Say What?

"Civilized people don't buy gold"
Say what?

According to this article Warren Buffet's partner Charlie Munger recently declared
"Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939," the Berkshire vice chairman said, "but I think civilized people don’t buy gold, they invest in productive businesses."

Well, in a perfect world I agree with the billionaire.
In a perfect world investing in businesses that employ people and create wealth is a good thing.
But I don't live in a perfect world, do you?

Munger lives in a billionaire's utopia where his wealth is so vast that a little inflation here or there will have zero effect on his life.
And worse, Munger and Buffett have sheltered their assets from inheritance and other taxes by funding family foundations, and then proposed raising taxes on the rest of us.

In my world inflation exists and the value of the dollar is decreasing.
Tax rates matter.
I'm not endorsing an asset allocation that would make Midas proud
but it doesn't hurt to diversify your portfolio and own a smidgen of gold.

Golden Years

Got Gold?
I hope that you do as it reached $1500 today.

and here's the 5 year chart

Meanwhile here's the 5 year chart for the Dow Jones Index

You know...I just thought that I would mention it.
And just for your viewing pleasure...

Estate Jewelry As An Asset Class?

The stock market is tanking, AAA bonds are becoming junk, real estate is a mess and cash is paying nothing. So...where do you invest?

Quality Estate Jewelry perhaps?

Don't take my word for it.
Here's financial journalist Conseulo Mack and jewelry investor Patrizia di Carrobio on the subject.

Savvy Shopping - Got Gold?

This year you've seen the both the stock market and the housing market collapse and you're wondering if it is even safe to keep your money in T-Bills with the Federal Deficit at stratospheric heights.
But let's face it...you can't keep it all in your mattress.

OK, I gave up giving investment advice long ago but I'm still always interested knowing what works in a bear market.
And so is the Wall Street Journal.

What You Need to Know About Gold
By JEFF D. OPDYKE

Gold shined in 2008. Could 2009 be as bright?
Of all the major assets -- stocks, corporate bonds, cash and others -- gold was one of last year's few standouts. While so many investments collapsed amid the turmoil, the price of an ounce of gold posted a gain of about 4.3%.

So far this year, the rare metal is up about 0.7%, after a rally Friday put it back in positive territory. And longer-term concerns are emerging that aggressive, untested government policies aimed at righting the flailing economy could ultimately fuel a further rise in gold prices.

So why does gold work for now?

The case for gold is this: The government is pumping trillions of dollars into bailouts and stimulus plans, a purposefully inflationary policy aimed at reversing current deflationary pressures. If inflation results, or if the dollar weakens as the supply of dollars necessarily increases under the stimulus plans, gold is a likely winner because it hedges against inflation and fiat currencies.

But not everyone agrees

The opposing view: "The inflation argument hasn't been seen yet in government data, and once the economy catches gear, the [Federal Reserve] will pull the money back out of the economy," negating any inflationary pressures, says Tom Pawlicki, a precious-metals analyst at MF Global, who says he's "not friendly on gold."

This article lists four investment strategies with both the pros and cons

Bullion
Pooled Accounts
Exchange Traded Funds
Mining Stocks


I'd like to offer you another option

An investment you can wear.

Antique Edwardian Gold Fringe Style Necklace in 18K $2280

(yes...less than an "It" bag and it will last another 100 years and more)

Vintage Woven Gold Bracelet in Yellow and Rose Gold $2850

And from today's Financial Times

Gold pushes above $900 in buying spree

Strong investor buying on Monday pushed the price of gold above $900 a troy ounce, hitting a 3½-month high in dollar terms and posting all-time highs in euro and sterling, in a stark sign of money seeking refuge from equities and bond markets.

You know where to shop

Hedgefund Hypocrisy or Madoff's Maneuvers

You know that I just want to post about shopping for the holidays but one again we're dealing with Wall Street Fraud which continues to be a target rich environment.

Bernard Madoff arrested over alleged $50 billion fraud

So now we have the former head of Nasdaq....NASDAQ!!!

accused of running an investment Ponzi Scheme and racking up 50 billion dollars in losses.

50 billion dollars...seriously....this is getting close to being some real money!

On the good side...after being caught with his hand in the honey jar he's manly enough to step up and admit his culpability.

"There is no innocent explanation," Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he "paid investors with money that wasn't there," according to the complaint.

The $50 billion allegedly lost would make the hedge fund one of the biggest frauds in history.

While I'm all for limiting the downside risk....his particular strategy for doing this might not be what you or I would do.

The fund told investors it followed a "split strike conversion" strategy, which entailed owning stock and buying and selling options to limit downside risk, said the investor, who requested anonymity.
Jon Najarian, an acquaintance of Madoff who has traded options for decades, said "Many of us questioned how that strategy could generate those kinds of returns so consistently."

This is the part of the story that I really love.

Madoff remains a member of Nasdaq OMX Group Inc's nominating committee, and his firm is a market maker for about 350 Nasdaq stocks, including Apple, EBay and Dell, according to the website.

The website also states that Madoff himself has "a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."

Oh it's just so good to know that Madoff had high ethical standards.