anoop wrote:

- quote -

I don't know that the word 'investment' can be consistent with the
market timing and short term prognostication of a crash, but my answer
is to buy RYWBX (Rydex Weakening Dollar 2x Strategy).

Usually the dollar needs to fall against something. Not really sure it
makes sense to fear that all currencies will fall, this implies a long
term serious inflation issue. Inflation isn't at the top of the risks
the world seems to be facing right now, IMHO.

Joe
www.blog.joetaxpayer.com

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On Oct 27, 12:35*pm, Igor Chudov <ichu...[at]algebra.com> wrote:

- quote -

Newmont Mining has a profit margin of 11%, so any drop in the price
of gold would reduce production for that company.

--
Ron

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On Oct 28, 2:01 pm, anoop <ghanw...[at]gmail.com> wrote:
- quote -

Thanks for catching that. You appear to be right, so it would help to
hold the ETFs in a Roth or standard IRA instead of a taxed investment
account.

The calls also aren't eligible for the long-term capital gains rate.

--
Ron

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On Oct 27, 10:13*pm, Ron Peterson <r...[at]shell.core.com> wrote:

- quote -

BTW, spending some time researching this topic, I read somewhere
that the precious metal ETFs are considered collectibles and therefore
treated differently than regular investments for tax purposes.

Anoop

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On Oct 28, 4:35*am, Igor Chudov <ichu...[at]algebra.com> wrote:

- quote -

Despite the drop, at least in my area, with 20% down and a 30 year
mortgage, I still would not be able to break even (mortgage + property
tax
+ mello roos + maintenance cost + insurance > = rent).

Anoop

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On 2008-10-28, anoop <ghanwani[at]gmail.com> wrote:
- quote -

http://en.wikipedia.org/wiki/Gold_exchange-traded_fund

- quote -

Real estate comes to mind as something of lasting value, from which
you can extract income by means of renting. Since it has become
cheaper, good deals could be found easier.
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On Oct 26, 12:32*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:

- quote -

But one doesn't have to pay these fees to invest in the ETF, right?

How would you recommend investing if you thought a dollar
crash was imminent? I think the signs are starting to appear
and if/when it does happen things will be happening too quickly
to react. I'm trying to think of a hedge. It seems like all
currencies are in danger at this point, so buying foreign
currency probably won't help in this scenario.

Anoop

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On Oct 26, 2:32*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:

- quote -

If he buys the ETF GLD, he won't have any storage problems. And he can
get paid for doing so by selling calls against it.

--

Ron

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On 2008-10-26, anoop <ghanwani[at]gmail.com> wrote:
- quote -

There are kinds of "bulls", "bears", and other animals and people and
everyone has their own opinion. The fact of the matter is that stocks
pay dividends and have underlying earnings, and gold does not. So to
buy gold as an investment, it has to be very cheap to be attractive,
and it is hard to quantify what is cheap. Is 700 per ounce cheap? IS
200 per ounce cheap?

According to some website, the cost to make an ounce of gold is
$317/ounce.

http://www.mineweb.net/mineweb/view/...9485&sn=Detail

I personally would not buy gold as an investment, at prices much above
how much it costs to produce gold.

Silver is unlike gold, as silver is a byproduct of copper and lead
mining, so costs are harder to allocate, but production costs of
silver are estimated at $5 per ounce. So you could buy silver at below
that price, and not risk too much.

It is not as expensive as some suggested, to own bullion, as far as
the cost of a "roundtrip" (buy and sell) is concerned.

I recall that when I looked for a place to unload my silver bars, I
went to a few jewelry shops and got wildly varying quotes, but found
one that was quoting a spread within 10% for large bars. (something
like 1350 buy, 1450 sell). So it pays to shop around.

As for the inflation argument, which I think has merit, stocks are to
some extent protected against inflation, as well. Inflation is a tax
on cash denominated assets (cash, receivables etc) and is a benefit to
those maintaining float and accounts payable. In the end we all lose
on inflation, but companies will grow earnings to varying degrees.

i

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In article
<3cec6158-0801-4186-954d-2d2c785ed8b1[at]v22g2000pro.googlegroups.com> ,
anoop <ghanwani[at]gmail.com> wrote:

- quote -

You need to be careful listening to pundits, especially if they
have something to gain from what they say. Remember that there
were people and books predicting the DOW would crash the entire
time it was going from 1000 to 14000. And there were people
hyping gold as it fell from $800 down to $300.

And even if you buy the gold, what are you going to do with it?
You cannot eat it or cook with it. It doesn't pay a dividend or
have a rate of return. It has no practical uses and it is only
very rarely ever used in industrial processes. Each year, they
keep digging billions more of it out of the ground, so it is
hardly in short supply, yet the industry is so secretive that
a non-trivial fraction of the offers made each year are out and
out scams. Even if you find legit gold companies, you have to
pay to get in, pay to get out, pay to have it stored, and pay
to have it transported, and pay to have it insured. You have
to make 30% on your money just to break even at the time of sale.
I'd rather earn that 30% than pay it in fees.

-john-

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On Oct 24, 12:50*pm, JoeTaxpayer <joetaxpa...[at]comcast.net> wrote:

- quote -

The reason I was considering gold was because there are several
bears that expect it to do well over the next few years, the argument
being that we will have to inflate our way out of this mess, and
during
that time earnings, and therefore stock prices, may stagnate.

I haven't decided what to do yet...just evaluating options.

Anoop

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On Oct 24, 1:23*pm, anoop <ghanw...[at]gmail.com> wrote:
- quote -

I am buying GLD ETFs and then selling covered calls against them. In
addition to the risk of the price of gold falling, I have the risk of
it rising above the strike price.

--
Ron

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On 2008-10-24, Will Trice <not[at]monitored.net> wrote:
- quote -

I looked at the website and did not find the company to be
trustworthy enough (no audit, etc).

It is a lot easier to just buy gold bars at Kitco and keep them in a
bank deposit box without worrying about some website's integrity. Just
20-40 dollars per year in bank vault costs.

As another poster mentioned, I would not personally buy gold at the
current prices, and gold does not pay dividends.

Silver, at least, is an important industrial metal with certain demand
for it that depends on more than fashion.
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In article
<745904b0-f8c3-4121-bc67-6b555bf866a8[at]d1g2000hsg.googlegroups.com> ,
anoop <ghanwani[at]gmail.com> wrote:

- quote -

Pay to get in, pay to get out, the metal would have to go up 25%
just for you to break even. That doesn't sound like a good plan.

- quote -

ETFs that invest in mines and processing companies, which just
as often as not are scams or shell companies. Look at all the
people that got burned in the late 90s when the Indonesian gold
rush turned out to be totally fake. Again, not a good plan.

- quote -

This looks like one of those scams where they sell the same ounce
of gold to 10 different people. Everything works fine until someone
asks to have their gold shipped to them. Once the scam cannot send
out any more gold, the whole thing collapses. Again, not a good plan.

- quote -

Invest in a diversified portfolio of securities and stocks.

-john-

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anoop wrote:

- quote -

A quick look at their website makes me think this is the same kind of
scam as DxInOne which I wrote about here some time ago.

(As an aside, I was asking here for documentation at that time so that I
could prove that DxInOne was a scam to an associate. A quick Google and
I see now that there's tons of evidence available now. I hope he didn't
put in too much money...)

-Will

william dot trice at ngc dot com

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On 2008-10-24, Igor Chudov <ichudov[at]algebra.com> wrote:
- quote -

How do you avoid paying the capital gains tax?

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"anoop" <ghanwani[at]gmail.com> wrote in message
news:745904b0-f8c3-4121-bc67-6b555bf866a8[at]d1g2000hsg.googlegroups.com...
- quote -

Futures contracts that would have to be periodically rolled forward.

Gold and silver are much better for speculation purposes than for investing
purposes. This applies for the actual metals and for mining stocks.

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anoop wrote:
- quote -

This question is phrased in a way that indicates you really don't want
to be talked out of this. Long term, gold is a losing proposition, and
I'd suggest that the word "investment" is not even applicable to gold.
Gold has shown itself to do no better than inflation and depending on
the timespan, to just keep up with it. So TIPs are a better choice. In
the case of the short term, the use of gold is akin to market timing. So
if you were prescient enough to know that gold was about to go on a
tear, you'd likely have been better off buying inverse S&P ETFs to short
the market.
If you insist on being in gold, the ETF is my first choice, but a
diversified gold mining mutual fund may be better, as the mines' profits
tend to spike as gold rises, and the return is higher than the rise in
the price of gold. This last remark is based on an observation I made
years ago, and I have no current data to support.
I saw Igor's reply as well, and suggest that any advice to commit tax
fraud has no place on this NG.

Joe

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On 2008-10-24, anoop <ghanwani[at]gmail.com> wrote:
- quote -

Several years ago I bought silver in physical form, in 100 oz silver
bars, from Kitco.com. I think that I had 7 such bars, but I sold them
all several years ago. It is very easy to own metal in physical form,
plus it is easy to avoid paying capital gains tax if it appreciates.

I see nothing wrong with GLD either, assuming that you want to bet on
gold.

No idea about goldmoney.com.
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What are the options for investing in precious metals?
- Buying actual gold and silver.
- Buying ETFs such as GLD. What are the risks here
other than the price of gold itself?
- Gold Money (http://www.goldmoney.com). Do folks
consider this safe?

Are there any other options?

Thanks,
Anoop

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