Investments This page offers financial know-how and investment education for the sophisticated investor.

New 2012 - 02 - 14:

[04:30 pm] Video - Mark Cuban: The Beauty Of Cash

There are some points in this video on which we agree with Cuban, while on some others we don't. But take a look at the video first.

We don't know whether he's right regarding what he says about the stock market, being a place where hackers are trying to create ways to generate cash, however, we agree with him that it makes sense to have money in other places. He doesn't specify the term 'other places', but we would say that you need to have a big percentage of your portfolio outside of the financial system. Cuban suggests to hold cash, because it creates a transactional opportunity. Well, that might certainly make sense for him, since he is in the wonderful situation not to depend on the return of his investments. For the small guy we'd rather suggest to store his cash in physical precious metals. That's a place outside of the financial system, completely anonymous, without any danger of being hacked, protected against inflation, hyperinflation etc.

Furthermore we like what he says towards the end of the video, when he suggests to use superfluous cash to pay off credit cards or other debts. There's definitely no investment that could create a bigger return than getting rid of all of your consumer debt. Even precious metals can't keep up with that.

New 2012 - 01 - 22:

[08:00 am] About investing in junior-gold-miners: Rick Mills: Derisking Gold Juniors, Step by Step

The Gold Report: We have seen some incredible volatility in the market over the last three or four months, with many junior resource stocks on the Toronto Venture Exchange beaten down, even if they have proven resources and substantial cash treasuries. We have also seen some volatility in the price of gold and a disconnect between the price of gold and the price of juniors. In this environment, how should investors approach risk in the junior resource space?

Rick Mills: I agree with Baron Nathan Rothschild who became a legend during the financial crisis right after the Franco-Prussian War. As the story goes, a panic-stricken investor came screaming into his office yelling, “You advise me to buy securities now? Now? The streets of Paris run with blood!” Rothschild replied, “My dear friend, if the streets of Paris were not running with blood, do you think you would be able to buy at the present prices? Buy when there’s blood in the streets, even if the blood is your own.”

It's especially the juniors that were sold off during the recent gold price supression (just like in 2008). So right now should be a good time to pick up some shares of promising companies. However, we tend not to invest in the juniors market. We prefer companies that are already producing real metal, cash flows, etc.

Blackrock is buying a mining company: http://truthingold.blogspot.com/2012/01/interesting-observation-on-mining.html

I just noticed to day that two days ago Blackrock filed a 13G with the SEC, reporting a 10.4% ownership position in Agnico Eagle (AEM) stock. We won't know for sure if this is part of a larger wave of big institutional money flowing into the extraordinarily cheap mining stock sector, but just like hedge funds are "monkey see, monkey do," big institutions tend to run in herds...

It looks like the big money keeps accumulating more and more shares of gold mines. This should soon lead to an explosion of the mining companies stock prices.

New 2012 - 01 - 06:

[04:00 am] It's going back up again: Gold Stocks Complete First Major Bottom Since 2008

New 2012 - 01 - 05:

[02:00 pm] Another money saving tip: Comparison of Prices for My Purchases at the Dollar Store

New 2012 - 01 - 03:

[02:30 pm] Outlook: Investors Hate Uncertainty; 7 Themes For You To Expect In 2012

New 2011 - 12 - 26:

[07:30 am] John Mauldin: Your Three Investing Opponents

New 2011 - 12 - 23:

[05:00 am] Only an investment for patient investors: What’s Up with Gold Mining Stocks?

New 2011 - 12 - 22:

[03:00 pm] Always keep your eyes glued to those financial terrorists, also known as "bankers": Financial Fraud Against Older Americans Peaks this Holiday Season

With the baby boomer generation reaching retirement age and comprising 25% of the U.S. population, financial investment fraud is becoming a bigger and more problematic issue facing the country.

The only reasonable way to deal with this problem is to manage your finances all by yourself. All it takes is to build a stable basis of financial knowledge. Authors and investors like Robert Kyosaki will help you to increase your financial intelligence.

Americans over the age of 65 lost nearly $3 billion to financial abuse from April to June 2010, up 12% from the same period in 2008, according to the report.

Now you know how the banks can afford to do business in those flashy glass towers all over Manhattan. As long as the majority of people still invests their money with the big banks (in good faith), in all kinds of paper assets they don't really understand (neither do the bankers), instead of buying precious metals, things are not going to change. Main Street will be ripped off till there's nothing left. And the precious metals will not rise significantly as long as the people allow the banks to play their dirty games.

New 2011 - 12 - 13:

[12:15 pm] Interview: Year-end buying opportunities abound in mining stocks

New 2011 - 12 - 10:

[12:15 pm] It definitely makes sense to invest one or two dollars, provided you already have enough physical PM: Gold and Silver Mining Stocks Offer the Best Value of Any Sector in the Stock Market By a Wide Margin

New 2011 - 12 - 09:

[03:15 pm] No need to pay money if you can have it for free: 8 Banks Offering Checking Accounts With No ATM Fees

New 2011 - 12 - 08:

[01:00 pm] Some of them certainly have a lot of upside potential: Why Gold Stocks Have Underperformed and What Lies Ahead

[01:00 pm] Don't trade precious metals, invest in them: Guns And Gold: The Trading Strategy For Our Times

New 2011 - 11 - 30:

[03:45 pm] Still a long way to go from here: Home Prices Fall to 2003 Levels; When Will Housing Hit Bottom?

Most of the time the system and its protagonists want to make you believe that NOW is the right time to buy a home. Don't let them punk you, think like an investor. There's gonna be a time when interest rates will rise again, and when they do so, they'll do it very sharply (even though this will certainly not happen before 2013/14), since this will be the only possibility for central banks to fight the inflation. Interest rates might then be well somewhere in the mid double digits and most people will be unable to pay off their loan, while new loans will be unavailable for a long period of time. The market will literally be flooded with houses. Until then, don't even play with the thought of investing money in a new home.

You'll be able to collect houses at dirt cheap prices, so remain patient.

[09:45 pm] For disciples: 3 reasons Apple shares are so cheap

New 2011 - 11 - 29:

[02:15 pm] Many reasons that speak for gold and silver: A Summary of the Risks

New 2011 - 11 - 20:

[12:45 pm] Investing in precious metals requires having the mindset of a rebel: Gold investment: The contrarian's quandary

Are you willing to be a rebel? Are you ready to be an investment punk?

If you are, you have to swim against the current, and do everything just the way 98% of the people would NOT do it: think different, invest in a different way and live in a different way. We didn't come to get a little bit, we are trying to get it all!

New 2011 - 11 - 14:

[05:00 pm] Mineweb: Rising dividends from gold stocks boost investor interest

New 2011 - 11 - 11:

[02:00 pm] Video: Robert Kiyosaki - The Four Asset Classes

New 2011 - 11 - 10:

[04:45 pm] One of the gold producing companies we invest in: Gold Fields joins ranks of record quarterly earners, project pipeline impresses

Gold Fields quarterly earnings rocketed 62% to a record R2.1 billion (US$ 293 million) for the quarter ended 30 September compared with R1.3 billion (US$186 million) in the June quarter. Cash generated from operations amounted to R5.1 billion (US$717 million) up 71% from the June quarter's R3 billion (US$ 436 million).

These numbers confirm the quality of the company. At current gold prices, the stock is very undervalued. We already had to have a whole lot of patience with the South African companies, but sooner or later this massive undervaluation will have to be reduced, preferably by an increasing stock price.

[01:45 pm] Argentina is becoming an insecure country for mines: Update to Minera Andes Press Release on October 27, 2011

Decree No. 1722 was issued by the Executive Branch of Argentinean government on October 25, 2011, and published in the Official Gazette on October 26, 2011, which re-establishes the obligation for mining companies, including MSC, to repatriate to Argentina all foreign currency revenues obtained from mining exports. Considering that Argentine exporters in general are subject to the obligation of repatriating their export revenues into the country, and alleging fairness and equity reasons, the Executive Branch has re-established the obligation to settle in the Single and Free Foreign Exchange Market, all revenues arising from exports performed by companies engaged in the development of mining projects. The special exceptions for mining industries previously granted in 2003 and 2004 have been eliminated.

This behavior will make many foreign companies leave the country. Indeed very communistic.

New 2011 - 11 - 08:

[02:00 pm] Simple answer: when everybody wants gold, but no pysical metal is available - nowhere: When will Gold Stocks Reach the Bubble Phase?

New 2011 - 11 - 03:

[01:15 pm] Mineweb: The questions resource investors should be asking - Michael Berry

TGR: How does an investor choose a company?

MB: That's a very good question. A few years ago we developed and tested an investing philosophy called Discovery Investing. Its cornerstone is a 10-factor model. We have questions that we research, questions that every investor could ask, in order to grade or rank stocks from best to worst.

For example, the first thing we want to understand is the management. How good is the management track record? How well do they communicate? Do they own the stock? Are they inside buyers? A good management team is a prerequisite. It's mandatory.

Second, what is the nature of the asset? Could it be world class? There are 10 categories of questions like these two that we review.

No matter which market you are investing in, before picking a specific stock/company you need to learn everything there is to learn about the operations, the management, future prospects, etc. You need to develop a clear strategy, a strategy you can make use of over and over again. Having a clear system helps you screening as many companies as possible - and hopefully there are one or two which completely meet the requirements you defined in your system.

New 2011 - 10 - 31:

[04:30 pm] Mining stocks as lifeboats: This Boat Will Float

New 2011 - 10 - 27:

[10:30 am] For gold haters: 7 Reasons To Hate Gold As An Investment

[10:15 am] We feel with them: Currency Traders Suffering Worst Year Since 1991

Currency-trading strategies are losing the most in two decades as the volatility that’s boosted volume and profits for investment banks erodes the ability of investors to make money.

Well, these are the risks you have to deal with as a trader, when you decide to go against the big boys in the bank palaces. The quality of your sleep is certainly a lot better when you know that the biggest part your money is invested in the best two assets in world right now: gold and silver.

[10:15 am] Audio: Cato’s Jeffrey Miron: Why Warren Buffett is Wrong

New 2011 - 10 - 24:

[02:00 pm] How investment in selected gold and silver mining shares can help take care of your wealth in good times and in good economic times and in bad ones too: What to look for in a gold or silver mining share

New 2011 - 10 - 23:

[04:45 am] An interview with James Turk, Andrew Kaip and Ian McAvity: Three investment approaches to silver, the volatile metal

There is another big difference between gold and silver. Gold is already in the second stage of its bull market. Every bull market has three stages. Stage one is apathy and neglect. Stage two is when you start seeing price appreciation. That is the longest stage, when more people become involved by purchasing the metal. The third stage is the speculative blowoff. Silver is still in stage one of its bull market even though gold is in stage two. Silver won't get into stage two with a lot more people coming into the market until it goes over $50/oz., which was the high in January 1980, the record all-time high price in silver. Inflation adjusted, that would be almost $500/oz. today. That really illustrates the debasement of the U.S. dollar over the past three decades.

Got Silver?

TGR: Many people call precious metals an insurance policy and recommend it be about 10% of a balanced portfolio. What do you see as a reasonable level of physical precious metals?

JT: It depends how much cash is in your portfolio. And that depends on a variety of factors, including comfort level, age and goals. The historical norm is that you should have 10% of your portfolio in the precious metals. But since gold and silver are so undervalued and national currencies are being destroyed by central bank policies around the world, I think at the minimum you probably want to have 25% of your portfolio in gold and in silver. I am talking about physical gold and physical silver. But the general rule is the older you are, the less willing you should be to take risks, which means that you want to have even more liquidity in your portfolio. So, as you get older, you should be well above that 25% of your portfolio in physical gold and physical silver.

We have no problem recommending to invest 100% + X of your portfolio in precious metals. That's exactely what we did: GOING ALL IN...and we feel very confident about it.

If the price drops another 50%, we'll still be good and try to mobilize even more paper money to add to our position. Balls to the wall is the motto. If you can't deal with a 50% price drop--->stay away from the precious metals market, since this is not the right place for whiners.

New 2011 - 10 - 22:

[04:30 am] Seems like savers can be defrauded with inflation forever, they simply won't learn from the past: Suicide of the Saver

Compared to the previous 100 years, real UK interest rates – the returns paid to cash deposits over and above inflation – have been atrocious since 1911. Averaging less than 0.9% per year, they've been a fraction of the 4.4% averaged in the 100 years starting in 1811, just after the British Parliament's Bullion Committee recommended a full return to gold following the Napoleonic Wars, setting in train the global Gold Standard run from London until the start of World War I.

Well, perhaps they can't be defrauded forever, but - for a very long time - like nowadays.

New 2011 - 10 - 14:

[06:15 am] By almost any measure, gold stocks are undervalued. Should we load up? Time to go all-in on gold stocks?

Gold mining companies are earning record margins, averaging a whopping $1,268 per ounce last quarter. In both nominal dollars and percentage above costs, margins have never been this high for gold producers. Stock prices, however, have not responded in similar fashion.

This is a potentially significant point, because margins of this magnitude will be ignored only so long. When the broader investing community begins to take notice, investors will snap up these highly profitable stocks and push prices higher. The “catch-up” in gold stocks could be tremendous.

New 2011 - 10 - 10:

[12:00 pm] Video: Everything You Know About Investing Is Wrong: Jim Bianco

Well, that boy Jim Bianco doesn't seem to know a lot about investing himself. He's propagating bonds, since they outperformed stocks over the long-run in the past 30 years. Unfortunately, neither the bond market, nor the stock market, nor any other market in the world moves linear. Therefore we can't proceed on the assumption that the bond market will continue the way it did in the past, and now less than ever, since debts of the most important countries in the world have reached a territory where they start to grow exponentially over the next years, which means that it is and will be absolutely impossible to pay them back - ever! This means that a haircut will be necessary in order to diminish debt. So we doubt that bonds are such a good idea to invest in.

No word being said about gold or silver in this video,...no bubble in sight:-)

New 2011 - 10 - 06:

[11:15 am] Precious metals in particular: We´re Bottoming: Time To Accumulate

New 2011 - 09 - 30:

[09:30 am] Financial Sense Newshour: Rick Rule: Gold Equities Set to Outperform—All Fundamentals Now in Alignment

New 2011 - 09 - 22:

[02:15 pm] Bloomberg: Why Identifying a Bubble Is So Much Trouble: John H. Cochrane

[11:15 am] First of all you need 'common sense': What It Takes to Become a Millionaire

In most cases, the road to financial security in retirement comes with steady savings, strategic investing, and probably a later retirement date than you may have envisioned at the start of your career. Keep these three rules in mind: First, you need to live within your means. Next, you have to commit to saving a certain amount every month and stick to that goal. Then, you have to make sure your investments are in a diversified portfolio — a mix of stocks, bonds, and alternative investments (commodities and real estate) and rebalance that mix to attain your goals for growth.

Rule number 1 and number 2 are correct, but we don't agree on rule number 3: the key to success isn't diversification, but concentration. Concentrate your money in the best asset class - right now it's gold and silver - ride the bull until he gets really really mad and then move on to the next promising asset class, and concentrate again. Pretty easy.

New 2011 - 09 - 19:

[04:15 pm] Are you gonna be one of them? Large Share Of Americans Expect To Be Millionaires Within Next Decade

"This is the easiest time to become a millionaire in America than I have ever seen by far and I think the wealthy see that an that is why they are getting wealthier,"

One way to get there is by buying some gold and silver. This is probably the easiest way to make a fortune over the next years - as a investor.

[04:00 pm] The disciples continue to be busy, buying apple shares as if there is no tomorrow: Apple stock hits $411.50, its highest level ever

New 2011 - 09 - 14:

[10:45 am] FinancialSense: Yes, The Stock Market Has Been This Volatile Before

New 2011 - 09 - 06:

[09:15 am] Doug Casey: Money: How to Get It and Keep It

Don't consume more than you make: save! Don't spend: invest!

Better read this sentence twice.

New 2011 - 09 - 05:

[05:45 am] According to Rick Rule, volatility across the board is likely to increase as politicians continue their debt dance but, he says, the expected swings offer opportunities: Metals stock volatility to increase but, so will opportunity - Rick Rule

New 2011 - 08 - 30:

[03:15 pm] When it happens, gold will be the new money: Why Gold Will Replace US Treasuries as the World's Last Risk-Free Investment

New 2011 - 08 - 29:

[08:00 am] Follow the Money: The four rules of investing

New 2011 - 08 - 23:

[09:15 am] This is the right time to buy: Outperformance by gold bullion makes gold stocks very cheap - Charles Oliver

New 2011 - 08 - 19:

[06:30 am] From the Forbes boys: Gold Stocks Have Not Been As Good As Gold But That's Changing

“I think we’ve reached a stage,” says First Eagle Funds’ Jean-Marie Eveillard, “where [gold is] not just a hedge against inflation, it’s a substitute currency.”

"A substitute currency" - someone's finally got it right, bravo!

New 2011 - 08 - 17:

[04:45 am] Some basic investor knowledge everybody should be aware of: Wall Street's New Lie to Main Street - Asset Allocation/Diversification Must Read!

Asset Allocation (Aka diversification) is the best approach to investing.  Everyone is talking about asset allocation.  It’s not a surprise given all the new funds, REITs and ETFs that have popped up in the last couple years. The more diversification sold to individuals, the more money to buy them all.  Wall Street has to sell what it has doesn’t it   ? It’s just good business for them. But not for you.

No longer does Wall Street  even want you to consider buying what you know. Remember Peter Lynch describing how buyers of stocks should pay attention to what they see in the mall and elsewhere and use that as a source  of ideas and information ? Or Warren Buffet suggesting that we should actually invest in things we know and look for the value there ?  Well you can forget about that kind of investing.

Today, your investment advisors want you invest in things you have absolutely no fricking clue about and have pretty much absolutely no fricking ability to learn about.

The key to success is to concentrate your investments - provided that you know why your investment makes sense. This is the only possibility for the average middle class/lower class person to ever make a fortune and to get out of that ever repeating earn - consume - earn - consume - cycle.

[04:45 am] SLW is definitely a good company: Higher prices and lots of opportunities keep Silver Wheaton CEO bullish

New 2011 - 08 - 15:

[02:45 pm] Because it's only paper: Rich shy from risk of stocks

[08:15 am] Old boy keeps repeating this thought over and over again, but no one pays attention: Buffett urges higher taxes for billionaires

In the op-ed, the 80-year-old investor said his federal tax bill last year, or the income tax he paid and payroll taxes paid by him and on his behalf, was $6,938,744.

“That sounds like a lot of money,” Buffett wrote. “But what I paid was only 17.4 percent of my taxable income -- and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

The tax burden of Warren Buffett is lower than the tax load of his sheep-like employees who earn many billions of dollars less than he earns each and every year. Welcome to the United States the world. There is no better example than this one right here to point out why it makes so much more sense to become an entrepreneur/investor than an employee whose ass is getting kicked all around the clock.

New 2011 - 08 - 10:

[08:30 pm] MyTwoDollars: 10 Ways to Stop Wasting Money

Lottery Tickets – Often called a “Tax on the Poor”, spending a fortune on lottery tickets is a foolhardy way to try to get rich. Sure, it happens to some people once in a great while but it’s probably not going to happen to you. That being said, I myself do buy the occasional $1 ticket just to give myself a quick boost in the “what if…” section of my brain, knowing full well I am not going to win. $1 isn’t going to break me anytime soon, but consumers spend $70 billion per year on lottery tickets. That’s a lot of wasted money.

Playing the lottery = idiot tax number 1 in the entire world.

New 2011 - 07 - 25:

[04:15 pm] Due to the disciples: Apple Shares Touch $400 Mark

We thought about buying into apple about 5 years ago, but only god knows why we didn't.

This is a good example to point out the difference between an investor and the average consumer sheep. The disciple bought an apple product (ipod, iphone) 5 years ago and the product itself is pretty much worthless today. An intelligent investor who bought apple shares back in mid 2006, when the share price was around $60, would have increased the value of his stocks sevenfold. An investors makes money, while the whole world is spending it like crazy. Awesome feeling.

Previous posts: Sep 11 (2010) until July 24 (2011)