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   Strategies & Market TrendsPrecious Metals mutual funds (gold, silver, PGMs)

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To: Wade who wrote (963)6/18/2006 4:20:36 PM
From: Larry S.
   of 972

Now that I've figured out how to post the chart, I've thought more about it and it is not clear to me that the chart helps. The statistics that we referred to originally, provided probabilities like: above some level, there was a 90 percent probability of the GMI being X percent lower in N months. Now that I see the chart for the 20 years for 1960, it is not clear to me that any of it is meaningful; so I'm going to forgt it.

I do have some info that may be of interest but I want to be sure first that I can post the right charts. test:


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To: Larry S. who wrote (964)6/18/2006 5:10:44 PM
From: Larry S.
   of 972

Last week, Barron's Wall Street Week Column contained the chart I just posted as part of the basis for suggesting that the market was probably going to be relatively flat for the rest of the decade. The chart reminded me of a chart I had seen that showed how the purchasing power of the dollar had fallen over the years and the combination of the charts seemed to me to suggest that the claim that LONG TERM, the RETURN on INVESTEMENTS in the STOCK MARKET will provide substantial real returns is a myth.

Long Term Investment Myth

I sent the following comments to MICHAEL SANTOLI, Author of the column, along with the enclosed chart of the purchasing power of the dollar.

My comments:

"Thank you for awakening me to real value of investing in the markets long term. The chart showing how the DOW moves in Starts and Fits reminded me of the attached chart of how the dollar has fallen in value over the past years. If you combine the information in the two charts you see that a dollar invested in 1905 would have returned only about a 10 percent increase in purchasing power by 2000 and would have essentially lost that in the 5 years since. It is also interesting that except for 1921 period to 1930, the purchasing power of a dollar invested would have dropped and only during those periods when you show a rise in the number does the purchasing power come close to holding steady. With our increasing debt today and the need to inflate our way out of the mess we have been creating since Volcker left the FED, it is clear that dollars invested in the markets today will have substantially less value when (and if) we start to experience real growth again. It is a sad commentary on the deficits don't count crowd."

Response from Santoli:

"Hello Sir-
Thanks for your note and the chart, which I certainly had seen before. Iagree that this complicates any analysis of the returns on financialassets, to say the least. The economy has, without doubt, been arrangedfor the benefit of consumers over savers/investors. Living standards have, by most measures, increased in mirror image to that curve showing
the dollar's depreciation.

Please write any time.

I think the two charts speak strongly of a more important problem. He clearly spent very little time with my comments and didn't notice the error in my calculation. The actual increase in dollars according to his DOW chart is 10.7 but the purchasing power, according to the dollar chart, would have dropped by a factor of 12.3 (1/0.81) from 1905 to 2000. This means that a dollar invested in 1905 would have lost purchasing power. I guess I was so surprised by the impact of the debasement of our dollar that I screwed up my calculation of the value. In any event, the charts together speak loud and clear that there is more to investment than the return measured by the increase in the number of dollars. While, as indicated by the dollar chart, there were short period during which the purchasing power of the dollar increased, it has been down hill since the early 30s and it appears that its decline will accelerate over the next few years. The charts should also awaken us to the danger that our increasing debt and the need to inflate it away holds for Children's and Grandchildren's future. I have included a couple of charts of our increasing debt as a reminder of its magnitude.

I think the last sentence in Santoli's response points up another problem we all face - most of the economic analysis we see these days is trash. Santoli is obviously relative young and uses data without really understanding what it means. He is probably right that most measures of our standard of living show the improvement but, if so, I would suggest that the measures chosen have been selected, like most statistics from our Government these days to create the illusion of greater prosperity.


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To: Larry S. who wrote (965)6/18/2006 7:05:22 PM
From: Wade
   of 972
Hi Larry,

The actual stock market performance is much worse than the indexes indicated that was due to trimming the poor performers from the indexes. ha

Thanks for sharing your thoughts. I agree with you that the general stock market is really going to see stagnation, if not melting down, for a long time. Good luck.


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To: Wade who wrote (966)8/4/2006 10:54:07 AM
From: Larry S.
   of 972

Have you noticed the lease rates? The ONE Year rate is up to 0.11 percent today but it was down to 0.06 percent a couple days ago. There seems to be some inverse correlation with the price of gold but moves aren't as clearly correlated as while the POG gold was dropping a couple of years ago. I think it means that CBs are doing all they can to motivate the leasing of gold to be sold to hold the price down but I'm not sure. There was a time that CBs said they leased gold to make up for the cost of storing it but, at these rates, they aren't leasing for money.

Manipulation seems to be the name of the game these days. Crudele, of the NY Post (see Russ Winter's Credit and Bond Bubble Thread and posts by Les H.) has recently written about the Plunge Protection Team, and he is going after the minutes of their meetings. Some free market.


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To: Larry S. who wrote (967)8/4/2006 11:04:13 AM
From: Wade
   of 972
Yup..they are defending the $658 Fib resistance. As long as USD keeps on sliding Gold will have plenty support.

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To: Larry S. who wrote (967)8/4/2006 11:19:00 AM
From: Wade
   of 972
We can easily spot the pattern of gold selling during NY trading period. The price jumped back right after the PPT finished their daily selling quota. I bet these guys are fed up by this job already. They just dump their gold quota as told by their boss and go home. LOL

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To: Wade who wrote (969)11/18/2006 4:39:46 PM
From: NYBob1
   of 972
FMNJ - undervalued as Silver may be -
considering the price moves so far in -
the base metals, the actual ST price -
discrepancy vastly understates the true -
nature of the LT Silver under valuation -

Where Silver clearly stands out from these -
other metals is in the fact that Silver -
has always been considered an investment metal -
spanning thousands of years -

In this regard, Silver is closely
aligned LT with the PMs - Gold -

The regular investor of the world has not -
and will not, in my opinion, hold physical -
the Copper, Nickel, Zinc, Tin or Lead -
the base metals -

That regular investor has and will continue
to hold physical PMs - Silver & Gold -

This simple fact means that Silver -
should have already greatly exceeded -
the price run-ups in the other metals -
due to the investment kicker -
but held down by the manipulation -
ST counterfeiters of fiats -
cabals bogus papers -

That it hasn’t yet certainly should not -
be LT interpreted that it won’t -

In fact, it is this obvious investment kicker -
that promises to blow the lid off -
the undervalued LT Silver market -

In summary, the investment punch to the Silver price
has barely been felt and before it’s over -
the percentage gain in LT Silver will dwarf
any other metal -
history often repeat itself -

FMNJ real LT Ore-value Res. have still increased -
much more than the 4 to 6-folds in the -
real only currency based on 1000s of years -

the real money currency of Silver -
ex. gratia - the Cerro Rico - Potosi - Inca -
the Worlds Largest and Richest Silver Mine -

FMNJ - FY2pennies fiats -

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To: NYBob1 who wrote (970)11/18/2006 11:29:13 PM
From: Wade
   of 972
I got this from GATA:


David Copperfield must be working for the Dept. of Labor. LOL

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To: Larry S. who wrote (967)4/17/2007 12:36:38 AM
From: greatplains_guy
   of 972
Sorry to reply to your PM by public, but without paying for it, I do not have PM rights. NUURF.PK - Yes.

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