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  1. Gold Miner Picks

    Royalty and streaming companies are the safest, though they are not cheap. Franco Nevada, Wheaton Precious Metals, Royal Gold and Sandstorm fall into this category. Established producers are next safe, e.g. Newmont, Barrick, Goldcorp, Agnico Eagle, Randgold, Yamana. Companies at the development stage are more risky, and explorers more risky still. Funds such as GDXJ or SGDJ are a way to spread the risk on these. This is not investment advice.
  2. Gold Miner Picks

    I still own some miners, but I'm struggling to justify adding to them at the moment. I'd like to see them start to move up first. I have some Hummingbird (HUM.LON) Highland (HGM.LON) Leagold (LMC.TSE) First Majestic (FR.TSE) and Sabina (SBB.TSE) as well as a core holding in the Sprott funds SGDM and SGDJ.
  3. The point of asking investment questions is not to discover which investments have performed well historically, but to enquire what we have good reason to believe will do well in future. For the last 100 years or so, economic growth has only averaged about 2.5% per annum in the developed world, and interest rates about 6%. So if any indexed investment has outperformed those numbers it is because it is employing leverage. Stocks have clearly outperformed 2.5% per annum in the last 100 years, but this is because stocks are a leveraged play on economic growth. If economic growth does not continue, stocks are capable of underperforming just as well as they have outperformed in the past. Economic growth is driven fundamentally by improvements in productivity, and the biggest drivers in productivity during the 20th century came from learning how to exploit oil, and learning how to exploit computers. There is no more increased productivity to be had from oil, and we don't know whether computers have much more to offer. The advent of social networking has coincided with a reduction in productivity, which suggests that it is more of a time-waster than an aid to productivity. Some commentators claim that artificial intelligence will increase productivity substantially, but we don't know yet. I've been hearing that promise for many years. On the flip side, debt acts as a drag on economic growth and the quantity of government, municipal, corporate and household debt has increased hugely in recent years. This means there is less reason to believe in high levels of future economic growth, and hence less reason to believe that stocks will continue to perform well.
  4. 10% aggregate annual return on an investment is highly optimistic. Just because it has worked out for stocks over the last 20 years does not give me any confidence that it will continue to do so. Few funds, even leveraged hedge funds, achieve this. Pension funds are allowed to assume 7.5% annual return and part of the reason so many are severely underfunded is because they are not achieving that rate. When you invest money in a conventional vehicle such as stocks or bonds, you are hoping for two main sources of return: the first is interest, the second is growth. The interest rate that you might currently get on safe investments ranges from 0% for Japanese or Swiss govt bonds, through 1.75% for US bonds, to maybe 4-5% for some high yielding equities. If you are getting higher rates than that, you are in junk bond territory, or are investing in stocks in companies that are effectively liquidating themselves through dividend payments. When it comes to growth, the prospects for higher return may seem better, but GDP growth is sluggish in the developed world: less than 3%. So with interest rates below 3% and economic growth rates below 3%, how is it possible to achieve returns above 3%? If you are an extraordinarily successful stock picker you might be able to beat the average, but an index fund cannot beat the average: it *is* the average. For a higher return, either you are taking a lot more risk then you think, or your investments are using leverage. If you buy stocks expecting better growth than the average rate of growth of the economy as a whole then you are effectively making a leveraged play on economic growth. You can expect your stocks to outperform on the way up and underperform on the way down. Stocks and bonds have both done extremely well in the last 10 years, but I am willing to attribute much of this to QE. Under QE, the central banks create money and buy bonds, which drives the price of bonds up. Investors like to balance their portfolios, so when their bonds go up a lot, they sell some and buy stocks and real estate. So the newly created money washes over into stocks and real estate and creates a bubble. The bubble could get even bigger, if central banks create even more money or reduce interest rates, but currently all the talk is about rate rises and quantitative tightening. On the whole, I would rather invest cautiously in the current environment. Hold stocks by all means, but have plenty of safe haven assets as well, such as precious metals. (This is not investment advice.)
  5. Gold / Silver Ratio

    Taking a pairs trade long silver/short gold will not win irrespective of where the prices go. I can think of several scenarios under which it would lose. The worst is probably the Jim Rickards scenario of an overnight revaluation of gold in order to back a new currency. This might take gold to $10,000 per Toz while making little difference to silver. Silver is primarily an industrial metal and is not guaranteed to follow gold around if there is a large move. More generally, speaking of probabilities of price moves is naive. Probabilities can only be assessed relative to some model. The price of a commodity is not the result of some roll of a dice, but of a combination of factors including current supply and demand, future expectations of supply and demand, economic growth, inflation, interest rates, geopolitical events and investor sentiment. The complexity of the interplay of these factors is such that we can have little confidence that just because they have aligned in the past to stop the GSR rising above 80, they will continue to do so. Especially when we have only three data points and no ability to intervene in order to perform controlled experiments.
  6. Gold / Silver Ratio

    For myself, I doubt whether the GSR has any predictive value. Silver tends to correlate with gold, but is more volatile. So, when both go up, silver goes up more and the GSR goes down; when both go down, silver goes down more and the GSR goes up. Notice how the bottoms in the graph are in 1980 and 2011 - when both metals were peaking. But the GSR is not predictive: it is just telling you how prices stand at present. There is no fundamental reason why the GSR cannot rise and keep rising above previous highs. Gold and silver are not fully substitutable and they have different supply and demand characteristics, so there is no fundamental or causal reason why they should trade in a particular ratio.
  7. How do you safely store your stack?

    Safes vary enormously as to how secure they are and what they are designed to protect against. Some safes are only designed to protect against a casual thief who might be burgling your house and wants to get out within minutes without fuss. Others will resist attacks from all but the most expert crackers, and some will even resist experienced crackers. You get what you pay for. If you want to store paper documents in the safe you need a fireproof one, and they are usually rated according to how many minutes of protection they give. You probably need 30 minutes. If you want to protect electronic devices such as USB storage drives, these are even more vulnerable than paper. Many safes are officially graded by insurance companies as to how much insurance cover you can get with them. If you already have house contents insurance in place, you might want to check with the insurance company what makes and models of safe they recognise and choose one with an appropriate value. That said, you might prefer not to tell your insurance company at all: after all, do you trust all their employees? The fewer people who know, the better. After a quick look at some UK websites, this one seems particularly good at providing information about the properties of its safes: (this is not a recommendation) http://www.safeoptions.co.uk/ Alternatives to safes include various kinds of fake containers, e.g. electric wall sockets, cans, books, etc., although these are so common they probably won't fool a thief. You could also try creating an empty space, e.g. by adding a false bottom to a cupboard, preferably nailing it down after filling it. If you are worried about metal detectors, you might try getting some old metal piping and installing it near some existing pipes and placing coins in there.
  8. By various standards stocks look pricey and merit a correction, especially tech stocks. The questions remain: Will governments respond by cutting interest rates and printing more money? If so, will it be enough to overcome market sentiment? If not, where will investors park their money? Cryptos are still in free fall from a speculative bubble. Bonds prices have been falling, though this could reverse. Gold and cash are looking sensible at the moment. Gold stocks are an unknown: they will be pulled in both directions. Maybe a pairs trade would work with long gold stock fund / short S&P or short Nasdaq.
  9. I have heard several commentators recently say that soft commodities and particularly grains are looking bullish. Grains have certainly fallen a lot in recent years, but I don't know enough about them to understand in detail what drives the price. With the metals, many analysts are bullish about battery metals (nickel, cobalt, lithium) and copper, because these will be needed in much greater quantity if we are to have more electric cars and more sources of renewable energy. A few analysts are also bullish about uranium, on the basis that for many years its price has been below the cost of production and this is unsustainable. China and Japan are still committed to nuclear energy, but it is more difficult to predict the appetite for it in the west.
  10. You probably want something more diverse than just S&P 500. At the moment, a lot of institutional money is in emerging markets. Bridgewater, for example, has a substantial part of their funds in emerging markets, and they have a strong track record. Also, you don't want to be 100% in stocks. Some cash and some gold are a good idea.
  11. Commentators I follow disagree about the chances of a crash this year. On the positive side: The economies of most developed countries are showing some signs of growth. QE has inflated bond and stock prices, so traditional measures of value may be misleading. Stocks are still being inflated by buy-backs: the recent change to corporation tax in the USA will continue this. The capital markets are much more strongly influenced by the central banks than they used to be; there is a greater probability of intervention to prevent a fall. Investors can still get dividend yields of 4% and more from some stocks, so they are not expensive unless the dividends are unsustainable. On the negative side: Bear markets tend to occur roughly every 7 to 10 years and we are coming up to 10 years since the last one. By traditional measures, such as CAPE and Dow/gold, stocks are very expensive. Governments, corporations and households have a serious debt problem and if the debt continues to grow it will drive up interest rates which will be negative for bonds, and possibly stocks as well. The USA may start a new war, with Iran or North Korea, which might cause a panic sell-off.
  12. From what I understand, this happened because the card issuer, WaveCrest, broke Visa's rules and so Visa ordered them to withdraw all their cards. Unfortunately for Bitpay, their non-US customer cards are issued by WaveCrest, so this hit them. They will have to find another card provider. Bitpay in the USA was unaffected.
  13. What will happen to gold if we go digital

    DIgital currency doesn't of itself create a problem for owning gold. The problem is that all the arguments that are being made for banning cash - that it is used for money laundering, drug dealing, tax fraud, terrorism, etc. - are also arguments for banning ownership of gold, and for that matter cryptocurrencies as well. If you own a few gold coins and you have purchase receipts, you should still be able to trade them, but if you have larger amounts you might be better off holding them offshore, e.g. in Switzerland or Singapore.
  14. Need help/advice with gold from USA

    Investment gold is not subject to VAT in the UK. Silver, platinum, or other metals are subject to the usual 20% VAT. According to the UK government website, a gold coin is exempt from VAT if it was minted after 1800, is legal tender in its country of origin, is of at least 900/1000 purity, and is not more than 180% of the value of the gold it contains. All of these are true of the American buffalo. Link: https://www.gov.uk/government/publications/vat-notice-70121-gold/vat-notice-70121-gold
  15. Free movement of capital within the EU does not override anti-money laundering considerations. An individual or business can move money within the EU, but if there is a suspicion that the money is illegal, it can still be subject to confiscation. And the UK is going along with this, so even if the UK does leave the EU, it won't matter. Already in the UK if you try to pay or withdraw £10,000 in cash from your bank, your bank will report it as a potentially suspicious transaction to the tax authorities. They may even refuse to give you that much cash: try it and see. The latest updates to the anti-money laundering regulations in the UK require banks and brokers to hold much more information about their customers in order to confirm who they are and what the source of their money is. If you have a brokerage account in the UK you have probably already been contacted recently about updating your information. What I am identifying here is a trend. It used to be that if you didn't break the law, the authorities left you alone. Now you can have your cash confiscated if you can't prove that you obtained it legally. Gold and cryptos will be next. Governments will require crypto exchanges to register customers in their real names, perform ID checks and disclose those identities to the tax authorities. I predict it won't be long before governments require their citizens to make an annual disclosure of the value of all their assets, including gold and cryptos. If the existing cryptos prove too difficult to regulate effectively, governments will introduce their own controlled cryptos and ban the 'rogue' ones.