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  #21  
Old October 6th, 2011, 12:26 PM
Machinist Machinist is offline
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Originally Posted by shadroch View Post
But stocks pay dividends and precious metals don't. With compounding of those dividends, the gap grows much larger. For a long term investor, those compounded dividends will eventually surpass the intial investment in the stocks. Gold sits and doesn't grow. 100 shares of stock will become 200 or more shares as the dividends are reinvested, or a person can use the dividends as income. Gold sits, it doesn't grow and it doesn't produce either dividends or income.
There is nothing wrong with owning precious metals. Its just not the best place to park all your money. Neither is the stock market.
But if I had to do 100% of one or the other, I'd own no gold.
These days, I'm buying High Grade comic books. Just recieved a copy of the first appearence of Spiderman in on consignment. i'd like to buy it myself but its a bit out of my price range just now. I think that will double in price before either gold or the Dow does.
Interesting about the comic books....
Myself i just bought a vintage Wright & McGill split bamboo flyrod. I think alot of the vintage, antique, stuff is a good deal nowdays. Although i use alot of my antiques for everyday use.

Machinist
  #22  
Old October 6th, 2011, 03:37 PM
blackriver blackriver is offline
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i those numbers factor in survivor bias. many of the companies you would have bought in 1979 dont exist now and many of the companies that make up the stock market didn't exist in 1979. The success of these other companies and failure of some companies you would have owned are not factored in. Almost every economic indicator we have is almost worthless. the way we talk about the economy is like how someone sees football team A is 6-4 playing against team B thats 4-6 and says "you should bet on team B". He's right on 1 level and wrong on about 100 levels he doesnt even know about
  #23  
Old October 7th, 2011, 06:16 AM
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blackjack avenger blackjack avenger is offline
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Originally Posted by shadroch View Post
The return is, quite simply, the return. If you want to say that cheating may affect the return, thats one thing, but to say the return is less than is stated is to be clueless. A return is not a hypothetical EV, it is the real life actual result.
If a broker sells phony stocks, leaves with the money. The return has not been damaged yet the consumer has.
  #24  
Old October 7th, 2011, 06:45 AM
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Automatic Monkey Automatic Monkey is offline
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Originally Posted by shadroch View Post
Gold in 1979 was $800 an ounce.
Silver was over $20 an ounce.
Dow Jones was around 800.

Today
Gold is around $1900 an ounce
Silver is around $40 an ounce
Dow Jones is around 11,000.

Gold went up 150% in that time, but you gained no dividends and had to pay to store it.
Silver went up 100%, paid no dividends and cost you money to store
Stocks went up almost 800% plus paid dividends that over twenty plus year would have doubled your investment on top of the gain.

The bottom line is that gold and silver are immune from compound interest.
Compound interest is the single most powerful tool in the financial portfolio.Stocks have it, precious metals don't. Fools scoff, the wise understand.
False. Stocks do not pay interest.

Some stocks pay dividends, but the stocks that pay dividends tend not to be the ones that increase in value 800% over 20 years. They have paid out their profits in cash to stockholders (a perfectly legitimate thing to do with it) while the ones that don't pay divs have increased the value of their company with the profits. There are a few exceptions, but in most cases you have to pick one or the other.

I prefer income-generating shares myself. The speculative part of my portfolio comes to the casino with me.
  #25  
Old October 7th, 2011, 10:42 AM
shadroch shadroch is offline
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Where did I say stocks pay interest? I said that stocks pay dividends and dividends are subject to the rule of compound interest.Gold is not.Over time, compounding of dividends( or compound interest, as it is referred to) makes stocks the much better investment. In a properly diverse portfolio, dividends will account for upwards of 50% of your return over the long run.
  #26  
Old October 7th, 2011, 12:49 PM
blackriver blackriver is offline
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Originally Posted by Automatic Monkey View Post
False. Stocks do not pay interest.

Some stocks pay dividends, but the stocks that pay dividends tend not to be the ones that increase in value 800% over 20 years. They have paid out their profits in cash to stockholders (a perfectly legitimate thing to do with it) while the ones that don't pay divs have increased the value of their company with the profits. There are a few exceptions, but in most cases you have to pick one or the other.

I prefer income-generating shares myself. The speculative part of my portfolio comes to the casino with me.
companies that dont see any new opportunities to expand (and/or can borrow for free f*ck you auto makers) pay dividends. companies that see new opportunities tend to hold the dividends to pay for expansion. this is a large part of why the auto bailout was so mest up. these manufacturers can afford to pay dividends, but cant pay their bills!? gtfo
  #27  
Old October 7th, 2011, 01:00 PM
moo321 moo321 is offline
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companies that dont see any new opportunities to expand (and/or can borrow for free f*ck you auto makers) pay dividends. companies that see new opportunities tend to hold the dividends to pay for expansion. this is a large part of why the auto bailout was so mest up. these manufacturers can afford to pay dividends, but cant pay their bills!? gtfo
I have to disagree with you and automatic monkey both. This is predicated on the myth of "growth" and "value" stocks. According to this theory, "Growth" stocks are growing, and will have capital appreciation. On the other hand, "Value" stocks tend to have good dividend yields, low price to book, etc.

In reality, value stocks significantly outperforms "growth" stocks over the long term. So-called "growth" stocks tend to just be speculatively overvalued.
  #28  
Old October 7th, 2011, 05:57 PM
shadroch shadroch is offline
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Originally Posted by blackjack avenger View Post
If a broker sells phony stocks, leaves with the money. The return has not been damaged yet the consumer has.

Buying stock is protected from fraud or theft by your broker by a Federal Agency that acts like the FDIC.
It's one thing to be clueless, but why do you insist on making sure everyone knows you are?
Is the rate of interest on your money in the bank affected by an embezzling teller or a bank holdup? suppose someone gets hit by a car while on the way to the bank. Should others not use banks because of it? Thats as assine as your statement above.
  #29  
Old October 7th, 2011, 06:26 PM
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blackjack avenger blackjack avenger is offline
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Originally Posted by shadroch View Post
Buying stock is protected from fraud or theft by your broker by a Federal Agency that acts like the FDIC.
It's one thing to be clueless, but why do you insist on making sure everyone knows you are?
Is the rate of interest on your money in the bank affected by an embezzling teller or a bank holdup? suppose someone gets hit by a car while on the way to the bank. Should others not use banks because of it? Thats as assine as your statement above.
Are you stating no one has ever lost money in investing due to unlawful activity?

Perhaps an excerpt from the article below?

Rich investors 'wiped out' by Wall Street fraud Broker who delivered huge returns is charged with $50bn swindle carried out over decades
By David Randall
Some victims of Wall Street's biggest fraud –planned and carried out over decades by one of its most respected figures –are as yet unaware that their entire savings have been wiped out, financial experts in New York said yesterday. Such is the extent of Bernard Madoff's alleged $50bn (£34bn) swindle, and so convoluted its paper trail of derivatives, that this weekend there will be Americans under the impression they are rich who are oblivious that their wealth had been placed in Mr Madoff's apparently criminal hands, and is therefore now lost.

Last edited by blackjack avenger; October 7th, 2011 at 06:54 PM.
  #30  
Old October 8th, 2011, 12:43 AM
shadroch shadroch is offline
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Originally Posted by blackjack avenger View Post
Are you stating no one has ever lost money in investing due to unlawful activity?

Perhaps an excerpt from the article below?

Rich investors 'wiped out' by Wall Street fraud Broker who delivered huge returns is charged with $50bn swindle carried out over decades
By David Randall
Some victims of Wall Street's biggest fraud –planned and carried out over decades by one of its most respected figures –are as yet unaware that their entire savings have been wiped out, financial experts in New York said yesterday. Such is the extent of Bernard Madoff's alleged $50bn (£34bn) swindle, and so convoluted its paper trail of derivatives, that this weekend there will be Americans under the impression they are rich who are oblivious that their wealth had been placed in Mr Madoff's apparently criminal hands, and is therefore now lost.

In the first place, Bernie Madoff was not selling stocks. He was selling shares in a hedge fund that was supposed to be lending commericial contractors bridge loans. It had nothing to do with the stock market.
The people who lost money under Madoff are getting it back under the program I mentioned. Like the FDIC, the program has limits. Anyone who kept their accounts under the limits was made whole. Just as anyone who lost money in the Savings and Loan debacle got their money back- up to the FDIC limit. If you had an account larger than the government limits, you will be refunded via a separate lawsuit that is clawing back payouts and from his siezed assests.
Can you honestly do no better than an almost three year article? I was mistaken for calling you clueless. It now appears you are intenionally being misleading as to find that article you had to have passed over dozens of others that tell about the refunded accounts.
But once again, you are so far out on a meaningless tangent, I have no idea what point it is you are trying to make.
You can have the last word, I'm done. Invest how you will. Best of luck.
 

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