tag:blogger.com,1999:blog-18065245.post2791674966696626355..comments2024-01-04T05:22:47.328-07:00Comments on mndrix: Investment Principlesmndrixhttp://www.blogger.com/profile/00943372190551332722noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-18065245.post-22744132195500770562012-02-13T08:12:06.210-07:002012-02-13T08:12:06.210-07:00@IrishTreeMan Thank you for the well-considered c...@IrishTreeMan Thank you for the well-considered comments. You offer a good reminder about Buffett's great statement on greed. That certainly plays into my considerations, so I should incorporate it into the article somehow. I completely agree with you that a loss avoided is essentially the same as a gain. That's one reason I like gold.<br /><br />All the USD, EUR and CHF accounts I've seen have a negative yield after accounting for inflation. USD is roughly -3.5% annually and EUR/CHF are roughly -2% annualy. As long as the costs of gold ownership are better than inflation-adjusted yields, gold is a good choice.<br /><br />Incidentally, the costs of owning gold can be quite low. Using a gold ETF such as IAU, the annual expenses are 0.25% and it costs just a few dollars to buy or sell. IAU is also very liquid.<br /><br />I don't know how it is in Ireland, but in the US, owning physical gold is fairly inexpensive too. It costs roughly 2% above spot to buy (similar to sell). Assuming you already have a safe or safe deposit box for personal valuables, the marginal storage cost is 0. It might take a couple more days to convert physical gold into dollars, but it's still quite liquid.<br /><br />Based on the historical data I've seen, if USD/EUR/CHF accounts have positive real yields, the bond market also has good yields and I'd put my money into bonds instead of cash anyway.<br /><br />Thanks again for your comments.mndrixhttps://www.blogger.com/profile/00943372190551332722noreply@blogger.comtag:blogger.com,1999:blog-18065245.post-54101963134282764772012-02-11T15:05:05.005-07:002012-02-11T15:05:05.005-07:00Another principle you might add to your list, woul...Another principle you might add to your list, would be Warren Buffets dictum "Be fearful when others are greedy, and be greedy when others are fearful".<br /><br />When market sentiment is overwhelmingly negative, it is often a good time to deploy your cash savings. For example buying Bitcoin after it went below $3 towards $2 has paid off for me and others.<br /><br />Ive also profited from being fearful when others are greedy. Not getting into the irish house price bubble, when everyone else was, has saved me hundreds of thousands. For me a loss avoided is mathematically the same as a gain.IrishTreeManhttps://www.blogger.com/profile/10089769986607566706noreply@blogger.comtag:blogger.com,1999:blog-18065245.post-80252177871192183122012-02-11T14:56:18.907-07:002012-02-11T14:56:18.907-07:00I agree very much with your five principles, excep...I agree very much with your five principles, except for number 5, "Gold is the best cash".<br /><br />Gold costs money to hold. 6% fee to buy, 6% fee to sell, plus fees for delivery and grading, storage, security etc. Gold isnt easily verifiable, and is not liquid like cash.<br /><br />A euro savings account is a good way to hold cash, it pays interest unlike the USD, has no fees to hold, and is very liquid. The negative sentiment is overdone, especially in the USA. The political commitment to the euro in europe, is not understood in America. The euro is not going away.IrishTreeManhttps://www.blogger.com/profile/10089769986607566706noreply@blogger.com