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/biz/ - Business & Finance

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569579 No.569579 [Reply] [Original]

Why are you idiots still buying paper versions of hard commodities??

Its real idiotic

http://www.youtube.com/watch?v=Dt7hTCeoXUM&t=24m0s

>> No.569584

I buy ETFs that have physical trusts. Also, I have too much money to keep the physical around the house and it's pretty inconvenient.

>> No.569590

1. Buying hard commodities is pretty foolish to start with except a small hedge (maybe)
2. The paper versions are more liquid, have a lower spread, and are more secure.

>> No.569598

>>569584
How do you know they have the physical?
You dont
>>569590
Foolish? Then you'd explain how. Oh wait you cant

>> No.569600

>>569598
>How do you know they have the physical?
I read the prospectus and understand how they work. Only plebs stack coins, which you've already proved you are.

>> No.569601

>>569598
They have no intrinsic value.

>> No.569619

Because they don't know that the price pf "paper gold" has no direct relationship to what tangible gold trades at, and it takes a certain number of shares (prohibitively large cost) to exchange the two.

It renders the market rife with manipulation.

>> No.569622

>>569601
>intrinsic
Except being currency since the beginning of civilization

>> No.569623

>>569619
Technically isn't that manipulation insider trading?

>> No.569625

>>569623

No. It's happened before. If someone holding a lot of units of gold on paper dumps those units, crashes the market, buys them at the cheaper price, then exchanges them for physical gold at a profit not much will be done about it.

It has happened before in recent years.

>> No.569628

>>569622
That has nothing to do with intrinsic value. It just means that gold has been in a bubble for 6000 years. I also wouldn't call it a currency anymore (my groceries aren't priced in gold and I can't use gold to buy them).
>>569619
>what is arbitrage

>> No.569643

>>569628
>intrinsic
you keep using this word.
I do not think you know what it means

>> No.569646

>>569643
It's a function of the expected cash flow of the thing in question.

>> No.569649

>>569628

>what is prohibitive

>> No.569652

>>569649
>what are institutional investors

>> No.569653
File: 51 KB, 808x576, total-real-return-by-asset-class-1802-2007.jpg [View same] [iqdb] [saucenao] [google]
569653

>>569579
>investing in gold
lel

>> No.569660

>>569653
>8 year old image
top kek

>> No.569661

>>569660
You can make an up to date one if you want. Equities still crush everything.

>> No.569663

>>569652

Yes, institutional investors have manipulated the price and tanked the market on more than one occasion. That's why I'm telling you that it's a bad idea in the first place.

You're awfully slow on the uptake and quick to assume.

>> No.569666

>>569663
>I actually understand how ETFs work
>I must be the slow one
I agree that it's a bad idea, but only because gold is a bad idea in the first place.

>> No.569690

>>569660
Right because 200 years of data don't matter if the data ended 8 years ago. I think you need to pay attention to the larger trend in that image of historical asset class returns.

>> No.569704

>>569690
I think you need to read a book

>> No.569734

>>569704
more specifically a history book

>> No.569744

>>569628
>bubble for 6000 years
>faggot is probably younger than 30

Is this the shit you hear from "smart" people and regurgitate on 4chan to pretend you're not a retard?

>> No.569753

>>569704
>>569734
>give you 200 years of history where stocks have completely destroyed gold
>tell me I need to read a history book
Believe it or not I'm just trying to help you. Gold is not a good investment.

>> No.569757

>>569753
You need jesus

What about 800 years before that?

>> No.569792

>>569753
http://www.kitco.com/ind/Lombardi/2014-01-16-If-Gold-s-a-Bad-Investment-Why-Is-This-Country-Buying-150-More-of-It.html

>> No.569829

>>569579

The story of the modern economy is the story of the success of increasing abstraction. I don't have to own and work at my own farm to produce food, I can just buy produce from hundreds or thousands of them, spread around the world. I don't have to carry out all my investments in person or partnership, I can buy shares is a great enterprise instead. I don't need to make or give loans and judge creditworthiness of my neighbors and give them mortgages, I can just make a deposit in my local credit union instead. Likewise, I don't have to buy, transport, store, transport, and sell physical gold when I can buy futures in three click in my brokerage account.

>>569598
>How do you know they have the physical?

Because if they don't, then the truth will come out, and then I will join in a lawsuit against the offenders and win, and then the greatest military power on the planet will be kind enough to extract my missing money from the offenders and return it to me. Welcome to the modern economy.

>>569622

No currency has any intrinsic value, it's just a medium of exchange. Intrinsic value is a property of income-generating assets like stocks, bonds, and real estate.

>>569792

>Turkey is buying gold, so you should too!1!1!!!

Why the fuck would I want to buy any asset that the Turks are? It's pretty clear that they're desparately trying to stop their currency from sliding even further into the shitter. Let me know when the US or the UK or Switzerland starts purchasing lots of gold- oh wait, they just voted overwhelmingly not to because it's a fucking dumb idea.

>> No.569847

>>569829
If gold is so shit then why do countries still use it to establish wealth(or in turkeys case-save it)?

>> No.569856

>>569847
Countries, because of their sheer size, have to buy things with large market depth. That usually means government debt, but it can also be gold. It's important to remember that countries buy things for different reasons than individuals or institutions.

>> No.570925

>>569829
>Because if they don't, then the truth will come out, and then I will join in a lawsuit against the offenders and win, and then the greatest military power on the planet will be kind enough to extract my missing money from the offenders and return it to me.

Not that I'm advocating gold as an investment because it doesn't produce anything in itself, unless you buy low and sell high wich would be speculation but do you honestly believe that you'll get your money back from a scam after all the Madoff, Enron and the John Corzine (who didn't even go to jail iirc) stuff that has happened?

>> No.570939

>>569600
rekt

>> No.570965
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570965

>>569579
>spooky documentary cgi
>"words we wouldn't understand"
>suddenly, black box trading is the problem
It's not upsetting to me; more amused than annoyed. What videos like this have done is create a submarket within silver and gold, ones where there are no centralized exchange rates and that deals in much lower volume.
To me this is exciting because there's so much more volatility and opportunity for arbitrage.

>> No.570995

http://www.youtube.com/watch?v=8PGwrbdArzI

Try to ignore the Jewish hatemongering if you don't swing in that direction but he does have an interesting argument for fiat and against commodity-backed currencies.

>> No.571259

Do ETFs even claim to hold physical gold?
I'm under the impression that they aren't even close to fully backed by physical gold. In any case you can forget about getting your gold back from an ETF during a shtf scenario.

>> No.571262

>>571259
>Do ETFs even claim to hold physical gold
Several do, yes. Commodity ETFs tend to either own the actual commodity, futures, or stock in related companies.
>getting your gold back from an ETF during a SHTF scenario
Unless you own enough shares to form a creation unit (100k for GLD), it's a moot point.

>> No.571391

>>569847
Let's say the euro falls apart. The countries who used the euro can't import essential things like oil anymore because they no longer have any money.
For these kind of situations they have gold which most countries will accept for trading.