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So did any one follow my Gold diversification suggestion?

Discussion in 'Off Topic' started by MichaelWhyte, 15th May, 2006.

  1. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Guys,

    Just thinking back to this thread from November last year:

    http://www.invested.com.au/forums/showthread.php?t=480

    In that thread I made a very strong case for diversifying into some gold holdings based on a host of reasons. Here's a taste of that justification:

    http://www.invested.com.au/forums/showpost.php?p=2869&postcount=6

    http://www.invested.com.au/forums/showpost.php?p=2872&postcount=9

    http://www.invested.com.au/forums/showpost.php?p=2875&postcount=11

    Sim asked the question, which I responded to in the last linked post above, about where I thought gold was heading. I responded with the following:

    With gold now at US$720 an ounce I was just wondering whether any one acted on the information I provided? Purely out of idle curiosity...

    That's a 44% return since the 29/11/05, or 96% annualised.

    Just a thought? :D

    Cheers,
    Michael.
     
  2. gazza

    gazza Well-Known Member

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    No and looking back I'm sorry I didn't :confused:

    More importantly though, did you? And if you didn't, why not? :(

    and if you did, congratulations :) and more specifically what did you invest in? Gold bullion, or shares in gold mining companies (what one's?) or managed funds investing in gold mining ventures?
     
  3. MichaelWhyte

    MichaelWhyte Well-Known Member

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    I figured that would be the first question posed! :D

    Unfortunately, the answer is nope, didn't do it. Mainly because of my preferance for diversification and conservatism. I'm fairly risk averse despite my comfort with high levels of leverage. For me to "bet it all on gold" would have been too far away from my comfort zone.

    I did strongly consider diversifying a bit into gold by way of the Perth mint, but it all just seemed too hard in the end and work got the better of me.

    I'm also learning to trust my analysis more now. I have regularly predicted movements in most asset categories broadly based on sound fundamental analysis. I backed this analysis by leveraging big into the ASX 7 months ago and have done well as a result. I'm also backing my "flat residential property market in Sydney" analysis and am holding off buying there until I see real value and good fundamentals. However, I didn't back my own gold analysis with real dollars to my own personal dissappointment too. Well, I put a $20 bet on gold making it to US$1000 by years end when it was at $500 so I guess I did back it a bit! :eek:

    As my investment skills mature and I learn to trust my own analysis I'll probably back my own deductions with more dollars. Until then, I still place some pretty sizeable calls such as the ASX, but do so through conservative vehicles such as NavTrade. I knew the ASX would rise on the back of commodities but was too chicken to put it all in a resource fund...

    Cheers,
    Michael.
     
  4. gazza

    gazza Well-Known Member

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    Thanks for the honesty , Michael. As you say, it's one thing doing the analysis, quite another to put your money where your mouth is. On the positive side though, as you become more experienced and your analysis continues to prove correct, you will start trusting your own judgment more. I am in the same boat too, still too reliant on what others say rather than trusting my own judgment.

    There might still be time for gold anyway. I went to a Peter Spann presentation a few weeks back, his view is gold will $800 in the next year or so and reach $1000 sometime over the next 10 years (and he does have a pretty good track record with his predictions).
     
  5. MichaelWhyte

    MichaelWhyte Well-Known Member

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    *bump*

    :D

    Might be time to bump this old thread again. Thought I should update this forum on the fact that I did actually back my analysis on Au this time around and bought over a Kilo of Au when it was in the mid $US700's per Oz. Today its up to US$834 per Oz and rising.

    So, to repeat the old question, has anyone else followed my initial recommendation and bought some hard yellow stuff too?

    Cheers,
    Michael.
     
  6. crc_error

    crc_error The Rule of 72

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    I didn't see this thread, but I have been actively writing covered calls against LGL for the last 12 months or so.. I have a open position on LGL as we speak!
     
  7. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Hi crc,

    I'm not surprised you missed this old discussion. It was two full years ago that I first posted on here that Gold was a good investment and that we should all take a hedge position in Au. Gee how time flys hey!

    I'm feeling old now...

    :D

    Michael
     
  8. crc_error

    crc_error The Rule of 72

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    how times fly! makes one think when viewing a investment longer term! really longer term isn't as long as first thought!

    Did you end up getting into gold?

    Gold is also a great hedge against the market.. as when wars/depression breaks out, gold goes up in value! But I don't know why its going up currently!
     
  9. handyandy

    handyandy Well-Known Member

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    Hi MW

    Never saw your previous posts.

    Never the less I did get into gold which cost you money to store and earns no interest:(

    In the end its a just in case investment and its most probably made about 10% in CG. Only decided in August to proceed with these purchases.

    Cheers

    PS I do remember somebody who bought gold in early 80 who paid $800 per oz and then had gold crash to about the $250 mark.
     
  10. Glebe

    Glebe Well-Known Member

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    I can't ever see myself buying gold directly. The closest I would come to that would be to buy a gold company like Lihir, but even then that's not to my liking. I'd rather just buy BHP.

    I was very close to buying shares in Bolnisi Gold back in 2005, could have doubled my money since then... but didn't!
     
  11. Glebe

    Glebe Well-Known Member

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    How's it going in $AUD? I would imagine still looking like a good punt but not nearly as good as it looks in $USD.
     
  12. perky

    perky Well-Known Member

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    The best trade I have done in the last 6 months was on Lihir - rode it from 3.37 on 12/09 to sell it Wednesday arvo at 4.37 - I dont know if gold can go much further in the short term as its risen too quickly for my liking.
    However long term $900 is possible (maybe by XMAS) , but some volatility between now and then...
     
  13. crc_error

    crc_error The Rule of 72

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    I think the predictions for gold is $1000US oz.. but yes, volatility is the environment we are in now!

    Also you should have tried to keep the stock for 12 months to get the 50% discount on CGT.. if your worried about the stock falling, a 6 month put would have got you through, with the bonus of more upside! just a thought..