has utility which creates tangible value. Other than jewelry I don't think much is made with gold, though I may be wrong.

If that's what your link said, I'm sorry for being repetative.

[/ QUOTE ]

Gold is actually used in a lot of electronics, fwiw.

-bb.

[/ QUOTE ]
How much is actually used? Are you talking about things like the end of headphones where it's (I would assume) extremely small amounts? I would guess, and this is definitely a guess, that silver prices are driven much more by tangible forces than gold prices.

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Look at your dates for this statement. He later became a HUGE silver investor. Market realities change; ditto for informed opinions and sentiment. The best are quick to change beliefs quickly in the face of new realities.

Buffett is one such.

UNDERSTANDING BUFFETT'S SILVER PLAY
http://www.gold-eagle.com/gold_diges...use020998.html

[/ QUOTE ]
Silver is a key input to film. When silver prices went up it really hit companies like Kodak hard. Silver has utility which creates tangible value. Other than jewelry I don't think much is made with gold, though I may be wrong.

If that's what your link said, I'm sorry for being repetative.

[/ QUOTE ]

Gold is actually used in a lot of electronics, fwiw.

-bb.

[/ QUOTE ]
How much is actually used? Are you talking about things like the end of headphones where it's (I would assume) extremely small amounts? I would guess, and this is definitely a guess, that silver prices are driven much more by tangible forces than gold prices.

[/ QUOTE ]

I have no idea one way or another whether silver or gold is driven more by investment. However gold is definitely used extensively in electronics as it is an excellent conductor and is very resistant to corosion; the more high-end the device, the more that is used (see: the space shuttle). I was just bored enough this morning while running a couple of free (partypoints) tournaments this morning to do a (very) little bit of research on the web about this, and I found one site that may or may not be accurate, but which seemed the best resource vs. the others I found in this basic check...

For more on the industrial uses of gold:

http://www.gold.org/discover/knowled...ses/index.html

A breakdown for consumption:

http://www.gold.org/value/stats/stat...and/index.html

Which, if it is accurate (and my calculations are correct), shows industrial use at around 12%, use for jewelry at about 78%, and investment use at about 10%.

If you do the same kind of research for silver, we can find out the answer to the "which is driven more by investment" question.

If not, I'll live. [img]/images/graemlins/smile.gif[/img] These freebie tournaments are just really boring...I started them to do in the background while I was working on something else, but then I finished the other stuff I was working on and was left staring at 2 tourneys that even if I win I don't care... [img]/images/graemlins/tongue.gif[/img]

-bb.

Re: Gold
 

I will check up on price drivers for silver if I get a chance tomorrow.

On a realted note, here is a link to a presentation given by a friend of mine last year for a club at school. It's a pitch for Newmont Mining Corporation (NEM) but it's got a very good insight into world trade factors that preceded the rise in gold prices. The guy in the presentation is one of the smartest people I know in finance so I think it's a pretty interesting/worthwhile video to watch.

NOTE: You need RealPlayer and you can skip the video to the 52:20 mark in order to avoid the dead air/administrative issues earlier in the meeting.

Edit to point out that I know the girl is an idiot, just bare with her because the guy really is very bright and worth listening to.

One more edit, for context, to say that this presentation was given on January 28, 2005.

Re: Gold
 

This gold rally is predicated on staying above the 500-510 price area on a closing basis. It looks like it will deliver on that pretty easily. It hit $540 in Asia on Monday.

When price gets higher than a historical significant top, all the miserable people (holding at a loss) are gone, having sold "too get even", and most all new and remaining holders are anticipating higher prices.

Many traders buy after price closed above 500-510 for this very reason.

A close below 500-510 would likely be bad news for gold short-term.

Re: Gold
 

follow trends, avoid prediction.

Re: Gold
 

Newmont Mining is a good example. A close over 51 would be special.

Re: Gold
 

[ QUOTE ]
follow trends, avoid prediction.

[/ QUOTE ]
Alternately...listen, don't think?

Re: Gold
 

If thinking includes judgement, yes.

Listen, avoid judgements.
Follow trend, avoid predictions.

Note that prediction requires judgements.

The typical limiting judgement is that price is "too high" when it may in fact just be getting started.

A good example is Newmont Mining. It's price for many observers is "too high" yet a strong high volume close over 50+ provides a low risk entry because:

0. The stock is already trending higher.

1. A close above 50 is great because most losing players who paid 48 or more (previously, in 01/04 and 11/04) have sold, leaving only players who likely hold for much higher prices. This reduces selling pressure and tends to increase price. All the miserable people are gone.

2. A close sufficiently below 50 (3% or more) invalidates these premises and indicates an immediate sale. The downside risk is the right size (2-6% max) to participate and find out if this trend really has legs.

3. After moving higher a retest of 50 is a normal occurence (not a threat per se) and is to be expected.

Re: Gold
 

Warren,

"World" by Graham is $164 on Amazon.
Any way you know to access this book for far less than that?

"Storage" is $95 on Amazon. Any better places to get this book?

I'm Googling around looking for these in the meantime.

I'd be happy to temporarily swap some books with you to gain some access to these titles; please PM me if you have an interest in this.

Re: Gold
 

The discussed event (NEM over 50 on a closing basis) may likely occur today, on Monday, Dec 19 2005.

Re: Gold
 

Why can't I use judgement? You seem to claim that its because most people's judgement is wrong. However, your method of following trends essentially just follows the net judgement of the whole market.


[ QUOTE ]
0. The stock is already trending higher.

[/ QUOTE ]
Fwiw, this is also the case every time a stock decreases from a price it will never reach again. I'm not saying that's the case here, but "it went up so its going to go up more" doesn't make any sense.

[ QUOTE ]
1. A close above 50 is great because most losing players who paid 48 or more (previously, in 01/04 and 11/04) have sold, leaving only players who likely hold for much higher prices. This reduces selling pressure and tends to increase price. All the miserable people are gone.

[/ QUOTE ]
You picked 48 as an arbitrary number. If you replace it with 52 it "proves" (used in the loosest of terms) the opposite case and makes just as much (or little) sense.

[ QUOTE ]
2. A close sufficiently below 50 (3% or more) invalidates these premises and indicates an immediate sale. The downside risk is the right size (2-6% max) to participate and find out if this trend really has legs.

[/ QUOTE ]
Not much to say here. looks like you picked a few more numbers for no particular reason (or maybe because you read them somewhere else).

[ QUOTE ]
3. After moving higher a retest of 50 is a normal occurence (not a threat per se) and is to be expected.

[/ QUOTE ]
What does this mean? If it goes above 50 by whatever amount you deem to be sufficient then it won't go below 50? We are still talking about Newmont Mining, right? What if the dollar appreciates...a lot?




I don't really or agree with anything you wrote in this post. I'm curoius to know if you do.

Re: Gold
 

[ QUOTE ]
The discussed event (NEM over 50 on a closing basis) may likely occur today, on Monday, Dec 19 2005.

[/ QUOTE ]
Ha, what makes you say this? Is it yesterday's close of $49.66 or today's pre-market trade of $50.75? Way to go, Nostradamus.

Re: Gold
 

[ QUOTE ]
"it went up so its going to go up more" doesn't make any sense.


[/ QUOTE ]

Physics 101... A body in motion tends to stay in motion...

The trend is your friend... learn to embrace it, not fight it!

Re: Gold
 

You passionately disagree and I respect that. For more information, please Google "trend following" and check out the theory behind "breakout". You will likely disagree with most of it. And that's OK.

Sincerely,
Dan

Re: Gold
 

I dont want Sniper at my table.

Re: Gold
 

[ QUOTE ]
what makes you say this? Is it yesterday's close of $49.66 or today's pre-market trade of $50.75?

[/ QUOTE ]

Both items point to a possible above-50 close today. It's an observation of a specific probability, not a prediction.

Some may judge the price of NEM "too high", above 50. I view a probable close above 50 as a low-risk opportunity.

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
what makes you say this? Is it yesterday's close of $49.66 or today's pre-market trade of $50.75?

[/ QUOTE ]

Both items point to a possible above-50 close today. It's an observation of a specific probability, not a prediction.

Some may judge the price of NEM "too high", above 50. I view a probable close above 50 as a low-risk opportunity.

[/ QUOTE ]
Just so we're clear, are you saying you'd prefer to buy this stock for $50 as opposed to $49?

Re: Gold
 

[ QUOTE ]
Just so we're clear, are you saying you'd prefer to buy this stock for $50 as opposed to $49?

[/ QUOTE ]

Considering that it hit a high of 52 (actually 51.98) today, this question seems moot at the moment!

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
Just so we're clear, are you saying you'd prefer to buy this stock for $50 as opposed to $49?

[/ QUOTE ]

Considering that it hit a high of 52 (actually 51.98) today, this question seems moot at the moment!

[/ QUOTE ]
Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

Re: Gold
 

[ QUOTE ]
Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

[/ QUOTE ]

There are times when buying at X provides a better risk/reward opportunity than buying at x-1.. so, yes!

(Note: I spun off the chart branch into its own thread)

Re: Gold
 

[ QUOTE ]
[ QUOTE ]
Would you rather buy stock in any company, ever for $x as opposed to $x-1? That is not only relevant, but pretty critical.

[/ QUOTE ]

There are times when buying at X provides a better risk/reward opportunity than buying at x-1.. so, yes!


[/ QUOTE ]
Okay, I'm pretty sure we will never agree on anything related to finance, stocks or money.

Re: Gold
 

Yes.
49 is much riskier than 50. The basic premise is that all the miserable holders who bought at the previous high ($50) may still be around to exert selling pressure at $49. Once it closes above, they are likely gone. What's left are existing and new holders who bought expecting higher prices.

Now the shares can run.


DETAILS
1. 49 does not represent a breakout above 50, it is merely potential. Below 50, more selling has and can continue to take place coming from old frustrated holders of this stock. All of them might not have cleared out yet. The 100% natural, human thing to do is hold your losers "until you get even". Your opponents are human and they do the easy thing. They hold. And sell at $49 if it ever comes.

The main problem with 49 is the protective stop problem....defining risk. Buying on a close above 50 solves this problem-- simply set your stop slightly below 50, (3% below is a good rule of thumb) This is the level at which you are 90% sure you are wrong. Risk is defined.

2. Buying on close above 50 provides potentially unlimited upside (if you can let it run) and a clearly defined level of risk. Risk is

Purchase Price - ($50 -($50 * .03))- any slippage - commissions

For example if you buy on close today and close is 51.50 risk is

51.50 - 48.50 - slippage - commissions

Risk is basically 3 points plus costs. It's under 6% risk.

At 49, you are setting a subjective stop with reasons supported by your level of fear or greed. These are poor premises for choosing a stop.

At 50, you are setting an objective stop with reasons supported by the chart. These are a excellent premises for setting a stop.

The chart reflects the collective actions (and emotions) of all the players.

After it breaks out it is 100% normal for price to test $50 before it runs.

The 50-51 area is a pivot point for NEM. The difference between 49 and 50 is very large. Alot of emotion is focused on the 50-51 area.

Re: Gold
 

[ QUOTE ]
Your opponents are human

[/ QUOTE ]
Opponents? What the hell are you talking about?

[ QUOTE ]
simply set your stop slightly below 50, (3% below is a good rule of thumb)

[/ QUOTE ]
Please stop making up numbers and telling me they're "good" or even hinting that they're reasonable. They are neither.

[ QUOTE ]
Buying on close above 50 provides potentially unlimited upside

[/ QUOTE ]
Hahahahahahahahahahahahahahahahahahahahahahaha.

[ QUOTE ]
At 49, you are setting a subjective stop with reasons supported by your level of fear or greed. These are poor premises for choosing a stop.

At 50, you are setting an objective stop with reasons supported by the chart. These are a excellent premises for setting a stop.

[/ QUOTE ]
Man, this is great stuff. I wonder how many people will actually believe all this.

[ QUOTE ]
After it breaks out it is 100% normal for price to test $50 before it runs.

[/ QUOTE ]
And you still think it's a good idea to ditch your shares at $48.whatever?

[ QUOTE ]
The 50-51 area is a pivot point for NEM. The difference between 49 and 50 is very large. Alot of emotion is focused on the 50-51 area.

[/ QUOTE ]
I wish you'd stop making things up. NEM has a historical correlation to the price of gold of about 90%. Gold prices will move this stock, not whatever the fck you're talking about. Here's a short economics lesson for those of you that think any of what Dan is saying is true:

1) The price of NEM moves when the price of gold moves. Here is a graph of NEM compared to the CBOE Gold Index:
http://img423.imageshack.us/img423/7...ckgraph3cl.jpg

2) Gold is priced in USD/Troy Ounce.

3) It is reasonable to assume that the intrinsic value of gold remains constant.

4) Gold is traded worldwide.

For those of you that can't piece all of this together, I'll help. When the US Dollar depreciates against foreign currencies, the price of gold (which is USD denominated) increases. Here's an example:

Let's say ther are 2 currencies in the world, Dollars and Euros. At time 0, 2 USD = 1 Euro and gold is 400 USD/ounce (or 200 Euros/ounce). At time 1, 3 USD = 1 Euro. This means that the price of gold is now 600 USD/ounce (still 200 Euros/ounce).

Note that this example is very much simplified, but it gets the point across. NEM moves with the price of god and the US Dollar, not whatever Dan is talking about. End of story.

Re: Gold
 

It is often 100% correct to WAIT and buy at X as opposed to X-1.

The reasons are related to the focused emotion of most players at pivotal price points.

Emotion of players are not distributed evenly across all prices. Thus pivotal points are created, setting up low-risk opportunities.

The chart of NEM illustrates how the $50 area was hit twice in 01/04 and 10/04. $50 is now a pivotal point where emotion is focused. Historical buyers in these areas are grateful to "get out even", now, selling at $49 and higher.

Most of these historical buyers are likely gone, now.

The strong evidence is any close over $50.

Re: Gold
 

[ QUOTE ]
It is often 100% correct to WAIT and buy at X as opposed to X-1.

The reasons are related to the focused emotion of most players at pivotal price points.

Emotion of players are not distributed evenly across all prices. Thus pivotal points are created, setting up low-risk opportunities.

The chart of NEM illustrates how the $50 area was hit twice in 01/04 and 10/04. $50 is now a pivotal point where emotion is focused. Historical buyers in these areas are grateful to "get out even", now, selling at $49 and higher.

Most of these historical buyers are likely gone, now.

The strong evidence is any close over $50.

[/ QUOTE ]
Homie, NEM moves with the price of gold. Gold moves inversely to the value of the USD. None of this has ANYTHING to do with pivotal points or emotional players or ANYTHING you're talking about.

Re: Gold
 

Yes.

90% of what is said about NEM applies to gold.

Gold is a better buy at $501 then $480.
Just like NEM is better at $51 than $48.
For about 90% the same reasons.

I respect all contrary opinions regarding same.

Sniper, thanks for the supporting cover.

Re: Gold
 

[ QUOTE ]

Gold is a better buy at $501 then $480.


[/ QUOTE ]
Awesome! I love that your "analyis" doesn't include anything pertaining to the USD. Let me guess, is the USD a better buy at .5 Euros than .33 Euros?