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Moore just how long have you been following this strategy. I have lived in Vancouver the speculative mining venture capital of the world. I inhereted a pile of worthless mining certificates from an uncle who invested in non=producing mining ventures . They do have a short life expectancy some times shockingly so they can in no way be considered non expiring options on the price of gold.

Moore please tell me why the US treasury can not say each $ is backed by 1 1/000 of an ounce or any other ratio which they decide. Clearly at one ratio let us say the old standard every one would immediately swap their paper for for bullion but there is a price where the mkt as opposed to you personaly would be indiferent. You appear to be anchored as are most gold to the moon believers in the old 1/35 exchange ratio however when you look at gold in relation to price of almost any other measure it appears expensive. Gold to the dow gold to housing gold to other commodities gold to hours of labour. There are times when gold appears as an attractive alternative to fiat currency to hold your cash. Mr Buffet at one point I believe held the largest single amount of silver bullion since the Hunt Bros. tried to corner the mkt. Bubbles are extremely difficult to identify prospectively but easy as pie retrospectively every bubble however has a chart that looks a lot like the one that caused you so much concern . Gold does appear to be perhaps entering a parabolic period of its price trajectory however the realists here will all admit that 1900 2000 2400 or any number you wish to pick for a short to medium term price target is known only by the gods and your guess is probably better than mine.

The author referenced Tyler Durden the anon. authors of much of the contenet on zero hedge. While I appreciate their irreverence why do I get the sense that these guys are just a bunch of traders using social media to goose their day trading activities.

Intrynsic value and margin of safety are the two central tennants of value investing. Get these two things right and good things flow get it wrong and you can be in for a world of hurt. Intrynsic value is impossible to value for gold all you can do with gold is look at value on relative basis currently gold is unargueably not cheap. Gold bulls keep taking about gold as a currency how many keep all of their wealth in cash it seems to be a pretty sure way to come last in any long distance race. If the arguement is should I hold my cash in gold or tbills, the answer is it depends, on what interest rate am I getting on tbills and what is the price of gold to everything else. The return on tbills over a long period of time certainly for the last 30 years has been pretty decent if one considers the effect of compounding. The US could revert to a gold standard this weekend if they wished they do not by the way have to use the same standard they used previously 1/35 per ounce they could simply add up the gold in fort knox and divided by the currency in circulation and say this is the new standard( A lot of gold bulls would be VERY unhappy if this happened because they are anchored in the old standard) A central bank could also decide that perhaps they wished Not to hold gold the price of gold is where it is because very little of it every freely trades most of it sits in highly gaurded vaults gathering dust. Who knows what the price of gold would be if it was a free mkt set price. It was at least partialy central bank selling which caused the price of gold to so underperform as an asset class during the 80's and 90's in fact gold looked a lot like the the NASDAQ does today until it finaly turned the corner and stopped going down- sideways around the time that equities generaly peaked. When Gold is looking cheap relative to everything else I think it makes some sense to hold some in your portfolio but when its relative price to just about every other measurement of value is showing extended or even extreme valuations one just has to say no thank you to gold. I am actively looking for an entry point to short gold and as I have said before here I expect the new bull mkt in equities will start around and about the same time as gold starts its decline.

I watched the talking heads on CNBC discussing in alarming terms this new bit of information I believe BAC has over 200,000 employees. They might as well been discussing the fact that Bill Gates lost a quarter in the broad scheme of things. Do they only hire bi-polar individuals by the way on the financial news net works.

Hester you're kidding right?

are ceph and vsea on your buy list? regards rijk Schiller 10 year pe chart has been pulled out by some uber bears to indicate the mkt is not cheap. The kind of valuations that will make one pull the trigger using Schillers criteria come along not too often and an inordinate amount of money can be made buying individual companies that ARE cheap. Unless you are just buying the index it pays to pay little attention to Mr. Schillers data I have been able to compound my dough in the past 12 years at a mid teen rate investing in a mkt which has by his definition too expensive. Its a mkt of stocks as well as a stock market. I can find plenty that seems cheap enough to pull the trigger on days like today and hopefully tomorrow too. Using Schillers data you might only get one or two swings of the bat in ones lifetime.

I purchased AAPL for 8.00 per share it had net cash at that time of around 4.00 per share its moat was a rabid customer base. AAPLE users swore by the companies products. I never had used a MAC but I had customers who did and they swore by them. Warren spent more than a few years trying to turn Berkshire's business around if the the history books are in fact true. It is also worth noting that Warren is investing billions and billions today give him 100,000,000.00 or less to invest and more than 20 years of life expectancy which prolly covers most of us here and he would be back to the old play book cigar butts, net nets, special situations, workouts ,arbitrage etc. My point is that there is a price for BAC and Sears and EK where it makes sense to be an owner. I reached it on BAC not so sure on Sears and EK.

WOW this is corner of BERKSHIRE. Berkshire Hathaway was one of the worst value traps of all time yet a great capital allocater was able to spin the miserable declining cash flow of that dying business into one of the greatest piles of dough in the history of man. Warren will admit he should not have bought BRK and also says that when a business with a bad reputation is combined with an operater with a great reputation it is typically the business whose reputation is intact. As value investors you are always going to have some investments in your portfolio that MR. mkt feels for one reason or another are dogs which is just another name for value trap IMO. Stuff gets cheap (margin of saftey) because Mr mkt in his infinite wisdom says that the problems are permanent. I would like to remind some that AAPL was once a dog

To the question of how to short gold there are options on GLD and inverse etf,s which will get you a decent return if you are right on your thesis. I shorted gold last week and closed it out at a small loss yesterday. The price of Gold in US dollars has only been higher on an inflation adjusted basis for a couple of months in my life-time. The ONLY reason to own gold at any time is as a hedge against disaster and a trade. The Gold bugs are certain that there will be a collapse in currencies and gold will be the only safe haven ,the fear trade has pushed people into gold and the momentum players are also all over gold. It will either do the parabolic thing and then crash or it will correct. All it will take for the price of gold to go down is producers start hedging or some country decide perhaps it is time to change gold for another asset. If by the way Ben is so silly to announce QE3 I think the parabolic thing is a distinct possibility. A bunch of money is certain that QE3 is right around the corner. I hope Ben says we are done ,it is up to fiscal policy from here on out. I find the Dow to gold chart very interesting it makes me think that the turning point in the mkt may be closer than I think. The last sideways mkt was 1968 until 1982 the bottom was in 1974 but the mkt did not really start going up until 1982. I am pretty sure that the bottom was March 2009 but perhaps we are closer to the point were we start a new bull mkt. I think one of the things that has to be in place however is a falling gold price before that point can be reached. I think I said somewhere recently that we can not have a bull mkt if the "wealth creators " keep putting their dough in lumps of shiny metal.

This is Prems version of Borshoms is my guess. Any idea of how big a purchase this was.

Ditto to the above zero on ideology 100% on practicality not so sure on the retirement age to 70 if I was 63 I think I would be voting against it.

I have always thought he was a an idiot a rich one mind you, this blog has changed my opinion, thanks.

The premiums are a fraction of the payments, deflation helps the industry, a building you thought would cost 1000000 to replace only costs 800000, claims are less shareholders benefit.

I hope you are right I sold gold short yesterday. I made some dough shorting silver hope to do it again on gold. Gold has not gone parabolic therefor it is not in for as much pain on the down side.

Eric congrats but could you leave just a little money for the rest of us who are not so quick and bright. ;D

I am going to let you in on a little secret the ECB is broke ,done like dinner, heres hoping that the rest of the world helps them out ...I think they are living on Bens swap line right now.

From everything I have seen BAC ran a pretty darn good bank the stuff that they had on their balance sheet going into this mess was as good as any. The stuff that they originated was rock solid. They bought a ton of really crappy stuff when they bought Country wide and Merrill but with country wide they got a mortgage servicing business which was and still is a gold mine and they got a great franchise @ Merrill. Did they know how crappy the stuff was at Country wide prolly not but I am guessing that they figured if the bad stuff did not cost them more than 10 billion they would do ok. These lawsuits could drag on for a decade before they are all heard in the mean time their business is just getting stronger. I was worried about European exposure but they seem pretty well firewalled in that regards. I think the guys who are suing BAC would have been in worse shape if BAC had not stepped in and bought Country wide Country wide would have been TU they would have had no one to sue. Now if some one wants to start a lynch mob and string up Mozilla and Stan Oneal i will pay for the rope. Parsad Please feel free to edit or delete this I do not know why I feel so cranky cuz I made a bunch of dough today. ;D

You...may have a point about Mr. Bove... http://www.youtube.com/watch?v=wEeSjp3Acs4&feature=channel_video_title He says in that video that "everyone is selling bank stocks". To whom? One could just as likely say that people are frantically buying banks stocks -- look at the volumes. It looks like to us?

Did any one see that 400 point swung in the DOW a few minutes ago why do I feel that someone just stole a whole bunch of dough and why do we put up with it.

I just read a story on the AIG lawsuit against BA. It appears that AIG was happy to buy the crappy MBS because of the fees that they could get from lending them out. It was their securities lending unit which was doing the buying. The INSANITY of the activity which was happening is beyond belief. I will lease the rope to my executioner because he is offering me an attractive rate but I am going to sue the guy who sold me the rope.

I posted elsewhere but it makes sense for it to be here. HSE-T Husky oil Tol Bros 2013 Leaps BAC 2013 leaps and common and HXU-T a levered tse60 index. I was tempted on WFC but did not bite tomorrow perhaps. ING should be interesting as well will perhaps buy BRK tomorrow if its cheaper. I have corp debs which I will sell if mkt continues to decline biggest holding is FFH debs which I would gladly sell if FFH gets cheap enough I would rather own the common but with so many cheap insurance co's out there I could not see FFH valuation as all that compelling @ 400

Not according to the match throwers at zero hedge but I hope your right. I purchased some JAN 2013 calls today. I put a lot of dough to work I bought BAC TOL thru leaps bought HSE-T bought CM-T. The mkt is about as oversold as I have seen it in 30 years this is an institutional panic(they almost always are) I ended up just buying ETF's to put dough to work. There is so much liquidity

Who says they need saving. AIG files a lawsuit puhleez give me a break if they had not written the CDS's the mkt never would have grown in the 1st place AIG should have been buried except for the fact that they would have taken everyone else down with them. Country wide and Merrill sold a bunch of crappy paper who here bought any ,no one is my guess . A bunch of highly sophisticated investors with perverse compensation schemes bought the crappy paper.

The fiat based money system has been in place for quite a while and we have witnessed a golden age in terms of over all wealth and well being.I think Buffett and Munger understand all too well some of the short commings of alternative monetary systems and feel like democracy it is a flawed system but better than the alternatives.