Provided by Michael Taylor of the Houston Chronicle:
A significant portion of the Financial Infotainment Industrial Complex dedicates itself to selling you gold, as an investment.
I’m here to tell you: Resist.
I have already written about the three other horsemen of your personal financial apocalypse: variable annuities, time shares and bitcoin.
The commonality of these four horsemen is that they are sold to credible people as “investments” when they are really the opposite of investments. All four act as a drain on your net worth.
Gold fails the fundamental test of what constitutes an actual investment…
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Gold and other precious metals are often seen as an alternative investment class, with similar standing to shares and property. It may be another asset, but I think it’s one of the worst for long-term growth.
Albert Einstein once described compound interest as the eighth wonder of the world, he who understands it earns it, he who doesn’t pays it. It’s a fantastic quote and it’s the reason why shares are the best to own in the long-term.
The key thing to remember with compound interest is that the asset produces profit and that profit can be reinvested into producing more profit.
Gold is a beautiful material, it has attracted people throughout the centuries. However, ultimately, it is just a shiny material. It doesn’t generate any profit, dividends or rent. It can’t compound if it can’t generate any money… Read Full Article
“How to make a million? Start with $2 million – and invest in gold stocks!” – The Maxims of Wall Street (revised for gold bugs).
What is by far the most dangerous and high-risk sector of the market? Gold stocks!
Recently, I spoke at a gold bug convention, and after my talk, I was surrounded by several doctors, lawyers and other professionals who confessed that they had lost 70% of their portfolios.
“How is that possible?” I asked. “The stock market is at an all-time high!”
“We listened to the doom-and-gloom talks from speakers at this conference five years ago,” they admitted. “We sold out of the stock market and bought mining companies promoted here at this conference.” … Read Full Article
Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?
One highly respected Harvard economist is stating an emphatic “yes!”.
“While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise” says Harvard economist Harry Dent in his latest report. “I’ve never been more certain of anything in over 30 years of economic forecasting.” Read Full Article
GOLD prices have plunged in recent weeks as fears of a Donald Trump or Brexit market shock continue to fade.
The precious metal is considered a safe haven, where investors put cash in times of high uncertainty and turmoil.
But market concerns over Britain’s exit from the European Union (EU) and the new US president have calmed since last year.
As a result, gold prices have fallen to $1,226, from jumps above $1,300 last summer and in November.
Experts say rising US interest rates and a strong American dollar are set to push gold value down further in the coming months… Read Full Article
Behavioral finance points to $1,050 gold price
Frankfurt-based Sentix, a leader in the emerging field of behavioral finance, has been compiling sentiment indices since 2001 by surveying more than 4,500 institutional and private investors.
The latest reading of the Sentix index of economic expectations spells trouble for the gold price.
Capital Economics, a London-based researcher, in a research note points to this graph to provide support for its prediction that the gold price would be trading at $1,050 an ounce by the end of the year… Read Full Article
$6.6-million gold mining scam nets four-year jail terms
Two conmen who touted a Tanzanian gold mining stock now face prison time and restitution orders, the Ontario Securities Commission announced December 20. William Wallace and Robert Heward were each sentenced to four years and ordered to pay back $6.67 million to approximately 105 people who invested in Londoni Gold Corp. The pair were convicted of fraud, illegal distribution and unregistered trading. The last two charges brought concurrent 18-month sentences… Read Full Article
Mining Scam Warning Signs and Red Flags:
- Claims that the mining can only be done using new, “proprietary” methods. While its true advancements in mining have been and continue to be made; new, proprietary methods don’t usually yield much, if anything at all.
- Drilling has begun, yet is slow going as only one or two drills are in use. When significant, legitimate deposits are found, mining companies usually put as much equipment on the suspected deposit as possible. It’s important to get the permits and mine as much as you can as quickly as you can. Experienced miners know that actual, cost effective production, along with reserves for future mining will result in reasonable stock prices.
- Metals from the platinum group (Platinum, Palladium, Ruthenium, Osmium and Iridium) are said to be showing up in the assays. These metals are particularly rare and don’t usually exist in commercial quantities.
- Even though the company claims it’s done little to no drilling, suspected deposits or “reserves” are described in the millions or even tens of millions of ounces. Before reserves of this size can be confirmed with any degree of confidence, hundreds of drill holes with thousands of assays must be completed first.
- Actual drilling is ongoing but is slow with one or two drill rigs. If a major new ore deposit is suspected by a legitimate company, there is significant incentive to get the drilling done as soon as possible so mine permitting and actual mining can begin. They will use as many drill rigs as they can get their hands on. The primary incentive is to produce gold, not sell more stock at a higher price. Legitimate operators know that real, cost effective gold production, together with ore reserves for future mining will result in satisfactory stock prices.
Is Marlin Gold Mining Ltd’s (TSXV:MLN) Balance Sheet A Threat To Its Future?
Marlin Gold Mining Ltd (TSXV:MLN) is a small-cap-stock with a market capitalization of USD $88 Million. While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. There are always disruptions which destabilize and many a times end an existing industry, and most small-cap companies are the first casualties when such a wave hits.
Apart from geopolitical events such as political unrest and natural calamities, a company which is suddenly facing a hostile market environment must be able to fulfill short-term commitments with its reserves so that it can see another day… Read Full Article
Investors can’t resist the lure of striking it rich and that mentality is a goldmine for scammers. Preying on investors’ fever for treasure they make money on worthless gold, oil, diamond and iron ore claims. Modern technology makes it easier for investors to guard against being cheated – but it still happens every day.
The colorful vocabulary of mining investment fraud – pump and dump, boiler rooms, stooges – has been associated with fleecing investors at least since the creation of the modern stock market. Frauds themselves have been around as long as people have been digging holes in the ground… Read Full Article