The problem with most of the of the 'generalist' bulls here is that they don't understand systemic risk.
Hence why the best place to be making the money now is from clipping their ticket.
The question, though, is whether an investor is considering the effects of systemic risk on their assets, rather than background waffle of systemic risk. I don't think trying to predict the future qualifies as risk management.
If the effects on relevant assets are being considered, I don't see the problem. There's a lot more to managing risk than worrying about values decreasing due to macro factors, but how such risks are considered within the overall assessment are more important, I think.
The question, though, is whether an investor is considering the effects of systemic risk on their assets, rather than background waffle of systemic risk. I don't think trying to predict the future qualifies as risk management.
If the effects on relevant assets are being considered, I don't see the problem. There's a lot more to managing risk than worrying about values decreasing due to macro factors, but how such risks are considered within the overall assessment are more important, I think.
Ok sure, although most sensible people agree that there are (still!) a lot of flashing red signals in the macro world. I don't for a minute pretend to know exactly when the event will occur or the precise nature of it. What I am fairly certain of (and the only vague prediction I've made here) is that we won't be muddling around wondering what it is in a year's time.
But going back to your point, I actually think most bears understand risk management, they just choose to ignore it and make emotive decisions in the same way that most bulls do. And every so often the market swings in their favour and they can claim victory.
A real investor would never permanently label themselves a bull or a bear. This is a distinction made only to bring the excitement of a sport to the generally duller pastime of investing.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
I probably agree with more with this than anything you've ever written, Frummy.
Although I think property is a good asset for investment, I wouldn't really call myself a bull. Ultimately, what is needed is a strategy that achieves the relevant goals of the investor using whatever assets and strategies are available. I think that goal setting is part of the problem. Goals like 'get wealthy' or 'retire young' fail the SMART test; they are not Specific, Measurable, Achievable, Realistic or Time-related.
For me, setting clear and well-defined goals is the first step in managing invesment risk.
By definition, a safe asset should be a store of value and according to the chart, Gold has been exactly that.
Stocks may have provided many with great riches but they have also made many very poor.
Stocks have only made some of the ones who do short-term speculation with leverage very poor. Anyone who has simply spread their purchases across an index or (more recently) bought an index fund has done OK across any 10-year period. If the roller-coaster doesn't suit you, then blue-chips have been smoother at the cost of a slightly lower return.
I don't think anyone just wants a store of value beyond an emergency stash. I guess if I were totally risk averse I'd be in bonds except for a few hundred low-value gold coins buried in a safe place. And I'd still be worried that in the event of the shit hitting the fan the fact that the public has been unfamiliar with gold coins for so long would make them worthless. They have no utilitarian value and what value they have is purely in the eye of the beholder. This is no longer 1915 Vienna.
John Frum
13 Oct 2014, 09:10 AM
Ok sure, although most sensible people agree that there are (still!) a lot of flashing red signals in the macro world. I don't for a minute pretend to know exactly when the event will occur or the precise nature of it. What I am fairly certain of (and the only vague prediction I've made here) is that we won't be muddling around wondering what it is in a year's time.
There has never not been a lot of flashing red signals in the macro world.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
I bought mine in August so I only care about the $10 AUD per ounce gain I have made since then.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
What I am fairly certain of (and the only vague prediction I've made here) is that we won't be muddling around wondering what it is in a year's time.
Yep. October 2015. 12 months and counting.
You can laugh all you like but the bearish predictions made by the so called gloom and doomers back in 2004, 2005, 2006 as the whole world embarked on a housing/ stock market leveraged binge came to pass. My neighbors down here in Daisy Hill just sold their home for less than they paid for it in 2007 and the Australian stock market is no higher than it was back then either. 7 bloody years of piss fart dividents and mountains of risk. I wish I had bought gold back in 2007. Biggest regret of my life. Brian
You pick a chart of gold that covers the worst performance timeframe and leaves out its stellar performance for the decade before? If your aim is to persuade Australians its a bad asset to hold based on that then you must consider us a nation of complete fools. Are you an RE Agent?
I could find a similar chart of Australian property over the past 10 years, but I won't, because I don't stoop to manipulation and lies either in real life or here on a forum. Australian Gold is up again, $1411 this morning. I think I might join this forum and start a gold thread of my own, one with a positive title, since it is obvious the gold bull market is far from over and that along with Australian investment property, it has been a solid safe haven.
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