Investments 2016

Time once again to see how the "guns 'n' gold" investment strategy fared versus the stock market. Last time was here: <a href="http://www.yesterdaystractors.com/cgi-bin/viewit.cgi?bd=ttalk&th=1653890">http://www.yesterdaystractors.com/cgi-bin/viewit.cgi?bd=ttalk&th=1653890</a>

My benchmark for gun prices is the Bushmaster "Patrolman's Carbine" which in their current circular is on sale for $850. It was selling for $750 a little over a year ago (price shot up $100 between Christmas 2015 and January 2016), so that would put put prices up 13 percent.

The London fix for gold opened 2016 at $1082. It closed at $1146, for a gain of six percent.

The S&P 500 started 2016 at 2012 points and ended at 2239, for a gain of 11 percent. Add in the 2016 dividend yield paid on S&P 500 stocks of two percent and that gives a total stock market return of 13 percent.

So it would seem the stock market matched returns on guns and soundly beat gold.

The difference here, though, is that you're comparing the retail buying price of something against the actual cash value of something else. If you buy stocks or gold at one price and the price increases you can always sell them/it at the new higher price and turn a profit. However, if you buy something at retail price now you probably won't be able to sell it at a higher price later unless what you buy is something very special and you hang onto it long enough for a collector/investor market to develop. For many common, garden-variety firearms that are still in production this probably won't happen anytime soon if ever. And, you would need to keep it in new-in-the-box, unfired condition to have the best chance at a profit. There are exceptions, though. The nice condition Winchester 94 Trapper in 357 caliber I bought six or seven years ago is currently selling at on-line auctions for about double what I paid for it. But, had I put the same money into certain stocks back then the money would have increased a lot more. Either way it is a gamble. (The other side is that stocks are something you don't get "attached to" - I probably won't be selling my Winchester any time soon regardless of value because I like it too much!)

Gold is ONLY a good investment in a failing economy. Meaning your thinking the Monetary system is going to totally fail. The paper "returns" on the last ten years are just that, manufactured numbers to sell more gold. IF you look at longer term numbers like 50 or 75 years gold is always the trailing investment by wide margins.

I look at a wider spectrum like real estate, antiques, tractors, cars etc. Am not broke but very close!!!

There were some doom and gloom posts on here last year. People shouting sell out of the stock market before the crash.

You never hear from them later touting what a good decision they made.

We've got a local financial advisor that runs ad's continually bemoaning the recent fall in the stock market, and "what's a person to do?" "How can you avoid risk?" I guess they sucker people who never read the news, they have to pay for their ads somehow.

The best investment is diversification: a little gold, a little land, a few stocks, some guns and ammo, a few antiques (tractors and dishes), a little rental property and a lack of fear.

Cop stopped Mr. Jones. Mr. Jones informed him he had a concealed carry license. "Are you carrying today?" "Yes sir, a .22 in my pocket, 9mm in the console, .357 magnum in the glove box, two semi-automatic rifles in the trunk", "well, what are you afraid of, Mr. Jones?" "NOT A DAMN THING!"

Always good to hear the annual "apples to oranges" investment analysis. People (including me) buy stocks for their upside potential, in the hopes of making money. But I also have about 10% of my money in precious metals- not for its income potential as a "regular" investment, but to hedge against the possibility of a crash. Because in a financial crash, the value of stocks will plummet, but value of precious metals will soar, and you'll have them to use to buy stuff(if things go a step further South and the money system collapses). Of course, don't buy collectible coins, because they will also lose value in a crash- buy "junk" silver coins or common gold coins or bullion strictly on the basis of their metal content.

So the goals are different- I'll sell stocks and bonds when I can make money on them, then try to re-buy when they're low. But I have no intention of "playing the market" with precious metals- they're strictly a hedge. They'll be the last thing I liquidate, probably to raise money for the monthly cost of a nursing home when that time comes.

I'm also keeping less and less in the stock market (and more in money market) as I get older. Stocks do not go up forever, there are market "corrections" from time to them, such as the severe one in 2008. The problem now is my age- I'm too old to be able to wait 6 or 7 years for the stock market to regain its former level after a correction; Mrs. and I have worked hard for our money, and our main goal is now preserving what we have for our eventual retirement. I got mostly out of stocks about 3 years ago, when Dow was in the $17,000's. I got a little gas from my 30 year old investment advisor, so I asked him, "Do you want to be the one who tells my wife that all the money she put into our retirement accounts for the last 5 or 10 years is now gone?" Long silence, then "I'll execute that sell order first thing in the morning."

Should have bought any Colt revolver made such as the Anaconda, Python,King Cobra.The value they get for these is a lot.

That always sounds good on paper but what percentage of mutual funds do you actually think achieved 13% growth in 2016?. I hold stocks but I still want hard assets in my safe, JP Morgan was famously quoted, ''gold is money, everything else is credit'', I would think that his financial acuity is without question far superior to 99% of todays wall street hucksters.

Instead of strictly gold or guns or the market, I believe in the use of diversity in my investments. A little of gold and guns and market and mutual funds so if one is down another may make up for it. I don't rule out guns or gold same as I don't rule out the market, bonds and mutual funds. No harm if another chooses guns or gold that's his own decision and he may come out good some years but bad others. If anyone was smart enough to predict gold or guns or the market he would be a billionaire lol probably none here........

John T

i read these and wonder what the heck as none of us know what the next ten minutes will bring but do try to learn by example.We all have this and that that we plan to leave for the kids if we ourselves dont have to use its value for something in our later years.Hopefully with this new admin. we can get a little level on the markets and values for a period..Havent bought a new shovel to start burying it in the yard yet but I too wonder whats the best bet even with an advisor,Happy New Year

Maybe you should buy guns made of gold?

Someone mentioned once that in all of history gold has NEVER been worthless.

I can buy and sell a few old tractors and beat any of your investments without Having to worrying if someone is going to go belly up or steal your investment. All the experts were telling people to buy enron,worldcom,etc.Even at 13% not a lot left after taxes.

> Should have bought any Colt revolver made such as the Anaconda, Python,King Cobra.The value they get for these is a lot.

Eh, maybe not such a great investment as you might think.

In 1981 I bought a new 6" Python. With the factory Eliason sights, it was $475. Today I figure it's worth around 1500 bucks. So that's a gain of about 216 percent over 36 years, or an average of six percent per year. That's better than a poke in the eye, but over that same period the S&P was up 1543 percent (without factoring in dividends)! Had I put my $475 in the stock market, I could buy an entire collection of Colt revolvers today.

> what percentage of mutual funds do you actually think achieved 13% growth in 2016?

Well, in the case of S&P 500 index funds (which is what we're talking about), it would be 100 percent. Allowing, of course, for management fees, which are minimal in the case of index funds.

>I would think that his [J. P. Morgan's] financial acuity is without question far superior to 99% of todays wall street hucksters.

In this day and age, few tycoons have matched the record of Warren Buffet. Buffet is nine years into a ten-year bet that an S&P 500 index fund will out-perform a collection of actively-managed hedge funds. It looks like Warren will <a href="http://finance.yahoo.com/news/buffett-most-mportant-investment-lesson-211351601.html">easily win that bet</a>.

Check out some of the gun auction sites. There is a Colt Python 6" on gun broker right now bid up to
Current Price:
$2,725.00 (
The buy it now price is $4100.00

Over the long haul since the invention of the Federal Reserve Note in 1913,then in 1913 it took 20 Federal Reserve Notes to buy an ounce of Gold it now takes between 1100 and
1200 of them to buy an ounce of Gold so which one do think has held its value the best?Gold has been as they say "The Gold Standard" since the beginning of recorded history,along the
way ALL paper money has failed.Face value, Confederate money is worth far more than US Federal reserve Notes and CSA hasn't been a country since 1865.

Comrade Buffet has the nnalert surge to thank for bailing him out of his poor 2016 bets, his portfolio has recovered 11 billion since Nov. 8th, so much for his intelligence considering he heavily supported the loser.

Buffet has the Donalds stock market surge to thank for bailing him out of his poor 2016 bets, his portfolio has recovered 11 billion since Nov. 8th. The proof of this statement is indeed his bet on the S&P 500 as well as his support of H-er R-oyal C-onnivedness for POTUS, she would have crashed the extenstential market, bio's, tech, mining etc. and the S&P full of bankers, big oil and mega tech would have been licking their collective chops dreaming of the government bailouts and ''stimulous'' soon to be headed their way, minus kick-backs, of course. Another interesting fact about J.P. Morgan that no present day tycoon will ever equiponderate is his bailing out of the US government during the depression of 1893.

> Check out some of the gun auction sites. There is a Colt Python 6" on gun broker right now bid up to Current Price: $2,725.00 (The buy it now price is $4100.00)

Even if we make the unreasonable assumption that somebody is willing to pay four grand for my beloved Python, that just means its value has lagged the stock market by about 800 percentage points rather than 1300 points.

Now of course prices of Colt revolvers have shot up in recent years. But just like speculators in the Dutch Tulip Bubble of 1637 disovered, it's not a great idea to bet collectible prices will continue to rise when the thing being collected is not particularly rare or collectible. Anybody want to buy a Beanie Baby?