Hi Ro, permit me to borrow this space to chronology the progression of my madness for own later use:0)
http://www.siliconinvestor.com/readmsg.aspx?msgid=12355669
December 22nd, 1999
… I am worried about a Bre-X type of situation in i-net (as if some one sneezes on the buffet table of Gold Mining) that ruins the fun for the rest of us.
Message 12424137
December 30th, 1999
… The earlier part of the book described speculative events since the Roman empire days, and I observe that if one were to replace the nouns (i-net for gold, biotech for tulips, diving engines for cellular phone, treasure in South Seas for WTO in China, etc) and change the dates (1999 for 1720, etc), the resulting words can be published in Wall Street Journal and Barrons, with no loss of sense or education value.
Message 12438115
January 2nd, 2000
… I am curious at times and, gad, look what I found ... message 7289 on Bre-x thread ... the party for that stock fell apart around message 7370. So, let us not get into an argument and concentrate on our basket(s) of eggs. If I am right, I do not have to argue, and if I am wrong, I can not afford to argue.
Message 13973145
June 30th, 2000
… So, we do AOL, SNE, CHL, PHCM, MSFT, and such old standbys that presumably have the stamina to last out most storms. Again, healthy dollops of gold and platinum to hedge a world I do not quite understand.
Message 14000098
July 6th, 2000
… One doesn't actually buy gold and platinum, but one exchanges cash for them as they are "near-cash".
Message 14000098
July 6th, 2000
… Neither the US nor the Chinese governments are selling gold as everyone else is selling down reserves built up in generations. Somebody is wrong on this one.
Message 14680519
October 28th, 2000
I agree with your observations of facts and your analysis, and have some additional thoughts concerning what can go wrong with what we expect.
Gold …
Message 14861804
November 22nd, 2000
… The standard is passed around every so many years, from gold to pound to gold to Yen to Dollar, and maybe onward again to Oil or some other standard. The Dollar's reign has been, so far, quite short in the context of previous trading currencies.
… On gold, I am not a gold bug, and I do not believe in a return to the gold standard. Gold is not money. However, gold is a store of value. I do not know the value of gold, but I do know by observation that the selling of hoards of gold had saved many families in Asia during the past few years. I think platinum is a better store of value. An oil field may be better still.
Message 14883919
November 26th, 2000
I want to emphasize that I am not a gold bug, as I am not a Softbank, or CSCO or MSFT bug.
… I do not believe gold will go up anytime soon … But, when Au does breakout, it will be front page news, in bold and shadow font, triple underlined; at that moment, no other assets will be valued at anywhere near their highs. Thus is the value of insurance.
Message 15054006
December 20th, 2000
… I then proceed to map out the design and execution sequence of a Perfect Financial Storm.
We need
(1) multiple storm fronts
(2) converging in time and space
(3) against unprepared and weakened human participants
(4) lacking effective leadership
(5) far away from any help
Possible storm front #1: Banking crisis (i.e. JP Morgan, BoA, MSDW?)
Possible storm front #2: Currency crisis (i.e. will the dollar stay high?)
Possible storm front #3: Debt crisis (i.e. consumers, telcos?)
Exacerbated by wind chill factor of unsupportable valuations measured against hokey accounting (CSCO, LU, LH, AMZN?), accompanied by generally high valuations (KO, G, PG?) and heat source shortage of high energy costs (gas, oil).
Converging in time of 2001 and in space of USA, now that Asia (incl. Japan) and Europe has been taken out of the locomotive category and are acting as heavily weighed down cabooses.
Against human participants who are individually leveraged (unlike in Asia and Europe) and who no longer understand the meaning of recession, and many of these individuals are looking to retire to the beach life soon.
On leadership, it remains to be seen whether Bush and the Congress can work together, and work right together. It seems a lot to ask of a bunch of lawyers and politicians, elected or not. It took Thailand but a few months to lose what was accumulated in 10 years. Returning the NASDAQ to 1990 cannot take more than a couple of years if true world leader Greenspan really tried.
On help, no one is big enough to help the US, as the US was able to help Mexico.
I am not trying to figure out how to benefit from a financial crisis, as any truly effective bets placed exposes me to dangers of timing. I am only trying to figure out how to keep what I already have through such a crisis. I have a certain amount of trust in the dollar, but not unlimited. I still believe in my financial institutions, but suspicious nonetheless. I find gold barbaric but strangely attractive, and I certainly find stocks disagreeable to the extreme. When the storm hits, even the prepared may react in unprepared ways and panic right along side the Al Greenspan personality cult faithfuls
Message 15063555
December 21st, 2000
Targeting NASDAQ at 1,400 … the 10% per annum over 11 years was a spuriously chosen target for an over-correction ... add a dash of panic, and we could easily reset the index to even below 1,400.
Message 15080764
December 25th, 2000
On gold (just another asset class, no more useful than overbuilt Texas apartments), it may not be important what the learned thinks, but only what the learned will think the unwashed masses around the world will believe as these latter folks scurry around aimlessly in un-choreographed panic. The fear of losing everything will make folks do strange things.
Message 15152323
January 9th, 2001
I agree with you that gold is currently very attractively priced relative to cost. I hold gold bullion coins (Koalas, Maples, Eagles, Pandas, and some really beautiful mint sets from many countries) in quantity ... Together these coins take up a good portion of the bottom-shelf largest sized safe deposit box, as I like to take possession, catch sight of the shine, and fondle the round shapes through the plastic shell, every so often … I treat the stash as an anchor, a sort of Chen clan monetary reserve kept safe against most government fiat and proletariat uprising. One of my offspring will be extremely happy one day, deservedly or not.
… The plus point is it has a 4000 years monetary history, fungible and liquid. The masses, at panic times, may yet again vent their mania to gold, as it would be easy, and certainly much easier than getting hold of the really valuable stuff, platinum. I am now forced to add platinum at a much slower pace than gold as the HK banks no longer keep their platinum sales windows open and only buys
… I know I am now boasting and bragging, but I cannot help it, for I am pleased. It does not concern me if I have to wait 30 years to see the gold mania return as long as I can make money off gold in the dreary interim.
My trades in the options follow some rules: never buy options, only short puts and covered calls, always hold to expiration (adjust risk profile via sale of underlying shares), and mostly at times when the underlying shares are priced at either extreme of 52 week price range, and always in amounts that matter
Message 15406647
February 24th, 2001
“Oh, most excellent gold! … who has gold has a treasure [that] even helps souls to paradise”
Columbus, as quoted from “The Power of Gold” by Peter L. Bernstein, 2000
“The word ‘risk’ derives from the early Italian ‘risicare’, which means ‘to dare’. In this sense, risk is a choice rather than a fate. The actions we dare to take, which depends on how free we are to make choices …”
“Against the Gods – a remarkable story of risk” by Peter L Bernstein, 1996
These are the clarion calls to arise from dormancy and arm, the tired Auricle bugs!
It soon shall be your time to storm the castles of Finance, the Temple of Hedonics, and rule in the Citadel of Species, as you had for four millenniums before the Great Twenty Years Interlude.
The Motley Fools speak of you in tones of contemptuous jest. They shall be silenced.
The Maestro fears you secretly, for you are the believer of true Au species and not of coconut backed construct dressed in sickly green. He shall be vanquished.
But, slowly, slowly and ever so slowly. Never be in a hurry to lose money. We simply do not know the future, and so far, again and again, we have shown ourselves to be lacking in imagination.
I have always wanted to watch history up close and personal, and here now is our chance of several life times.
Message 15421566
February 27th, 2001
Do not know about economics, but here are some upcoming news headlines. The order and specific company names are not important. Say 18-24 months. If we do not believe that at least 25% of the headlines will come to pass within the next 18-24 months (time determined by recklessness of Maestro), we should start to accumulate stocks now, looking pass the valley of gloom.
The sooner we see some of these headlines, the sooner we can get back to buying "for the long term".
…
“Dollar Implodes”
…
“Gold Is Back”
Message 16025306
July 3rd, 2001
Hi Maurice, <<That's cool! I didn't know they had photography when Aztecs roamed the earth.>>
Beautiful, is it not:0)
I just bought another lot of physical gold today.
I have an idea, but need a lawyer to validate the legality (help, CobaltBlue), for Buffet or anyone in his wealth category to implement:
1. Position via leveraged derivatives in the proper direction on securities of various large gold mining companies and heavily short gold investment banks (GS)
2. Buy NEM, AU and ABX outright, under different corporate entities
3. Restructure mining assets and hedge book obligations amongst the three companies, making sure that one chosen company ends up with all the costly mines and North American mines and all of the hedge obligations (say ABX), and another company chosen ends up with all the low cost mines and none of the hedge obligations (say AU in South Africa)
4. Spin-off ABX and let it sink below the waves, along with all the now to be defaulted hedge obligations
5. Call up GS, give them the good news and squeeze hard
6. Refuse to take any calls from the Maestro
7. Sit back and collect on all the pre-positioned leveraged derivatives on all the other gold companies and investment banks, then
8. Close all open positions and take boat to the Bahamas.
Chugs, Jay
... a few months after this last post, NEM started doing their thing, and I got more enthusiastic on Aztec history.
Chugs, Jay |
