Market Curiosity: Exploring Markets And Systems

March 17, 2011

Just a quick note – look how well PCH is holding up…

Filed under: Just Watching — Tags: , , — Jeff Fitzmyers @ 11:07 pm

Oh, and since this happened to be close by… Paper Marks / One gold Mark. Note the log scale.

+ Timber: An Excellent Retirement Vehicle
+ “You Need to Consider This Crisis-Proof Investment”
+ PCH – selling far out of the money puts

March 8, 2011

US Mint needs help finding stuff worth-less than nothing. Good luck.

Filed under: Editorials — Tags: — Jeff Fitzmyers @ 1:34 pm

Edit: I was hasty in hitting the publish button. There are a number of issues with historical coins.
Bimeatalism — trying to peg gold to silver is unworkable.
– The best units to denominate coins are mass. It’s politically neutral. Gov’s don’t like that though because they don’t get seniorage: $300 million in the 2010 fiscal year.

The best possible thing is to have the gov stay out of the money business altogether because they almost always debase it. It is unsaid, b the US Mint’s request is probably due to the cost of making coins.

For the fiscal year ending, September 30, 2010, the unit cost for the cent was 1.79 cents and the cost of the nickel was 9.22 cents.

Another way of saying this is so much value has been stolen from American’s from the hidden tax of inflation, that the gov has to re-denominate the currency so they can continue stealing.

But, … you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.” – Sir Josiah Stamp, Director of the Bank of England (appointed 1928) and reputed to be the 2nd wealthiest man in England at that time.

End edit.

United States Mint Seeks Public Comment on Factors to be Considered in Research and Evaluation of Potential New Metallic Coinage Materials

The United States Mint is not soliciting suggestions or recommendations on specific metallic coinage materials, and any such suggestions or recommendations will not be considered at this time.

Why would that be? 🙂

The United States Mint seeks public comment only on the factors to be considered in the research and evaluation of potential new metallic coinage materials.

Dear US Mint,

Please consider the following factors:
+ The effect on people’s confidence with the coins.
+ The constitution.
+ The intent of the founding fathers.
+ The usefulness of a sound currency in reigning in those wanting to abuse America’s wealth.
+ Use what works historically.

A 1909-1982 Cent is worth $0.0285.
A 1946-2011 Nickel is worth $0.07.
Yes people are taking these out of circulation because the fed (not federal, nor reserve, only debt) keeps devaluing the federal reserve notes.

Good luck trying to find something worth-less than nothing. And why are you enabling debasement?

All the best, [Marketcuriosity]

March 9: Numismatic News: Mint wants suggestions, or does it?

February 2, 2011

Nickels worth 4.5 cents, opps 6.6 cents, opps 7.2 cents. Up 9% in less than a month.

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 10:56 pm

A January 10th post almost implored: Strongly consider buying nickels — currently worth 6.6 cents

Seriously. 100 “dollars” of nickels is currently worth 144 “dollars” of metal. This isn’t hyperinflation, but we are getting closer.

Feb 3: How Much is a Nickel Worth? More than Five Cents, Says Michael Lewis (VIDEO):

On ‘The Colbert Report’ (Weeknights, 11:30PM ET on Comedy Central) Stephen Colbert quizzed financial journalist Michael Lewis about what he thinks the next big investment opportunity might be.

“Nickels is what you want to buy, nickels,” Lewis explained.

“One of these characters, who made his fortune betting on the collapse of the system has started to buy nickels, ” Lewis continued. “The metal content of the nickels is now worth seven cents. If you melted it down, you’d get seven cents.”

According to Lewis, this mystery investor was able to get hold of 20 million nickels, which he keeps in a Brinks storage facility.

Feb 19: Keep tabs via Coinflation’s current melt value of coins.

Updated August 9 2012:
Original older post: Strongly consider saving nickels — currently worth 6.6 cents

January 18, 2011

Important chart from James Turk: Proof fed printing = rising stocks

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 4:56 am

From James Turk’s Hyperinflation Watch

The chart does not mean prices can’t go down, just that they likely won’t stay down for long. It also means Don’t Short Shares. (Ahemm..) A beautiful chart!

December 12, 2010

I was incorrect to assume stocks would lose purchasing power in a hyperinflation

Filed under: Just Watching — Tags: — Jeff Fitzmyers @ 5:33 am

After skimming 10 Reasons To Shun Stocks…, from a contrarian point of view I would want to be super long stocks. Many of the numbers cited don’t necessarily mean anything one way or another to the main thesis: A crooked Wall Street is not news. Company insiders tend to profit more than outsiders — of course — they know more about the company than anyone else. Thus there are systems to shadow insiders. Asserting the market “will lose another 20% of your money by 2020” so you should be out seems to be unfounded speculation.

And the unfounded speculation was although the average participant would likely not keep up their purchasing power, they might do better than just cash in a bank. Apparently incorrect:

John Paul Koning wrote

The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world [2007], the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. This jump in share prices is far in excess of increases in consumer prices. While the country is crumbling, the Zimbabwean share speculator is keeping up much better than the typical Zimbabwean on the street.

Update 1, February 8 2013:
+ Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46%

December 5, 2010

Timber: An Excellent Retirement Vehicle (update 3, Oct 23)

Filed under: Editorials, Favorite Posts, Short Puts — Tags: , , — Jeff Fitzmyers @ 12:26 am

Assuming markets exist and patience, the apogee retirement vehicle is:

The #1 Investment of the Iron Chancellor The 50 years in Germany following [Bismarck’s] death featured hyperinflation, depression, war and defeat. Timberland held its value better than any other investment… Most people don’t know that timber beat all major asset classes over the last 30 years.

You Need to Consider This Crisis-Proof Investment Timberland is a crisis-proof investment because the growth of the trees does not move in step with economic cycles. You don’t have to harvest when demand is soft. Let them grow, bigger trees equal more dollars.
+ Growing scarcity of quality of timberlands.
+ Global demand should increase.
+ Growing institutional interest in timberland.

The Ideal Investment to Own, Based on History Timber, for example, has a history of high, stock-like returns with low, bond-like volatility. Using the same time period in the table, timber had a compound annual return of 11.8%, with risk (annual volatility) of only 7.9% – for a Sharpe Ratio of 0.96. That is hard to beat…

People keep wondering where to put value if there is a big appreciation in silver and gold prices: timber (PCH, PCL, maybe WY, maybe RYN).

What does the “helpful” MSM thinks of timber as of August 2009? Timber prices could be vulnerable to a decline of as much as 50% in coming years… “The reality is the underlying cash flow is highly dependent on cyclical industries like housing, paper and newspapers…” What happened in the 2 years since publishing? The break even point could have declined to $19/share. In 3 more years the beak even point could decline to $13/share — SmartMoney’s 50%. So even if PCH did drop 50% in 5 years, the overall value was flat, and it’s still chugging out dividends and income from selling options. So far the risk was very little and the reward might have been 40%.

A very safe and profitable way to buy timber shares: Sell puts on down drafts to enter and sell calls on spikes higher. Number from early 2010.

PCH ($30/share) $2/share dividends = 6% gain / year.

Add selling options conservatively 5 times per year for about $40 contract = another 5% per year.

Starting with 100 shares and reinvesting dividends and option sales at 11% per year:
5 years on : possibly 150 shares worth maybe $4,500 generating $500 in dividends and option sales per year.
10 years on: possibly 250 shares worth maybe $7,600 generating $840 per year.
20 years on: possibly 720 shares worth maybe $21,000 generating $2,300 per year.

Say you add $3,000 per year:
5 years: possibly 620 shares worth maybe $18,000 generating $2,000 per year.
10 years: possibly 1,670 shares worth maybe $50,000 generating $5,500 per year.
20 years: possibly 6,400 shares worth maybe $190,000 generating $21,000 per year.

Starting out with $100,000:
5 years: possibly 5,000 shares worth maybe $150,000 generating $12,000 per year.
10 years: possibly 8,500 shares worth maybe $150,000 generating $28,000 per year.
20 years: possibly 24,200 shares worth maybe $725,000 generating $79,000 per year.

Update June 2012: The Most Accurate Investment Forecast Ever “Grantham … predicts that managed timber will be the best-performing asset class, followed by emerging-market stocks.”

Update 3, October 2012:
+ A Safe Land Investment That Can Protect You from the Dollar Crisis

Update 4, January 2015
One of the Best ‘Hard Assets’ to Own in 2015

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