I've been learning about investing and stocks this year.

Right now, I'm halfway through Antifragile by Nassim Taleb. It's a great book and presents many interesting concepts. It made me start to ponder how an antifragile portfolio would look.

And, not gonna lie, reading the Yellen article on RoK has got me pretty scared about the money I've already put into stocks.

I know there are some market-savvy individuals here. How are you hedging against a crash? Is there an antifragile way to invest in today's market?

(11-24-2013 06:20 AM)DarianFrey Wrote:  I've been learning about investing and stocks this year.

Right now, I'm halfway through Antifragile by Nassim Taleb. It's a great book and presents many interesting concepts. It made me start to ponder how an antifragile portfolio would look.

And, not gonna lie, reading the Yellen article on RoK has got me pretty scared about the money I've already put into stocks.

I know there are some market-savvy individuals here. How are you hedging against a crash? Is there an antifragile way to invest in today's market?

It is impossible to predict market crashes.

I am not hedging at all, but have been slowly raising cash by selling off stocks that were "overvalued".

A good quote I saw today : "Until you realize taking a beating is a normal part of long-term investing, you’ll hurt the overall performance of your portfolio"


An "antifragile" way to invest would be to diversify access different asset classes like US stocks, international stocks, property, bonds, currencies, commodities, precious metals, cash etc.

This is complicated...therefore Im sticking to stocks and will hold through the inevitable corrections that will occur.

You should not have any money in stocks that you may need to access within the next 5 years. If you are feeling scared then it may be wise to lighten up a little...take some profits on your stocks that are overvalued.

@steve9, You didn't read Nassem's polemic AGAINST market portfolio theory? Him and Warren agree, diversification is for suckers. And that is what happened in the 2008. Real estate prices tank, leads to banks, to insurance companies, to construction, to furniture, to household goods, to fast food restaurants, etc. So investment prices tank and the underlying businesses also take a hit. People saw their 401k lose money, house lose value, and got laid off. Some poor dudes prolly lost a wife too.

The argument is wrong in the press. It's not too big to fail, but too interconnected. When one set of investments fall, the natural reaction for many is to sell their good assets.

Taleb lays out his asset allocation practice in both books. 90% in cash/treasury notes, and 10% betting against the herd. That is it.
Figuring out what sacred cow to kill is up to you.

WIA

(11-24-2013 12:34 PM)WestIndianArchie Wrote:  Taleb lays out his asset allocation practice in both books. 90% in cash/treasury notes, and 10% betting against the herd. That is it.

In this video interview recorded after Antifragile was published, Taleb says he owns stocks, property, land and is selling his gold :

http://www.fool.com/investing/general/20...ng-in.aspx

Market portfolio theory successfully shows how one can minimize systemic risk by diversifying in a wide range of securities and asset classes. Urging the average investor to ignore that is going to introduce an unnecessarily higher amount of risk into their portfolio.

Any comparison of the average investor to Warren Buffett is a stretch, considering the vast amount of quality information he makes his decisions on, and how often he is courted and presented with sweetheart deals. Example: http://finance.fortune.cnn.com/2013/03/2...man-sachs/

All that said, I do think that Taleb has an interesting strategy that attempts to game the systemic risk problem that is present in any situation that attempts to price value. I'll admit that I haven't read Antifragile, but I have read two of his other books. Has he attempted to prove the efficacy of his strategy against an index fund or is he operating entirely upon heuristics?

(11-24-2013 06:20 AM)DarianFrey Wrote:  I know there are some market-savvy individuals here. How are you hedging against a crash? Is there an antifragile way to invest in today's market?

That book has already been written. By financial advisor and author (and the former Libertarian candidate for President) Harry Browne (R.I.P.).

The "Permanent Portfolio" advises diversifying one-quarter of your investment dollars into four asset classes, each of which performs very well under cyclic market conditions. That's interesting. They seem to have published a recent edition after his death:

http://www.amazon.com/Permanent-Portfoli...+portfolio

(11-24-2013 01:26 PM)Steve9 Wrote:  In this video interview recorded after Antifragile was published, Taleb says he owns stocks, property, land and is selling his gold

That interview made no sense whatsoever. He is deathly afraid of inflation, an increasing money supply, and even social unrest, but he is selling his gold? It sounds as if he does not understand the purpose of gold as a hedge and an insurance policy against everything that he identified as a financial threat.

It goes to show that having the intellectual capacity to analyze complex concepts does not translate into the ability to reap the rewards from actually placing them into practice. Even Nikola Tesla was a poor businessman.

According to the business press, Taleb made high 8 figures-low 9 figures betting against the housing bubble. He is purposely vague on the #s.

Gladwell covered his bleed everyday strategy before the Black Swan was published.

That being said, there are plenty of fat tail hedge funds out there that haven't done as well as Nassem

(11-24-2013 06:52 PM)Tail Gunner Wrote:  

(11-24-2013 01:26 PM)Steve9 Wrote:  In this video interview recorded after Antifragile was published, Taleb says he owns stocks, property, land and is selling his gold

That interview made no sense whatsoever. He is deathly afraid of inflation, an increasing money supply, and even social unrest, but he is selling his gold? It sounds as if he does not understand the purpose of gold as a hedge and an insurance policy against everything that he identified as a financial threat.

It goes to show that having the intellectual capacity to analyze complex concepts does not translate into the ability to reap the rewards from actually placing them into practice. Even Nikola Tesla was a poor businessman.

What exactly is the purpose of gold as an insurance policy? I do economics for living and I can't figure it out.

Contrary to popular opinion, the value of gold doesn't go up and down with a high level of correlation to the level of inflation or even inflation expectations. The price of gold, like the price of any commodity, moves more on the demand for gold than it does on any random macro factor.

Think of it this way. Let's say that holding gold does actually provide some sort of effective inflation risk hedge. As inflation expectations rise, more and more people look to hold gold and that raises the price of gold. Now gold is overpriced. Selling gold is a very good way of betting against the heard.

And if some black swan event does happen and the value of the dollar plummets. Guess what? The value of your gold also plummets, because most people can no longer afford to buy gold and the demand dries up. Gold is still going to be worth something, but not the $1200 or $1500 that you paid for it.

I consider myself a student of Benjamin Graham and The Intelligent Investor. Given today's financial climate, I invest primarily for dividends and stability. If I buy a stock it's with the intent to hold it for years down the road, unless the price gets grossly inflated beyond what I believe its value to be, in which case I'll sell.

The stock market, by nature, is fragile. Because the market is so sensitive to speculation there's no "anti-fragile" investment strategy. The antifragile investment used to be buying bonds back when there was an actual interest rate. I'm not sure if we'll see those days anytime soon.

In the short term, we can count on ever-increasing inflation, and I believe the only way to match the inflation rate is by investing in stocks with the intent to hold. For years I've held onto GE, Ford, ATT, Verizon, Shell, and other common stocks with a few "high risk" stocks that fortunately have done pretty well. Half of my investments are in common stocks, the other half is in funds with Vanguard; REIT, Index 500 fund, Inflation-Protected fund, International Value Fund, and Health Care Fund.

My investment strategy is to match inflation and the market; I'm very conservative in that matter but I'm a working class schmoe that doesn't have tons of money I'm willing to gamble. Out of my stocks, fewer than 10% are allocated for "high risk" investments. One of them is yielding a 9% dividend right now, and I'm happy with that.

My take on gold is that it's horseshit. I know that's a controversial stance, especially to the pessimistic crowd, but the shit would REALLY have to hit the fan for anyone to need to hold onto physical gold. And if the shit hit the fan that hard, gold wouldn't do anything for you anyway. I can only see gold being useful if you're trying to move assets to a deposit box in a different country with the intent of keeping things off the books (in which case I would move $10,000 watches, not gold) If I was interested in some gold in my portfolio I'd either invest in the Precious Metals Vanguard fund or buy stock with Newmont Mining.

Just shoot for 5-10% returns, no more no less.

Quote:And, not gonna lie, reading the Yellen article on RoK has got me pretty scared about the money I've already put into stocks

One piece of hard truth i am going to give you here, is if some random dude on the internet who has zero economic pull can make you scared about the economy you've got to become less attached to your money. I don't even know what article you are referring to but $1,000 says it is written by someone who literally has zero pull or say in the economy. Try predicting the economy and you'll be just like those dudes who said "investing in the stock market is dead".... back in 2010.

Ignore ignore ignore and buy assets that will return ~5-10% over the long-haul.

If you're worried about inflation and/or devaluation of the dollar, buy some assets or securities overseas. That's the best hedge you will get.

With all the posts I see on here talking about investing in the stock market now, i'm slowly diversifying AWAY from the stock market. Just this week I had a cab driver pitch me on buying "solar" stocks. At that point you know its time to look into other ideas. Make no mistake I still own securities but I'm no longer 100% exposed to equities like i have been the last 6 years or so.

This was the biggest year i've ever seen in my career and yet people are trying to tell me the "economy is weak". If you can't find ways to make money in this economy you're living under a rock.

---

I am giving too much info out now but as a rule of thumb:

$100K in invested assets = focus 100% on making more money/saving more money and simply dollar cost into indexes
$300-500K in invested assets = Seek out indexes, LONG-TERM preferred agreements. People who lose their money in the $100K range think that its all about "liquidity". NO. you want to lock up an investment in the 6 figure range for 3+ years because you'll get better returns, have stickier connections and likely receive a small preferred return
$1M+ invested assets = seek out indexes, long-term and *ultra* long-term investments. Ultra is a stupid word but what i am referring to is high risk long-term payout investments like a VC. At that point you can lose $25K and not die. But again you need to be well over the stick mark.

Assuming you're in the 100K range just don't worry about it save and diversify looking for 5-10%. Once you start creeping up on good money you can start to look for better ideas.

Everyone and their mom always wants to have "liquid assets" naturally this is how poor people think. There is actually great value in having a long-term investment, it's a relationship, slightly higher return profile and increases your ability to deal with volatility.

As an example a typical 4-6% yield investment could creep up to 8-10% if you choose the right market and lock yourself up for 3+ years.

(11-24-2013 07:56 PM)j r Wrote:  

(11-24-2013 06:52 PM)Tail Gunner Wrote:  

(11-24-2013 01:26 PM)Steve9 Wrote:  In this video interview recorded after Antifragile was published, Taleb says he owns stocks, property, land and is selling his gold

That interview made no sense whatsoever. He is deathly afraid of inflation, an increasing money supply, and even social unrest, but he is selling his gold? It sounds as if he does not understand the purpose of gold as a hedge and an insurance policy against everything that he identified as a financial threat.

It goes to show that having the intellectual capacity to analyze complex concepts does not translate into the ability to reap the rewards from actually placing them into practice. Even Nikola Tesla was a poor businessman.

What exactly is the purpose of gold as an insurance policy? I do economics for living and I can't figure it out.

You missed my point. My point was not to debate gold as an investment, but to understand what Teleb is thinking about gold.

Taleb is a very astute investor and financial analyst. In the video, Taleb states that he owned a great deal of gold. He states that he bought it as a hedge after the 2008 financial crisis. He states that he recently sold quite a bit of it. He also states that he still has quite a bit more gold that he wishes to sell. So, he obviously owned quit a bit of it.

My point is not to convince anyone here to own gold. You either already understand why it is important to buy gold -- or you do not. I could care less. Taleb obviously understands why gold is important to own, which is why he bought a great deal of it. Again, smart man.

My point is that most astute observers of the economy believe that we are in a period of calm in the eye of a continuing financial hurricane. The U.S. will not be the next spark. The next crisis will likely begin in Europe or Japan and then rip across the world in a growing contagion.

What I am saying is not novel. Taleb's books are about black swan events and the fragility of the world's financial system. In the video, he states that he is afraid of inflation, an ever-increasing increasing money supply, and even social unrest. Taleb gets it.

So, if he expects inflation, money printing, and social unrest, then why he is selling his gold? I doubt that anyone here can answer that question, but it is a question that anyone who agrees with Taleb and who would like to protect their wealth in a financial crisis would like to know. Food for thought.

Seriously, if you are a Taleb fan, listen to that video clip very closely several times. He is looking for a hedge against inflation, money printing, and social unrest. He also acknowledges that we are currently experiencing deflation and inflation at the same time, which is true. Scary stuff.

I'm at the very start of my investing career, with small capital, and I've read this advice in many different places. I've not acted on it yet because the market I'm in (OMXS30) is up 18-20 % this year alone. Is an index fund still a viable option with respect to those numbers?

I really appreciate all the replies to this thread, very interesting discussions.

(11-24-2013 11:13 PM)Tail Gunner Wrote:  So, if he expects inflation, money printing, and social unrest, then why he is selling his gold? I doubt that anyone here can answer that question, but it is a question that anyone who agrees with Taleb and who would like to protect their wealth in a financial crisis would like to know. Food for thought.

I just answered that question. Taleb likely thinks that gold is not a very good hedge against financial crisis and that it is over-priced because so many people buy gold thinking that it is. Selling gold is a way of betting against the herd.

(11-24-2013 08:51 PM)WestCoast Wrote:  This was the biggest year i've ever seen in my career and yet people are trying to tell me the "economy is weak". If you can't find ways to make money in this economy you're living under a rock.

My total investments are up about 17% from this time last year, and that's from being very conservative. Not saying that's guaranteed to continue, but anytime I read any Chicken Little B.S. "the sky is falling, the sky is falling..." I just laugh.

Worst case scenario and we get a major crash? Good. I've got about 20K I can buy into the market while it's rock bottom.

(11-25-2013 11:37 AM)thedude3737 Wrote:  Worst case scenario and we get a major crash? Good. I've got about 20K I can buy into the market while it's rock bottom.

It's all good unless you are highly leveraged, if you go long in a bear market thinking the stock exchange is at the rock bottom you put yourself in a very dangerous position.
You might think that the market is at the bottom and then it falls another 15%, for example, soon after.
If you are buying without leverage you can just wait for the next bull market but if you use leverage you can get hurt quite quickly.

The thing that makes no sense to me, is that supposedly, people buy gold to hedge against inflation. I don't understand the logic in this. If you're trying to keep with inflation, just dollar cost into the indexes. Even if gold is some sort of insurance against inflation, it's highly susceptible to speculation, which is what's going on right now. You've got chicken little rearing his head and saying, "If there's a rollback on QE then investors won't be buying as much gold to hedge against inflation so the value of gold is going to plummet" so everyone starts dumping and the value drops and gold turns into any other "hot" stock that got momentarily inflated beyond its value. Doesn't sound like a very good insurance policy to me.

(11-25-2013 11:53 AM)Way Cool Jr Wrote:  

(11-25-2013 11:37 AM)thedude3737 Wrote:  Worst case scenario and we get a major crash? Good. I've got about 20K I can buy into the market while it's rock bottom.

It's all good unless you are highly leveraged, if you go long in a bear market thinking the stock exchange is at the rock bottom you put yourself in a very dangerous position.
You might think that the market is at the bottom and then it falls another 15%, for example, soon after.
If you are buying without leverage you can just wait for the next bull market but if you use leverage you can get hurt quite quickly.

I'm not, I don't mess around with buying on margin etc. I buy stocks like I buy groceries. When I say "rock bottom" I mean when Ford was selling for $1.58 back in '09. I didn't quite catch it at that price but I bought in at around $4 shortly after. That's what I mean by rock bottom. If Apple plummeted to 200 right now I still wouldn't buy in even though most people would think I'm nuts.

(11-25-2013 06:46 AM)j r Wrote:  

(11-24-2013 11:13 PM)Tail Gunner Wrote:  So, if he expects inflation, money printing, and social unrest, then why he is selling his gold? I doubt that anyone here can answer that question, but it is a question that anyone who agrees with Taleb and who would like to protect their wealth in a financial crisis would like to know. Food for thought.

I just answered that question. Taleb likely thinks that gold is not a very good hedge against financial crisis and that it is over-priced because so many people buy gold thinking that it is. Selling gold is a way of betting against the herd.

You did not answer the question at all. First, the herd does not own gold. Any small portion of the herd who did own it bought it between $ 1,500 and $ 1,900 -- and then capitulated in June when it dropped below $ 1,200. The herd only buys when a commodity is hot. They always buy at the wrong time. Gold is now at the end of a three year correction and is now finishing a complex bottoming process, having dropped in price from over $ 1,900 to less than $ 1,200.

Second, the price of gold has bottomed either January or February in something like nine of the last thirteen years. January and February is now right around the corner and also coincides with the end of a complex bottoming process. So, if anything, gold is now undervalued and within a month or two of a final bottom and a great buying opportunity.

You did touch upon what I would like to know. Yes, for some reason, Taleb likely thinks that gold is not a very good hedge against a financial crisis, which he is clearly expecting. But why?

____________________________________________

Damn. After I wrote this missive, I realized I should have just Googled for an answer. [insert palm to forehead here]

He appears somewhat coy in his answer, but here it is:

Quote:Given Taleb’s conviction that overgrown banks and rampant money creation are badly destabilizing the financial system, it’s natural to think he would take refuge in gold, which is why a conference attendee asked him whether gold represents part of his stable-value portfolio ballast.

He answered that he used to believe in this role for gold. But now, he says, “It’s too neat a narrative, gold.” He seems to mean that gold owners believe too avidly in the inviolability of the metal, and have constructed too elaborate a reassuring story about why it must perform as expected.

“Central banks own gold,” he notes, as if that is a self-evident indictment. And: “Something that doubles [in value] in no time can’t be a real store of value.”

So, he does not believe that gold is necessarily a poor investment if you expect a highly destabilized financial system. But he also does not trust gold to remain a constant store of value -- just as he does not trust equities, bonds, or derivatives. So, what does he trust?

But although I now understand his argument, I do not buy his point. Gold has always increased in value as currencies badly inflate and lose their purchasing power. The value of gold remains stable, but it takes more [insert name of currency here] to buy it because of the currency devaluation that occurs during inflation. That is economics 101. The value of gold remains stable while the value of the fiat currency implodes. The world's monetary system was based on that very idea until 1970.

So, in summary, Taleb believes that gold is not "‘anti-fragile" enough for the next financial crisis. Wow. That is a scary thought indeed.

http://finance.yahoo.com/blogs/michael-s...16155.html

Nice post but I slightly disagree on buying into the company you work for. By all means run the same stock analysis and don't buy in just for team spirit, but I bought into Starwood http://www.google.com/finance?q=NYSE%3AH...FMi1iALHVQ when I worked at one of their properties and they were offering a fantastic employee discount on stock back in 2008. My only regret is not having enough cash to buy more.

(11-25-2013 12:43 PM)Tail Gunner Wrote:  

(11-25-2013 06:46 AM)j r Wrote:  

(11-24-2013 11:13 PM)Tail Gunner Wrote:  So, if he expects inflation, money printing, and social unrest, then why he is selling his gold? I doubt that anyone here can answer that question, but it is a question that anyone who agrees with Taleb and who would like to protect their wealth in a financial crisis would like to know. Food for thought.

I just answered that question. Taleb likely thinks that gold is not a very good hedge against financial crisis and that it is over-priced because so many people buy gold thinking that it is. Selling gold is a way of betting against the herd.

You did not answer the question at all. First, the herd does not own gold. Any small portion of the herd who did own it bought it between $ 1,500 and $ 1,900 -- and then capitulated in June when it dropped below $ 1,200. The herd only buys when a commodity is hot. They always buy at the wrong time. Gold is now at the end of a three year correction and is now finishing a complex bottoming process, having dropped in price from over $ 1,900 to less than $ 1,200.

Second, the price of gold has bottomed either January or February in something like nine of the last thirteen years. January and February is now right around the corner and also coincides with the end of a complex bottoming process. So, if anything, gold is now undervalued and within a month or two of a final bottom and a great buying opportunity.

You did touch upon what I would like to know. Yes, for some reason, Taleb likely thinks that gold is not a very good hedge against a financial crisis, which he is clearly expecting. But why?

____________________________________________

Damn. After I wrote this missive, I realized I should have just Googled for an answer. [insert palm to forehead here]

He appears somewhat coy in his answer, but here it is:

Quote:Given Taleb’s conviction that overgrown banks and rampant money creation are badly destabilizing the financial system, it’s natural to think he would take refuge in gold, which is why a conference attendee asked him whether gold represents part of his stable-value portfolio ballast.

He answered that he used to believe in this role for gold. But now, he says, “It’s too neat a narrative, gold.” He seems to mean that gold owners believe too avidly in the inviolability of the metal, and have constructed too elaborate a reassuring story about why it must perform as expected.

“Central banks own gold,” he notes, as if that is a self-evident indictment. And: “Something that doubles [in value] in no time can’t be a real store of value.”

So, he does not believe that gold is necessarily a poor investment if you expect a highly destabilized financial system. But he also does not trust gold to remain a constant store of value -- just as he does not trust equities, bonds, or derivatives. So, what does he trust?

But although I now understand his argument, I do not buy his point. Gold has always increased in value as currencies badly inflate and lose their purchasing power. The value of gold remains stable, but it takes more [insert name of currency here] to buy it because of the currency devaluation that occurs during inflation. That is economics 101. The value of gold remains stable while the value of the fiat currency implodes. The world's monetary system was based on that very idea until 1970.

So, in summary, Taleb believes that gold is not "‘anti-fragile" enough for the next financial crisis. Wow. That is a scary thought indeed.

http://finance.yahoo.com/blogs/michael-s...16155.html

This is exactly what I said in my first post. Gold is not the effective hedge against financial collapse that some people think it is. Gold will likely always be valuable, but like any other commodity it's price is going to be a function of overall demand in the economy. If overall demand plummets, then the price of gold plummets as well.

(11-25-2013 01:06 PM)j r Wrote:  This is exactly what I said in my first post. Gold is not the effective hedge against financial collapse that some people think it is. Gold will likely always be valuable, but like any other commodity it's price is going to be a function of overall demand in the economy. If overall demand plummets, then the price of gold plummets as well.

If you left out the phrase "financial collapse" I would agree with your analysis. Under normal market conditions, you are correct that gold acts like a typical commodity subject to normal market forces.

You are absolutely wrong, however, if your analysis includes the next "financial collapse." The very nature of a financial collapse means that people flee from normal investments into safe money. So far, safe money means the U.S. dollar. What happens when the U.S. dollar loses its status as the world's reserve currency or loses more than the 95% of its purchasing power that it has already historically lost in comparison to gold because of the governments out-of-control spending? Gold is an effective hedge against financial collapse because it is real money.

Just look at history. Where did the price of gold go during the period of stagflation in the 1970s. Where did the price of gold go after the 2008 financial panic (after the price of gold initially deflated)? Where will smart money flee when people no longer trust the perceived safety of the U.S. dollar?

Taleb may believe gold is fragile because there is a possibility that it becomes a remnant of a disappearing world.

When things really go south, they're not going to go south for the elite. They'll be getting richer, trading via inside deals, jetting to exclusive enclaves. They will become more untouchable than ever. In this respect, holding ancient stores of value, and therefore ancient beliefs about the meaning of value, can be a negative mental anchor, and therefore fragile.

For those stuck to the old ways, who will remain in District 9, physical gold makes sense. If nothing else it will be valuable for trade: staples, bullets, housing.

Taleb believes gold is fragile because he believes the elite have the infrastructure to pull away this time, and he doesn't plan on trading gold for beans and shitting in the woods.

(11-25-2013 01:55 PM)Sawyer Wrote:  Taleb may believe gold is fragile because there is a possibility that it becomes a remnant of a disappearing world.

When things really go south, they're not going to go south for the elite. They'll be getting richer, trading via inside deals, jetting to exclusive enclaves. They will become more untouchable than ever. In this respect, holding ancient stores of value, and therefore ancient beliefs about the meaning of value, can be a negative mental anchor, and therefore fragile.

For those stuck to the old ways, who will remain in District 9, physical gold makes sense. If nothing else it will be valuable for trade: staples, bullets, housing.

Taleb believes gold is fragile because he believes the elite have the infrastructure to pull away this time, and he doesn't plan on trading gold for beans and shitting in the woods.

That is actually a very thoughtful reply.

I myself am not expecting a "Road Warrior" scenario, but a temporary scenario such as another Great Depression or a world in which most countries have economies similar to Argentina and Greece. Or the most plausible and inevitable scenario, where the U.S. dollar loses its status as the world's reserve currency.

I think that gold and silver would do well in such scenarios. They always do. They also make many people wealthy.

Your idea, however, is one plausible hypothesis as to why Taleb might think about gold the way that he does. But it does not explain away what would happen to the price of gold if even a few percent of bondholders or equity holders flee to gold and silver, instead of the U.S. dollar and U.S. treasuries.

I think that Sawyer is onto it. Taleb is saying that you can't make your portfolio anti-fragile, because you have no idea what asset prices will do in the aftermath of a black swan event.

Better to focus on preserving capital with slow and steady growth, while focusing on making yourself anti-fragile. In other words, if the shit hits the fan, better to have spent this time acquiring human capital, connections, reputation, experience, etc. than burying gold coins in the backyard.

I'll write more about my opinions on gold and the dollar when I am in front of a real keyboard, but my main problem with gold as an investment is that it's purely a bet on price. It doesn't compound and it pays no dividends.