Your Questions About Invest In Gold Stock

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John asks…

Stock market game. any good stocks to buy in a short period of time?

Stock market game. any good stocks to buy in a short period of time?
ok were playing this stock market game in economics and i was wondering what are some good stock to invest in. you start off with $100,000. you have to buy at least 100 shares. if there are any goods stock that you will think will shoot up with in the next 3 weeks. so far we have bought apple and gold stocks, so if you have any good ideas let me know thanks. i have 3 weeks to beat my class mates 😀 thanks for the help 😀
its virtual money and should i what strategy should i use? should i buy long term or high risk stocks? should i wake up early to buy?
i also have to diversified my stocks buy some different kinds but i still want to be on top
its 15 dollars commision every time i buy a stock and stocks has to be more than 1$

Justin answers:

1. Apple. Fast growing, expanding into China. Also, look up how much their stores earn per square foot of space in the store, and compare this to other stores. Apple is making a huge profit.
2. Netflix. New technology, pretty much has a monopoly on it.
3. Baidu. Internet search engine, based in China. Adding many new users each day. Google can’t compete because Baidu is local, has a larger market share of the Chinese market, and Google has qualms about privacy issues regarding users that Baidu does not have.
4. Salesforce.com. Cloud computing. New technology, has largest share of that market.
5. Bank of America. Stock price has been depressed, large amount of recent insider trading, they are now integrating with their Merrill Lynch acquisition and expanding their investment and brokerage services, which may bring in more clients.

If you don’t like these, then pick an MLP (Master Limited Partnership). Examples are Kinder Morgan Energy (KMP) and Enterprise Partners (EPD). They own transportation services (like oil or gas pipelines) and make their money by signing contracts with energy companies to transport their oil, or gas, or whatever. The money they earn depends upon the contract that was signed, not on how much stuff was transported or what the cost of oil or gas is. So their share prices stay fairly steady, but they pay out whatever they make in profit (it’s how MLPs work) to the shareholders. If you pick one of them, you stand a good chance of making some money on them by the end of the semester because their prices usually don’t change much, and all you have to do is wait for the dividend. (Of course, their share price can go down, but it is usually fairly stable.)

Richard asks…

Would it be wise for people to invest some of their money in gold now instead of it all in stock?

Justin answers:

Gold is doing great in the market. But you will need a lot of money like $5000 to get into the market place. Also you will pay a lot of fees for a broker to handle your particular situation. So you may not make as much as you think. Most deals deal in the $100k and up and make small margins. Try going into a precious metals and minerals mutual fund. Minimum investment is about $3000. I think USAA has one.

Ken asks…

Stock market game. any good stocks to buy in a short period of time?

ok were playing this stock market game in economics and i was wondering what are some good stock to invest in. you start off with $100,000. you have to buy at least 100 shares. if there are any goods stock that you will think will shoot up with in the next 3 weeks. so far we have bought apple and gold stocks, so if you have any good ideas let me know thanks. i have 3 weeks to beat my class mates 😀 thanks for the help 😀
its virtual money and should i what strategy should i use? should i buy long term or high risk stocks? should i wake up early to buy?
i also have to diversified my stocks buy some different kinds but i still want to be on top
i think its 5 dollars commision or 3 every time i buy a stock

Justin answers:

You have to remember that cash is an investment too.

How many people lamented not having any money to take advantage of the bargain prices after the price collapse in 2008? Yet people like Warren Buffet were able to immediately scoop up bargains left and right, how is it that if they are such great investors that they had uninvested money to purchase stocks with. Well, that’s because they also invested in cash and were just rebalancing their portfolios to bring the percentage of cash back to where their targets were.

At MIT, Claude Shannon once gave a lecture where he mathematically proved that if you kept half your portfolio in cash, the other half in a stock, and when the stocks went up, you sold stocks to return to the 50/50 position and when it went down, you bought stocks to return to the 50/50 position that you would always make money unless the stock just disappeared. The consequence was that you bought low and sold high.

As to the exact proportion of cash to stocks? Well an optimal proportion can be calculated by taking the first derivative of the log utility of wealth to maximize that utility. It’s an engineering equation called the Kelly Criterion and was postulated at Bell Labs by John Kelly based upon Claude Shannon’s Information Theory equations. The equations are used to optimize data transmissions such as over the Internet. However, the equation is a simplification to a binary outcome and requires an estimate of probabilities and net profit. Suffice it to say that there is a proportion of the portfolio that should be kept as cash for optimal growth and that it’s better to have more cash then less.

Many people would equate bonds to cash so they would just keep a fixed portion of their portfolio in bonds.

The next three weeks takes us into October, a fairly volatile time of the year for the stock market. If the game doesn’t involve commission costs (it would be unfair to do so in such a short time frame) then I would just keep 60% in a S&P 500 ETF fund to leverage the index instead of trying to pick individual companies and put the remaining 40% in either cash or bonds then I would rebalance daily, buying or selling to return to the 60/40 position. You may want to keep the 40% as 20% cash and 20% bonds. If you want to be aggressive, increase the 60% perhaps to 70% or 80% but keep in mind that then you’re exposing yourself to downturns in the market and October tends to be the month that downturns occur.

David asks…

Is there anyone that would like to help in my stock virtual game for my class?

would someone like to help ill give you my account and you can sell and buy stocks for me its for a class. Kinda like a broker but i dont have money to pay for free 😀

Stock market game. any good stocks to buy in a short period of time?
ok were playing this stock market game in economics and i was wondering what are some good stock to invest in. you start off with $100,000. you have to buy at least 100 shares. if there are any goods stock that you will think will shoot up with in the next 3 weeks. so far we have bought apple and gold stocks, so if you have any good ideas let me know thanks. i have 3 weeks to beat my class mates 😀 thanks for the help 😀
its virtual money and should i what strategy should i use? should i buy long term or high risk stocks? should i wake up early to buy?
i also have to diversified my stocks buy some different kinds but i still want to be on top
its 15 dollars commision every time i buy a stock and stocks has to be more than 1$

Justin answers:

The way I have always won these games is to just go bananas. Buy a bunch of risky volatile crap.

Here’s a couple names:
BIDU
SOHU
MOS
SLV

You will either hit a homerun or fail spectacularly. Either way it will be fun.

Robert asks…

Why don’t more people invest in GOLD and other precious metals?

The stock market is going to crash in the near future and will leave many Americans in the poor house.

Justin answers:

I’m sorry, but Rick B and Rolande de Haye are the typical posters that haven’t got the first clue what they’re talking about. First of all Rick B, do you know what the average real rate of return on the Dow has been since 1924? A lousy 1.64% per year. Let that sink in, a measley 1.64% average inflation adjusted return over the last 83 years. And if you had a clue, you’d know that to compare stocks to gold prior to 1971 was useless as gold prices were fixed at $35 per ounce. So then, how can you accurately compare one investment (stocks) that are allowed to trade and grow against an investment (gold) that wasn’t? You can’t.

Then you’ve got Rolande’s typical answer that I hear so many times from the largely clueless populace – gold has been a lousy investment for the last 25 years. Of course it was, gold was in a 22 year secular bear market. But, answer me this Rolande, what were stocks doing for the 16 years from 1966 to 1982 genius? During that 16 year period, stocks were in a brutal bear market – the Dow went sideways for 16 years and was actually down 22% when it ended in August 1982. Yet from 1971 when Nixon closed the gold window to 1980, gold rocketed from $35/oz. To $850/oz. – a return of 2,329%.

Look at that again Rick & Rolande, The Dow was DOWN 22% and gold was UP 2,329% – so which investment had a better return.

And what you amateurs fail to realize is that every asset class has it’s bull and bear cycles and you need to go where the money is being made. Yes, from 1980 to 2002, gold was in a very brutal bear market and stocks were the place to be, but now gold is the place to be. I can prove it:

In 2000 the stock market topped at 11722. As of July 19, 2007 the Dow hit 14,000 for a return of 19.43%. From the 2002 bottom at 7198 to the top at 14,000 in July the Dow was up 94.5%. Now, let’s take a look at gold during that same time. In 2000, gold was trading at $280 per oz. It’s currently trading at $671 per oz. – a return of 140%. Gold bottomed in 2002 at $250 per oz. And with it currently trading at $671 per oz. That’s a return of 168.4%.

From the beginning of the stock bull market in Aug. 1982 at Dow 772 to the top of 14,000, stocks are up 1,713.5% over a period of 25 years, yet in golds previous bull market it returned 2,329% in just 9 years.

So let’s break it down:

Stocks: from 1982 to July 2007, up 1,713.5% in 25 years, up 19.43% from 2000 to July 2007 and up 94.5% from 2002 to July 2007.

Gold: from 1971 to 1980, up 2,329% in 9 years, up 140% from 2000 to July 2007, up 168.4% from 2002 to July 2007.

So genius, which one has been producing better returns during their bull cycles?

And Rolande, if prices go up inflation will erode golds value? Gold is a hedge against inflation genius. In 1963 the median home price in the United States was about $18,000 and the average car was about $5000. So, with gold fixed (at that time) at $35/oz, it would have taken 515 oz. Of gold to buy a house and 143 oz. Of gold to buy a car. Today, the median house price in the US is $246,000 and the average car is about $29,000. With gold trading at $671 per oz. It would take 367 oz. Of gold to buy a house and 44 oz. Of gold to buy a car. After 44 years of inflation and it takes less gold today to buy a car and house than it did 44 years ago, so how then is inflation eroding the price of gold?

Like so many of the other amateurs, you fail to take into consideration the previous bear market in stocks and the previous bull market in gold. The average person has about 30-35 years in their investing lifetime, so you need to go where the money is being made. Yes, from 1982 to 2000 stock was the place to be, but from 1971 to 1980, gold was the place to be. That’s what distinguishes the amateurs, novices and neophytes from the pros. Pros don’t get married to an asset class, they go where the money is being made. It’s the novices that get so attached to an asset class that they miss out on the money being made elsewhere when the asset their married to is getting it’s behind spanked.

True, gold doesn’t earn income, but answer me this, how many stocks listed on the exchanges pay a dividend?

Fedup, you are correct. Look for the stock market to rally for the next 1-2 weeks and then turn down and experience a very violent sell off in October to around 11,000. Then, look for prices to stabilize and probably rally through late 2007/early 2008, but then turn again and continue down. Look for this bear market to last till at least 2017 to possibly 2022/24 and the Dow bottoming in the 1,000 point range, possibly in the 700 point range. The initial effects of this bear market won’t be felt till probably 2009 and look for a banking crisis, record breaking bankruptcies, rampant unemployment and poverty. This economic collapse is going to make the Great Depression look like a picnic in comparison. If this results in a deflationary cycle, gold will probably suffer, but if they hyperinflate, look for gold to break above $2,000 per oz.

Rick and Rolande are obviously amateurs and only tell half the story (which is what the amateurs always do). They tell you about the poor returns of gold for the past 25 years, but fail to tell you about the 2300% return in the previous bull market. They tout the superiority of stocks, but fail to tell you that for 16 years, stocks went nowhere and actually declined 22% in value.

Guys, if your going to do analysis like this, at least do your homework.

The reason most people don’t invest in gold, silver and the PGM’s is because they’re clueless. They have no clue as to secular market cycles, they talk to some wall street whiz kid that never traded through a single bear market and automatically label them as reliable. Any moron or trained monkey can make money during a raging stock bull market, but let’s see how these geniuses do when they have to trade a full blown bear market.

I wish people like Rick and Rolande wouldn’t answer questions like this when they don’t have the first clue what they’re talking about.

George asks…

How do I invest gold stocks?

Does anyone know how to invest gold stocks?

Justin answers:

Try NWGC.PK, a junior gold company from Peru with real revenue and real earnings and a PE of about 33, yet it trades at only about $0.10 per share. Market cap is at less the $6 million. Other junior gold companies in that price class are often 1-man companies which have neither any operations (useless leases, yes) or revenues at all and are running in the red. Here is the Yahoo Finance info:

http://finance.yahoo.com/q;_ylt=Al4rR_Aw…

Thomas asks…

How do you invest into oil?

I would like to invest into oil, but i dont know how to. Can someone help? Is it like investing into Stocks or Gold? Stocks has its own symbols, dose oil too? Or am i suppose to buy oil like I do with Gold?

Justin answers:

Exxon-Mobil = Symbol XOM. Go to http://www.exxonmobil.com/Corporate/InvestorInfo/Corp_II_ShareholderInvestProg.asp and it will give you the link on how to buy Exxon stock directly from the company. You have to start with $250 or $50 a month through automatic withdrawals, but you can add to it with no fees! If you want to learn how to do this, read “How to Buy Stocks Without a Broker.” It seems to go up 20% a year or more. Good luck.

Charles asks…

What are the good ways to invest in gold ?

My banker friends tell me I should invest in gold as they are likely to go higher.

Please tell me where I can get good material to read on gold investment without a broker pushing me.

Justin answers:

I also think that gold has further to go. Have been investing in gold for the past 20 years and it has far out performed my other stocks and mutual funds.

I saw a book recently called Gold Vault and I think it is really a good book for anyone interested to invest in gold. Very comprehensive and touches on many aspects that are useful.

It also discusses the various ways to invest in gold.

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