Long Position on Silver and Gold?

[roberth]

I agree, just another option. There is a "right" time for every investment.

Yes, I missed on Ford earlier this year. It was $9 a share and I had some cash but I didn't buy in. Ford closed at $17 yesterday, I could have made some cash on a 10 month investment but I passed to do some other things. Also, historically I do not do well when I'm with Wall Street, with my luck if I'd invested Ford would be at $3 now.

[Sawin]

Those of you that think PMs are the end all be all and are too smart to take profits from paper markets are missing an opportunity.

I don't think there's a single person on here that's only investing in PM's... Most are into real estate investing or the markets for a lot more money than in PM's as far as I know.

[lex137]

I would love to have a few rental units/homes.

[ChunkyMonkey]

I would love to have a few rental units/homes.

All about leverage.. Because bank is taking 90% of the risk of your portfolio. It's better than trading a stock margin account as if my house burns down, insurance company sends me a check... When the stock market crashes, does your broker care?

Furthermore with leverage, your initial investment aka Downpayment doubles every 12 months or so and mostly written off by your depreciation etc for tax reason.

Finally with rental portfolio, whenever the housing market crashes, rental fee goes up (more profit) and bank takes all the risk on the capitalization, yet when the market is hot, rental fee doesn't go down and YOU gain value. It's almost bullet proof IMHO.

Now back to silver, silver is something I have that is liquid enough and much more stable than cash in the bank.

[MrPrena]

Seems like you are comparing below securities investors VS above average real estate investors.
Just look at Forbes richest 400.

Let's look at the fee:
secondary market $10mil comission is ~$9.99.
$10mil Real estate commission is ~6% ($600k)

securities are liquid
real estates needs 6% again to sell, if they can sell it.

I don't need to worry about tenant suing me. FEE on ROTH/IRA? Sure, I only pay $9.99 for a fee. It cost far less than fixing a door knob for tenants.

One of benefit I see on real estate investment is the rental income. Oh wait.... I can always write/sell Way out of money call/puts (some calls it Lotto Options) to create income too with nano/pico risk!

Apple and orange as discussed before. One is a leverage, the other one is speculative / pure gambling for profit.

You want real profit as in dividend, get into 30-50 rental units as starter... The dividend is in the $200k a year. For the same amount of investment, I would never see that kind number in stock. And we aren't even talking about the speculative part itself which is Capital/stock gain and loss.

Stock is the biggest loser in my book. 30% tax, highly unstable, elementary for those who wants to start to 'invest,' highest fee (401k, Ira etc) and worst the so called experts in stock make the same mistake every decade or so.

All about leverage.. Because bank is taking 90% of the risk of your portfolio. It's better than trading a stock margin account as if my house burns down, insurance company sends me a check... When the stock market crashes, does your broker care?

Furthermore with leverage, your initial investment aka Downpayment doubles every 12 months or so and mostly written off by your depreciation etc for tax reason.

Finally with rental portfolio, whenever the housing market crashes, rental fee goes up (more profit) and bank takes all the risk on the capitalization, yet when the market is hot, rental fee doesn't go down and YOU gain value. It's almost bullet proof IMHO.

Now back to silver, silver is something I have that is liquid enough and much more stable than cash in the bank.

[ChunkyMonkey]

Seems like you are comparing below securities investors VS above average real estate investors.
Just look at Forbes richest 400.

Let's look at the fee:
secondary market $10mil comission is ~$9.99.
$10mil Real estate commission is ~6% ($600k)

securities are liquid
real estates needs 6% again to sell, if they can sell it.

I don't need to worry about tenant suing me. FEE on ROTH/IRA? Sure, I only pay $9.99 for a fee. It cost far less than fixing a door knob for tenants.

One of benefit I see on real estate investment is the rental income. Oh wait.... I can always write/sell Way out of money call/puts (some calls it Lotto Options) to create income too with nano/pico risk!

Not an analysis or market expert like many claims to be, but I do have comparison in real life experience after losing 180k over night during the internet bubble and making it back up in short time in real estate. Fixing door knob etc is property manager's job on each property. You are still thinking capital gain, which I used to too. Forget the capitalization, instead, think dividend. A fair comparison in your post would be between a daily trader and a fix and flipper (both are high risk imho).

Here is another recent real experience of my long time buddy who I finally convinced to leave the market... He had close to $100k in 2 different 401k - which had doubled the past 10 years or so. I convinced him to transfer them into self directed IRA account, since he insisted on not cashing out, or paying the capital gain and get over it.

So he used the 100k in the new self directed IRA to put down payments on 8 different rental units. With today's low low rate, he nets roughly $5000 a month after mortgage, insurance, some HOA, and 8% in property manager fee.

The math is extremely simple, he goes from doubling his retirement in 10 years, to doubling it in 2 years thanks to bank's leverage. Most of all, these are real asset that leverage against inflation, unlike paper money or stock. By switching his portfolio from the stock into housing market, his growth is going 5x as fast. Now, he is learning his mistake. If he wouldve cashed out his 401k instead of going IRA, he doesn't have to pay 30% in the future whem his portfolio will be much larger.

Now keep in mind, in rental units, you must ignore 'capital gain' as everything is for long term (traditional market trend shows that your house will gain 100% of its value every decade or so http://2.bp.blogspot.com/-xy8GnkXGKB...3-jan-2013.png). You can compare this part with stock market (dow jones was at 10000 in 2003 and now barely passed 16000 - 60% gain average).

Of course, most stock brokers/ daily traders love to argue that his picks are much higher than average. Hell, I used to do that during the mid 90s..until the crash and got schooled by a college friend when he showed me his 300 rental unit portfolio. Best part is, anyone with a descent credit can do the exact same. Those days of staring at 3 CRTs are long gone.. !

[MrPrena]

Maybe you looked at the people with below average experience with securities, and I looked at the above average securities investors/traders.
Yeah, you do not need to go to Top 5 MBA Finance school with CFAIII and/or CMT to be an market expert.
Again, cap gain isn't the only way to play market. You can get a consistent income from market as well with less capital than real estate.
Don't get me wrong. People around me do all sort of deals besides securities.
Some people make more during Bull market, and some just do better during bear market.
As you mentioned the 2000 internet bubble, I've seen lots of people who lost majority of their $$. In contrast, I've seen people making tons of $$ by shorting and puts on high earnings multiple stocks to nearly zero.

I recently had a failed acquisition on private equity deal up north. I do value the residential/commercial real estate as well, and know the perks.
Although, I am not a "private capital/equities" or "Leverage Buyout" expert, but I do know some enough to make some $$ for a company I use to work for when I was in late 20s.

I believe your friend is definitely better off invest heavier on residential/commercial real estate than a market.
I do know a kid who is in grad school at CU, and he is making about same net on selling out-of-money puts (again lotto options) with far less capital. He does that every month to collect premium.

Your friend doubling his retirement in 2 years on a real estate from bank's leverage is impressive.
Apple with ~550% in 5yr average is impressive? I am sure people who ONLY invest in real estate would say it is LUCKY.
Forget 550% in 5 years. Would you believe me if I told you that my wife had approximately 2000% CALCULATED (no luck) return her retirement within 6 years off of her ESPP/401K alone?


To reply your last statement. Why are you comparing a real estate to a DJIA? I am sure you know better.
Indicies or Index funds ETFs are for people who just want to have a ride to the market. S&P500 with < 50% gain?
Even a no brainier stocks like NFLX or BBY with LESS THAN 2.0 risk multiple had over 150-320% gain YTD. Oh yeah. that is just on Investing LONG without making INCOME off of writing call/put.

I think people should compare $X/yr income real estate investor to $X/yr income securities investors. Not $X/yr real estate investor to Negative $Y/yr securities investors.

Not an analysis or market expert like many claims to be, but I do comparison in my real experience after losing 180k over night during the internet bubble and making it back up in short time in real estate. Fixing door knob etc is property manager's job on each property. You are still thinking capital gain, which I used to too. Forget the capitalization, instead, think dividend. A fair comparison in your post would be between a daily trader and a fix and flipper (both are high risk imho).

Here is another recent real experience of my long time buddy who I finally convinced to leave the market... He had close to $100k in 2 different 401k - which had doubled the past 10 years or so. I convinced him to transfer them into self directed IRA account, since he insisted on not cashing out, or paying the capital gain and get over it.

So he used the 100k in the new self directed IRA to put down payments on 8 different rental units. With today's low low rate, he nets roughly $5000 a month after mortgage, insurance, some HOA, and 8% in property manager fee.

The math is extremely simple, he goes from doubling his retirement in 10 years, to doubling it in 2 years thanks to bank's leverage. Most of all, these are real asset that leverage against inflation, unlike paper money or stock. By switching his portfolio from the stock into housing market, his growth is going 5x as fast. Now, he is learning his mistake. If he wouldve cashed out his 401k instead of going IRA, he doesn't have to pay 30% in the future whem his portfolio will be much larger.

Now keep in mind, in rental units, you must ignore 'capital gain' as everything is for long term (traditional market trend shows that your house will gain 100% of its value every decade or so http://2.bp.blogspot.com/-xy8GnkXGKB...3-jan-2013.png). You can compare this part with stock market (dow jones was at 10000 in 2003 and now barely passed 16000 - 60% gain average).

Of course, most stock brokers/ daily traders love to argue that his picks are much higher than average. Hell, I used to do that during the mid 90s..until the crash and got schooled by a college friend when he showed me his 300 rental unit portfolio. Best part is, anyone with a descent credit can do the exact same. Those days of staring at 3 CRTs are long gone.. !

[ChunkyMonkey]

Insurance vs investment is the better comparison

[sellersm]

Again, I'd encourage you to look at PMs as currency, NOT investment. The rules for each are way different, and to confuse them will lead to undesirable results.

If you want to acquire some physical gold, it's a great time to buy!!

[Irving]

One of our mentors looks for crack/whore houses to buy because she gets them at great deals. She has eviction notices up on all the doors within 30 minutes of closing on the property. She bought a place once that was a 9-unit building, full occupancy, and only one tenant was paying rent!

Anyway, so far I've been able to do exactly what Chunky has been talking about, and it has been working out pretty well so far. I think the business will have made $12,000 in profit by the end of the year, and we acquired the property in June. We haven't taken any money out of the business yet, as we will be using it to purchase the next, better property. That's the plan anyway.