lilredrooster
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October 4th, 2023 at 4:06:03 AM permalink
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I see him on TV just about every day being pumped up by CNBC for his show and commentary and recommendations

I most definitely will not be going with the various strategies he touts

here are some interesting facts about him from Wiki:


"An August 20, 2007, article in Barron's stated that "his picks haven't beaten the market. Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%."[43] Cramer was criticized for repeatedly giving erroneous advice during the Financial crisis of 2007Ė2008. He recommended investing in Bear Stearns, Merrill Lynch, Morgan Stanley, Wachovia, and Lehman Brothers before the stocks fell in value significantly and several went out of business. On August 8, 2008, before the climax of the financial crisis of 2007-2008, Cramer recommended investing in bank stocks.

A February 9, 2009, article in The Wall Street Journal said that betting against Cramer's Buy recommendations using short-term options could yield 25% in a month.

A study by Wharton researchers Jonathan Hartley and Matthew Olson found that in the timeframe of August 2001 to March 2016, Cramer's charitable trust underperformed the S&P 500 primarily as a result of underexposure to market returns in years after the 2008 financial crisis. As of March 31, 2016, Cramer's trust since inception had a cumulative return of 64.5%, whereas the S&P 500 fewer dividends returned 70% during the same timeframe.

On the March 11, 2008, episode of Cramer's show Mad Money, a viewer submitted the question "Should I be worried about Bear Stearns in terms of liquidity and get my money out of there?" Cramer responded "No! No! No! Bear Stearns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear.

An article by author Michael Lewis for Bloomberg News said that TheStreet listed Bear Stearns as a "Buy" at $62 per share on March 11, 2008, which was the same day as the caller's question and a day before the collapse of Bear Stearns

On March 12, 2009, Cramer appeared on The Daily Show with Jon Stewart.[35] Stewart reiterated earlier claims regarding the CNBC host's "silly and/or embarrassing and/or stupid financial observations."[35] Moreover, he said CNBC shirked its journalistic duty by believing corporate lies rather than being an investigative "powerful tool of illumination".[76] Cramer disagreed with Stewart on a few points, but acknowledged that he could have done a better job foreseeing the economic collapse: "We all should have seen it more."

Stewart also said short-selling was detrimental to the markets and investors. Cramer agreed that short-selling was detrimental, stated his opposition to it, and said that he had never engaged in it. This contradicted earlier statements in which he described going short while managing a hedge fund. In a December 2006 interview from TheStreet's "Wall Street Confidential" webcast, Cramer said, "A lot of times when I was short at my hedge fund. ... When I was positioned shortómeaning I needed it downóI would create a level of activity beforehand that could drive the futures."[60] He said, "I will say this: I am trying to expose this stuff, exactly what you guys do, and I've been trying to get the regulators to look at it

However, Stewart played several video clips from 2006 where Cramer discussed the spreading of false rumors to drive down stock prices and encouraged short-selling by hedge funds as a means to generate returns.[78] At one point in a clip from December 22, 2006, he said, "I would encourage anyone in a hedge fund to do it." He called it a very quick way to make money and very satisfying. He continued, "By the way, no one else in the world would ever admit that, but I don't care, and again, I'm not gonna say it on TV."[35] Stewart responded, "I want the Jim Cramer on CNBC to protect me from that Jim Cramer."[35] Cramer again admitted that he could do better and that he should try to change. The interview ended when Stewart pointedly suggested: "Maybe we can remove the 'financial expert' and the 'In Cramer We Trust' and start getting back to fundamentals on the reporting, as well, and I can go back to making fart noises and funny faces." Cramer responded: "I think we make that deal right here".'



https://en.wikipedia.org/wiki/Jim_Cramer


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the foolish sayings of a rich man often pass for words of wisdom by the fools around him
AxelWolf
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October 4th, 2023 at 5:07:05 AM permalink
It's not easy to find now, however, I believe Cramer said FTX was a buy and that Sam B. F. Was the JP Morgan of our time.

I suggest someone interested do their own research because I I remember seeing that back a while ago after the FTX failure first came to light.

Since then, searching usually brings up stuff where Cramer is calling is a fraud.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
TigerWu
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October 4th, 2023 at 6:06:42 AM permalink
I don't really follow his antics too much but I know there is a "Jim Cramer inverse index fund" you can buy that basically invests in the exact opposite of everything he says. Supposedly it has a history of doing pretty well.
billryan
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October 4th, 2023 at 6:07:07 AM permalink
Jim Cramer is to financial advice as Bill Nye is to science, or EB is to roulette. Cramer spends an incredible amount of energy and works crazy hours. He's a publicity whore who presents well. He is on TV because better-qualified people can't be bothered.
Once again, I'll say this fascination with beating the Dow is not healthy or wise. It's also meaningless. Would you rather make 65% in an investment that shields you from some taxes or 75% and you owe full taxes on it? Are you aiming for growth or income? Are your investors millennials who can take chances or are they older folks who can't risk losing their nest eggs?
I could hand-pick some of my stock purchases to make me look like a financial genius and highlight a few that made me look like a fool. Am I up or down against the Dow? I honestly don't know and don't care. I know I had a number locked in that I wanted to be at when I turned 65, and I reached it three years early. Now, I can skate downhill the rest of my journey, as long as I don't do something foolish.
The difference between fiction and reality is that fiction is supposed to make sense.
billryan
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October 4th, 2023 at 6:14:30 AM permalink
Quote: AxelWolf

It's not easy to find now, however, I believe Cramer said FTX was a buy and that Sam B. F. Was the JP Morgan of our time.

I suggest someone interested do their own research because I I remember seeing that back a while ago after the FTX failure first came to light.

Since then, searching usually brings up stuff where Cramer is calling is a fraud.
link to original post



He's not a fraud; he won't take your money. He offers free advice and has supposedly introduced hundreds of thousands to investing.
Is he the best stock picker out there? No, but his free advice is worth every penny you pay. People who buy his picks make money. Perhaps not as much as they could investing elsewhere, but his picks aren't terrible and I've never heard anyone question his honesty.
To me, a fraud takes your money and gives back nothing. Kramer isn't a fraud. He's not as good as he claims, but I don't know many who are better.
The difference between fiction and reality is that fiction is supposed to make sense.
unJon
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October 4th, 2023 at 7:20:37 AM permalink
Wait, billryan whatís wrong with Bill Nye? Donít crush my childhood.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
TigerWu
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October 4th, 2023 at 7:30:13 AM permalink
Quote: unJon

Wait, billryan whatís wrong with Bill Nye? Donít crush my childhood.
link to original post



He is apparently a gigantic a-hole behind the scenes. There are countless stories on the internet of his being a total jerk to people.
billryan
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October 4th, 2023 at 7:45:25 AM permalink
Quote: unJon

Wait, billryan whatís wrong with Bill Nye? Donít crush my childhood.
link to original post



Nothing wrong with him. He's a mechanical engineer who combined his love of science and comedy to create a show. I've never seen it.
As I understand it, his scientific background wasn't so strong and may have been overstated. There were a lot more qualified scientists they could have found but his mix of knowledge and presentation won the job.
I apologize for lumping him in with phony roulette experts. I'm just saying that because people get TV shows, it doesn't mean they are experts or leaders in the field. Most multi-millionaires don't want to leave their houses in the middle of the night to be in a television studio pre-dawn for twenty-plus years.
Kramers's show would be boring if he simply told people to hold on to the stocks he recommended yesterday or last week. He needs to find good stocks for the show every day, and sometimes that's almost impossible.
The difference between fiction and reality is that fiction is supposed to make sense.
billryan
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October 4th, 2023 at 7:48:33 AM permalink
Quote: TigerWu

Quote: unJon

Wait, billryan whatís wrong with Bill Nye? Donít crush my childhood.
link to original post



He is apparently a gigantic a-hole behind the scenes. There are countless stories on the internet of his being a total jerk to people.
link to original post



I didn't know that. I know little about him, but I had two friends who worked for Bell Labs who disparaged his scientific credentials.
The difference between fiction and reality is that fiction is supposed to make sense.
lilredrooster
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October 4th, 2023 at 8:16:36 AM permalink
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I believe there are very, very few stock pickers who will in the long run beat a buy and hold strategy with the S&P 500 - which is offered via mutual fund

especially considering the tax advantages of buy and hold if you cash out when the capital gain is a long term gain instead of a short term gain if and when you do need cash

but it's just too boring a strategy for many who crave action -

so for those who don't care that their performance could be easily beaten, touts may actually have value - since most average Joes would probably do worse if they made their own picks

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the foolish sayings of a rich man often pass for words of wisdom by the fools around him
billryan
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October 4th, 2023 at 9:01:26 AM permalink
Quote: lilredrooster

.
I believe there are very, very few stock pickers who will in the long run beat a buy and hold strategy with the S&P 500 - which is offered via mutual fund

especially considering the tax advantages of buy and hold if you cash out when the capital gain is a long term gain instead of a short term gain if and when you do need cash

but it's just too boring a strategy for many who crave action -

so for those who don't care that their performance could be easily beaten, touts may actually have value - since most average Joes would probably do worse if they made their own picks

.
link to original post



About 85% of my portfolio is tax-deferred, and will be taxed once if I withdraw it. Most of my dividends are the same.
You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund. Are you investing for retirement? For a house? For your kid's education? Are you 25 with a bright future or 57 in a dead-end job? How does your state treat retirement income? Are you planning on spending down your money or looking to build a legacy? Is the one mutual fund the right answer in all of those? In any of those?
The difference between fiction and reality is that fiction is supposed to make sense.
unJon
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October 4th, 2023 at 9:21:07 AM permalink
Quote: lilredrooster

.
I believe there are very, very few stock pickers who will in the long run beat a buy and hold strategy with the S&P 500 - which is offered via mutual fund

especially considering the tax advantages of buy and hold if you cash out when the capital gain is a long term gain instead of a short term gain if and when you do need cash

but it's just too boring a strategy for many who crave action -

so for those who don't care that their performance could be easily beaten, touts may actually have value - since most average Joes would probably do worse if they made their own picks

.
link to original post



Ironically, one of the experts that consistently beat the market returns was Ed Thorp.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
lilredrooster
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October 4th, 2023 at 9:35:14 AM permalink
Quote: unJon


Ironically, one of the experts that consistently beat the market returns was Ed Thorp.


Ed Thorp was a true genius.

There are very few whose talents and abilities can match his

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the foolish sayings of a rich man often pass for words of wisdom by the fools around him
Tanko
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October 4th, 2023 at 11:16:01 AM permalink
Quote: AxelWolf

It's not easy to find now, however, I believe Cramer said FTX was a buy and that Sam B. F. Was the JP Morgan of our time.



Anthony Scaramucci called Bankman-Fried the new J.P. Morgan. With reference to Morgan's attempt to bail out failing banks and the stock market with his own capital.
lilredrooster
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October 4th, 2023 at 2:09:54 PM permalink
Quote: billryan



You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund.


no, I'm not aware of that
as long as you are willing to accept the increased risk of stock market investing compared to that bank CDs, savings accounts or bonds
if you have 100K to invest and you want to double it in 2 years for whatever reason you can choose an issue with a greater risk/reward profile
but that doesn't mean that you will actually achieve this goal
neither does the S&P 500 index fund
but it has been proven many times to outperform so many other strategies
there's never a guarantee when you accept the greater risk that stock market investing demands
but it is the best choice for so many in so many situations
so very many who have tried to beat it have actually underperformed it - and paid a much higher % to Uncle Sam in taxes - and many - including so called superstars like Cramer have underperformed it badly
in stock market investing you cannot avoid risk but you can control it to some extent
there is what is basically a law - if you want to realize a greater gain - you must accept greater risk - there's no getting around that fact
you see investing as very complex and cannot accept simplicity as a good option
I disagree

it's not my only investment but I wouldn't be very unhappy if it was
I too am taking a flyer with some high risk stuff- can't resist the temptation
but it's a relatively small % of my portfolio
and I don't consider myself to be very wise to have done this - just adventurous -


long term cap gains in this issue often means zero in Federal taxes - this is not the case for an active trader


from the article:



"The long-term capital gains tax rate is 0%, 15% or 20%, depending on your taxable income and filing status."


https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates#:~:text=What%20is%20long%2Dterm%20capital,taxable%20income%20and%20filing%20status.


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the foolish sayings of a rich man often pass for words of wisdom by the fools around him
Ace2
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October 4th, 2023 at 3:08:34 PM permalink
Quote: billryan



You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund.

Actually, it is

If no fund can ever beat the S&P long term, why invest in anything but SPY?
Itís all about making that GTA
billryan
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October 4th, 2023 at 3:14:05 PM permalink
Quote: Ace2

Quote: billryan



You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund.

Actually, it is

If no fund can ever beat the S&P long term, why invest in anything but SPY?
link to original post



Okay. I suppose there is nothing wrong with keeping all your eggs in one basket. I think I learned a different lesson in first grade.
The difference between fiction and reality is that fiction is supposed to make sense.
unJon
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October 4th, 2023 at 3:22:54 PM permalink
Quote: Ace2

Quote: billryan



You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund.

Actually, it is

If no fund can ever beat the S&P long term, why invest in anything but SPY?
link to original post



Itís a time horizon issue and/or risk aversion issue for the most part with a recognition that dollars do not equal utiles.

Pretty simple really if losing 10% of your portfolio makes your life (or utility function) worse than gaining 10% on your portfolio makes it better.

Rational theory is based on the idea that rational actors act as if they are maximizing their expected utility.

Check out Paul Samuelsonís criticisms of the Kelly Criterion as applied to investing if you are interested in diving into the topic.

I say all this as someone 100% invested in equities and for the most part the vanguard low cost ETF thatís similar to SPY. Though I also have an account that does a tax harvesting strategy that mimics SPY to a degree also, but outperforms in volatile markets if you are able to utilize capital losses.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
Ace2
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October 4th, 2023 at 3:29:50 PM permalink
Quote: billryan

Quote: Ace2

Quote: billryan



You are entitled to your opinions, but you must be aware investing isn't as simple as putting money in one fund.

Actually, it is

If no fund can ever beat the S&P long term, why invest in anything but SPY?
link to original post



Okay. I suppose there is nothing wrong with keeping all your eggs in one basket. I think I learned a different lesson in first grade.
link to original post

Silliest thing Iíve read in a long time. You obviously donít know what SPY is

SPY is about the broadest, most diverse investment available. With the 500 largest companies represented, you are essentially investing in the overall US/Global economy

It is the exact opposite of ďputting all your eggs in one basketĒ, and this actually does sound like something you learned in first grade.

Have you ever wondered why the S&P 500 is the benchmark most funds compare themselves too?
Last edited by: Ace2 on Oct 4, 2023
Itís all about making that GTA
billryan
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October 4th, 2023 at 3:58:40 PM permalink
You are investing 100% of your money in the stock market. If you think that is diversity, so be it. Owning one fund that tracks the SP is not diversity. Owning ten stocks that track the S&P is not diversity. Owning every stock in the S&P isn't diversity, although it certainly should be in a diverse portfolio.
If you think SPY is the most diverse investment you can make, you are mistaken. If you think stocks are all there is to investing, stick all your money in SPY. You'll do well.
The difference between fiction and reality is that fiction is supposed to make sense.
Zcore13
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October 4th, 2023 at 4:06:13 PM permalink
Same as gambling systems. Those that can, do. Those that can't, teach.


ZCore13
I am an employee of a Casino. Former Table Games Director,, current Pit Supervisor. All the personal opinions I post are my own and do not represent the opinions of the Casino or Tribe that I work for.
billryan
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October 4th, 2023 at 4:10:55 PM permalink
Quote: Zcore13

Same as gambling systems. Those that can, do. Those that can't, teach.


ZCore13
link to original post



Most Wall St. workers are in the beginning of their careers and about 80% will wash out. In some firms, it is higher. If you don't have a few million to invest, your " broker" won't be very experienced.
The difference between fiction and reality is that fiction is supposed to make sense.
Ace2
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October 4th, 2023 at 4:27:29 PM permalink
Quote: billryan

You are investing 100% of your money in the stock market. If you think that is diversity, so be it. Owning one fund that tracks the SP is not diversity. Owning ten stocks that track the S&P is not diversity. Owning every stock in the S&P isn't diversity, although it certainly should be in a diverse portfolio.
If you think SPY is the most diverse investment you can make, you are mistaken. If you think stocks are all there is to investing, stick all your money in SPY. You'll do well.
link to original post

I never recommended putting100% of your money in anything. Except for very young people who wonít be touching the money for decades

Owing a slice of the SP is very diverse

So letís hear it. What are the other investment types that have outperformed the stock market over the long run? Gold isnít an investment. Most people should have some money in something like a CD/money market, especially now that you can get 5%, but thatís not an investment either. Real estate can be an investment but thereís an area where you need to be very well diversified and RE returns canít touch the stock market
Itís all about making that GTA
billryan
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October 4th, 2023 at 4:51:04 PM permalink
Quote: Ace2

Quote: billryan

You are investing 100% of your money in the stock market. If you think that is diversity, so be it. Owning one fund that tracks the SP is not diversity. Owning ten stocks that track the S&P is not diversity. Owning every stock in the S&P isn't diversity, although it certainly should be in a diverse portfolio.
If you think SPY is the most diverse investment you can make, you are mistaken. If you think stocks are all there is to investing, stick all your money in SPY. You'll do well.
link to original post

I never recommended putting100% of your money in anything. Except for very young people who wonít be touching the money for decades

Owing a slice of the SP is very diverse

So letís hear it. What are the other investment types that have outperformed the stock market over the long run? Gold isnít an investment. Most people should have some money in something like a CD/money market, especially now that you can get 5%, but thatís not an investment either. Real estate can be an investment but thereís an area where you need to be very well diversified and RE returns canít touch the stock market
link to original post



Commercial real estate, gold and silver, collectibles, art, rare weapons, must I go on?
Gold can be a hedge, or it can be an investment. I buy gold and silver when it is low, $1800,/$16AU and sell at 2000/$22AU.
A lot of investments are cyclical. Commercial real estate was white hot. Now it's cooled down. Todays investors are very different than their fathers and grandfathers. They don't have a lot of faith in Wall Street. That creates options.
The difference between fiction and reality is that fiction is supposed to make sense.
AxelWolf
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October 4th, 2023 at 5:12:16 PM permalink
Quote: billryan

Quote: Ace2

Quote: billryan

You are investing 100% of your money in the stock market. If you think that is diversity, so be it. Owning one fund that tracks the SP is not diversity. Owning ten stocks that track the S&P is not diversity. Owning every stock in the S&P isn't diversity, although it certainly should be in a diverse portfolio.
If you think SPY is the most diverse investment you can make, you are mistaken. If you think stocks are all there is to investing, stick all your money in SPY. You'll do well.
link to original post

I never recommended putting100% of your money in anything. Except for very young people who wonít be touching the money for decades

Owing a slice of the SP is very diverse

So letís hear it. What are the other investment types that have outperformed the stock market over the long run? Gold isnít an investment. Most people should have some money in something like a CD/money market, especially now that you can get 5%, but thatís not an investment either. Real estate can be an investment but thereís an area where you need to be very well diversified and RE returns canít touch the stock market
link to original post



Commercial real estate, gold and silver, collectibles, art, rare weapons, must I go on?
Gold can be a hedge, or it can be an investment. I buy gold and silver when it is low, $1800,/$16AU and sell at 2000/$22AU.
A lot of investments are cyclical. Commercial real estate was white hot. Now it's cooled down. Todays investors are very different than their fathers and grandfathers. They don't have a lot of faith in Wall Street. That creates options.
link to original post

buy siver at 16 sell at 22. When was the last time you could buy at 16 and then sold at 22?

That sounds like a much longer investment than having your money locked up for a year on a +EV sports/ election bet.
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
billryan
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October 4th, 2023 at 5:45:49 PM permalink
Not at all. Sometimes it is the same day. There isn't a lot of competition for gold and silver in Bisbee. People take less than they'd get in Tucson because they don't want to do the four-hour round trip. I sell enough to get better prices than someone walking in off the street.

Sometimes I'll buy silver Navajo-type bracelets for the price of silver, but sell at a nice premium for the craftsmanship.
The difference between fiction and reality is that fiction is supposed to make sense.
Ace2
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October 4th, 2023 at 5:47:12 PM permalink
Gold, silver, collectibles, art and weapons donít produce anything and will never grow. Calling them ďassetsĒ is inaccurate because actual assets produce future income and are valued accordingly. Calling them ďinvestmentsĒí is absurd

They are, at best, historical stores of value that should always be worth something. And that something might be worth a fraction of what you paid. For instance, look at gold price in year 2000 vs 1980. Even today, gold is worth less than its 1980 price adjusted for inflation. Meanwhile, the S&P today is 40 times its 1980 value!
Itís all about making that GTA
billryan
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October 4th, 2023 at 7:18:05 PM permalink
So, if someone owns a US Marine Flamethrower, with documentation it was used in battle and that sold for $120,000, you don't consider it an asset. How about original art from Erte or Dali? Peter Max? Gold was under $400 until recent years and keeps breaking $2,000 these days, so buying low and selling high is pretty simple. Multiple sports cards have numerous sales of $500,000 or more, as do rare Pokemon cards- but none of those are assets in your opinion.
Is bitcoin an asset?
The difference between fiction and reality is that fiction is supposed to make sense.
Ace2
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October 4th, 2023 at 7:39:43 PM permalink
What are the values of those items based on, other than hype?

They generate nothing and are simply worth what the next sucker will pay for them. There is no way to forecast future value and definitely no way to know if some sucker is going to pay a more obscene amount of money than you paid for a flamethrower, baseball card or kilo of gold.

Incidentally, does anyone else see grown men paying thousands for baseball cards as beyond weird ?!
Itís all about making that GTA
AxelWolf
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October 4th, 2023 at 7:46:18 PM permalink
Quote: billryan

Not at all. Sometimes it is the same day. There isn't a lot of competition for gold and silver in Bisbee. People take less than they'd get in Tucson because they don't want to do the four-hour round trip. I sell enough to get better prices than someone walking in off the street.

Sometimes I'll buy silver Navajo-type bracelets for the price of silver, but sell at a nice premium for the craftsmanship.
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But now you are talking about a unique unicorn business situation, that's not really investing like we were discussing. If we are going to talk about that stuff...That's a terrible investment Bill, why not invest in an AP opportunity that returns 300% to 400% over 2-5 days with almost no risk?
♪♪Now you swear and kick and beg us That you're not a gamblin' man Then you find you're back in Vegas With a handle in your hand♪♪ Your black cards can make you money So you hide them when you're able In the land of casinos and money You must put them on the table♪♪ You go back Jack do it again roulette wheels turinin' 'round and 'round♪♪ You go back Jack do it again♪♪
unJon
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October 4th, 2023 at 7:55:35 PM permalink
Quote: Ace2

What are the values of those items based on, other than hype?
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(Truncated)

Scarcity. Econ 101 why diamonds cost more than water despite one being nothing by sparkly hype and one being necessary for life.

As the great economist once said: ďSuccessful investing is anticipating the anticipations of others.Ē
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
billryan
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October 4th, 2023 at 8:11:45 PM permalink
Gold was under $1100 in 2016, so most short-term investors have done well. The artificial high gold and silver hit in 1980 resulted from fraud and mostly hurt speculators who couldn't flip when the scheme crashed. Junk silver is getting scarce as such much has been melted .
The difference between fiction and reality is that fiction is supposed to make sense.
Ace2
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October 4th, 2023 at 8:18:50 PM permalink
Quote: unJon

Quote: Ace2

What are the values of those items based on, other than hype?
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(Truncated)

Scarcity. Econ 101 why diamonds cost more than water despite one being nothing by sparkly hype and one being necessary for life.

As the great economist once said: ďSuccessful investing is anticipating the anticipations of others.Ē
link to original post

Iíve read that all the gold in the world could fit in a large barn and all the platinum in the world could fit in a railcar. So what. Until prices rise to a point that much more of it is mined, supply goes up and prices go down. I assume itís a similar scenario for diamonds

Oil. another commodity (not an asset), goes through similar cycles. But at least oil is used for something other than jewelry and storage at Fort Knox
Itís all about making that GTA
unJon
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October 4th, 2023 at 8:27:59 PM permalink
Quote: Ace2

Quote: unJon

Quote: Ace2

What are the values of those items based on, other than hype?
link to original post



(Truncated)

Scarcity. Econ 101 why diamonds cost more than water despite one being nothing by sparkly hype and one being necessary for life.

As the great economist once said: ďSuccessful investing is anticipating the anticipations of others.Ē
link to original post

Iíve read that all the gold in the world could fit in a large barn and all the platinum in the world could fit in a railcar. So what. Until prices rise to a point that much more of it is mined, supply goes up and prices go down. I assume itís a similar scenario for diamonds

Oil. another commodity (not an asset), goes through similar cycles. But at least oil is used for something other than jewelry and storage at Fort Knox
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Same as any asset class. How much does the price of widgets need to rise before more firms enter the market increasing the supply of widgets? What are the barriers to entry? How hard is it to mine a marginal ounce of platinum? What will it take to break the De Beers cartel?

These questions are as relevant to art as company equity.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
lilredrooster
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October 5th, 2023 at 2:19:46 AM permalink
.
re taxation of collectibles - much higher long term capital gain taxation rate than stock market investments


from the article:


"Investing in collectibles can be personally rewarding. As the owner of a historical or rare item, it's emotionally satisfying to own a collectible item. But investing in collectibles can also lead to significant returns. Due to the nature of the collectible industry and Internal Revenue Service (IRS) regulations, collectibles are often assessed with heavy fees and taxes. In fact, they're taxed at a maximum rate of 28%.

Note that the rate on collectibles is considerably higher than the tax rate on most long-term capital gains, which is an average of 15% for most taxpayers, according to the IRS."


my comment - if income is low because the investor is older and not working, the long term capital gain taxation rate on stock market investments will often be ZERO




https://www.investopedia.com/articles/personal-finance/061715/how-are-collectibles-taxed.asp#:~:text=Due%20to%20the%20nature%20of,into%20how%20collectibles%20are%20taxed.

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the foolish sayings of a rich man often pass for words of wisdom by the fools around him
TigerWu
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October 5th, 2023 at 6:27:55 AM permalink
billryan's investing advice is worthless to the average person. If you don't want to speculate and try to time the market and invest in commodities and meme stocks, you'll be perfectly fine sticking all of your money in a broad market index fund and a bond fund. Maybe an international fund, too. That's plenty diversified. Three funds max and you can retire a millionaire. If you want to play Gordon Gekko with your money, that's fine, too, but it's a waste of time unless you're really into it.
billryan
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October 5th, 2023 at 6:38:23 AM permalink
Quote: lilredrooster

.
re taxation of collectibles - much higher long term capital gain taxation rate than stock market investments


from the article:


"Investing in collectibles can be personally rewarding. As the owner of a historical or rare item, it's emotionally satisfying to own a collectible item. But investing in collectibles can also lead to significant returns. Due to the nature of the collectible industry and Internal Revenue Service (IRS) regulations, collectibles are often assessed with heavy fees and taxes. In fact, they're taxed at a maximum rate of 28%.

Note that the rate on collectibles is considerably higher than the tax rate on most long-term capital gains, which is an average of 15% for most taxpayers, according to the IRS."


my comment - if income is low because the investor is older and not working, the long term capital gain taxation rate on stock market investments will often be ZERO




https://www.investopedia.com/articles/personal-finance/061715/how-are-collectibles-taxed.asp#:~:text=Due%20to%20the%20nature%20of,into%20how%20collectibles%20are%20taxed.

.
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That is very misunderstood. I'm not sure I can explain it properly, but I'll try.

An individual who buys a painting for $1,000, keeps it a year and sells it for $100,000 will owe 28% in taxes on his profit.
A business that buys X for a dollar and sells it for $100,000 will pay its regular tax rate on anything they sell. It doesn't matter if it a widget, a collectible or a commodity.
If you sell it within a year, you pay your regular rate.
Do you follow?
I am a one man business. I pay taxes on my business profits, not on the sale of collectibles. In many cases, I'm just an agent who helps an owner find a buyer, and my fee is taxed as regular income.
The rules get complicated, so there are " free ports" all around the country. For collectibles, your tax situation can come down to if you hung the art in your home and enjoyed it, or if it was permanently "in transit" in one of the "free ports".
The IRS doesn't like people dealing with collectibles as it is harder for them to follow the money. Thus they put up more obstacles that chase away the more timid. People hear 28% tax rate and assume it makes for a bad deal.
The difference between fiction and reality is that fiction is supposed to make sense.
TigerWu
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October 5th, 2023 at 6:54:52 AM permalink
I watched a documentary on free ports not too long ago.... what a scam those things are! LOL I can't believe they're legal.
billryan
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October 5th, 2023 at 7:27:26 AM permalink
Quote: TigerWu

I watched a documentary on free ports not too long ago.... what a scam those things are! LOL I can't believe they're legal.
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I don't disagree, but they exist and if you can legally reduce your tax burden by using them, why wouldn't you?
The difference between fiction and reality is that fiction is supposed to make sense.
lilredrooster
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October 5th, 2023 at 7:51:05 AM permalink
Quote: TigerWu

billryan's investing advice is worthless to the average person. If you don't want to speculate and try to time the market and invest in commodities and meme stocks, you'll be perfectly fine sticking all of your money in a broad market index fund and a bond fund. Maybe an international fund, too. That's plenty diversified. Three funds max and you can retire a millionaire. If you want to play Gordon Gekko with your money, that's fine, too, but it's a waste of time unless you're really into it.
link to original post


I basically agree with what you have posted

if your sole goal is to accumulate as much as possible in your lifetime then I think you're correct

and since you posted "the average person" you are 100% correct in that regard

but for many, particularly the very well off - they are gaming the various markets

it's a form of entertainment to them just as gambling is to many of us

for a very well off person it might be the difference between ending his life with $20 million or with $15 million

something that many in that position might not care about too much if they were well entertained while accumulating $ 15 million

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Last edited by: lilredrooster on Oct 5, 2023
the foolish sayings of a rich man often pass for words of wisdom by the fools around him
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