Nice post, Marcos! It recalls a discussion we had several years ago. When we "buy" or "trade", we are disposing of one item of value in exchange for another item of value.... which is itself exchangeable. I made the point then, and repeat it now, I regard ALL my stocks as "currencies" in their own right.... currencies backed by the assets of the companies behind them, (rather than by fiat).
Frankly, to my mind, gold is no more the absolute measure of value than is the dollar. The benchmark of value can be whatever asset you choose. The dollar, or any other fiat is a poor measure of value because of its perpetual decline against all other assets.... it's a yardsticks whose inches are getting smaller and smaller. They say that in the 20th century a basket of US stocks yielded a return of 1,500,000 percent but that largely reflects the diminishing inches of the dollar yardstick.
For that reason, and because I am committed to stocks, my gold is a "basket of US stocks". I daily value all my stocks accordingly, playing their volatility against the S&P500 (XSP.to). It works for me. I seem to be consistently out-performing that basket. |
