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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (177050)	8/23/2021 3:09:54 PM
From: sense	Read Replies (3) \| Respond to of 217792

On gold... The greatest possible leverage available in your own physical gold holdings is that which occurs when you're walking along the street... and, hey, look, there's an ounce of gold someone dropped... Make it not an ounce... but... kilograms... or tons ? Finding is far and away the greatest leverage... But, the next greatest leverage is simply the market's routine application of "fad" to "value"... I developed that quite fully in posts years ago... but, most people really just don't understand that function, at all... They see "bits" of it... think the locus is always only in "hot new tech stocks" that develop something new out of nothing... and they have Cathie Wood chasing their stocks up to $100's of dollars because... why not,.,, it's "the future" ? You see a bit of it in things like timeliness ratings... Zack's, or Value Line, etc., which have "a bit" of attachment to economic cyclicality, but far more to "what everyone agree is hot right now"... that results not in improvements int he business, but in expanding multiples in what you have to pay to own the "in thing"... In the longer term... that factor Graham and Dodd would recognize as the reason value investing works... can be and often is larger than a 100X difference... The easiest extant example... call up a monthly chart of AIG that dates back to before 2001... The peak, at around $1400... From there, a black swan dive... which the chart doesn't show well enough or in sufficient detail, given "smoothing" of the charts paired with restructurings that have altered subsequent chart patterns... The low in AIG... where I found it and was watching as events unfolded... was around $0.0025... Shortly thereafter it had returned to something over $100... not apparent on the "corrected" charts... but, even at the current $54... holders from $1400 are unhappy... and holders from $0.0025 aren't... The value changed, of course... and any positive value that changes to zero has a very large excursion in value that it travels... but, as that happened, the PERCEPTION of the value changed far LESS than the value itself had changed... right up until the point where there was a recognition event imposed... AIG was clearly not worth $1000 in late 2007... given the risks about to be realized ? The right trade would be to short AIG at $1000 and then load up at $0.0025... And, I can tell you... there were a lot of shares traded at $0.0025... much risk that changed ownership... right before AIG became "formerly too big to allow it to stay failed... without the rest of it also having to be failed"... ? Where does gold fit in that picture ? I think... the "necessity" of masking inflation and currency devaluation... have resulted in FORCING gold and silver to be considered as "out of favor"... and very few people, even those who are gold and silver bugs, really understand the long term impact of that... alteration in the underpinnings enabling debasement... If gold were made "money" again... as Basel III threatens to allow... you might take the value of all the money there is... and divide the gold by the money... to determine the price it would have now if we returned to how gold was valued when there was a gold standard... and only gold was money ?