Note Course Bonus: For Investors Only
Published: Tue, 06/10/08
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This morning I went to www.missingmoney.com and looked up my name
to see if I had any unclaimed assets. I didn't. I looked up some
friends and, amazingly, about half of them did (I let them know,
of course).
It's a free service sponsored by state governments. You might
have some found money.
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"If you don't trust gold, do you trust the logic of taking a pine
tree, worth $4,000-$5,000, cutting it up, turning it into pulp,
putting some ink on it and then calling it one billion dollars?"
- Kenneth J. Gerbino
I didn't buy a note this year.
As an individual investor I can wait for good deals. By "good deal"
I mean a solid note that pays at least two and a half the prime
rate, which at the moment is 6 percent. That makes my minimum
yield for a bank-quality first mortgage 15%. When I can
average 10 percent or more in other investments that don't require
servicing, why would I want a mortgage that pays just a few points
more?
Our present interest rate environment means that residential
property sellers have no incentive to take back financing. However,
if the real estate slowdown continues, that will change.
Notice I said "residential." The market you need to be working is
commercial; that is, anything other than residential, such as office
buildings, warehouses, other industrial properties, land, farms,
businesses, etc. That's where seller financing still exists today,
but almost nobody is working those profit centers.
So where do I think one's cash should be? Mine is parked in
Australian and Canadian dollars and Euros (NYSE symbols FXA, FXE,
FXC) and gold and silver (NYSE: GLD, SLV, CEF, CTU).
Central Fund of Canada is balanced about 50-50 between gold and
silver. You can accomplish the same buying equal amounts of GLD
and SLV, but the tax treatment of those funds is not as favorable
as CEF.
I believe you ought to own some physical gold as well. It should
not be in collectable (numismatic) coins, but rather in coins that
maximize the gold value and have little or no numismatic value.
That way you are investing in gold, not the whims of coin
collectors.
Why coins instead of gold bars? Coins are liquid, easily sold.
Bullion has to be tested. Another is a related reason: You can't
sell part of a gold bar. OK, you conceivably could, but you'd
have to hack off a chunk and pay someone to grade and weigh it,
and then find someone who is willing to buy a hacked-off piece
of a gold bar. And he'd probably want to pay less than it's worth.
Why not stock in gold or silver mining companies? Fine, if you want
to invest in mining companies and not gold or silver. When you
buy stock in mining companies (as I have off and on for 25 years)
you are investing in the future of that company. You are exposing
yourself to a myriad of risks, including strikes, accidents, tapped-
out mines, mismanagement, lower mine output, increased extraction
costs, corrupt company officials, government regulations,
third-world corruption and revolutions, etc., etc.
For gold coins, contact Franklin Sanders at the-moneychanger.com
or 1-888-218-9226.
For the past 25 years gold was a terrible investment. But when the
economy started going south it became a different story. If you had
bought gold coins as recently as mid-2005 you would have doubled
your money. If you had waited and bought them a year ago, you would
have only made 40 percent.
As I write this (Monday morning 2/4/08), the NY gold spot price is
$897.50. A year ago today it was $654.75, a 37% rise in one year.
(Of course, it could have, and has, gone down 37% or more in one
year.) But I believe gold is catching up to it's inflation-adjusted
price of about $2,000 per ounce (depending upon what inflation
assumptions are used -- personally I think it's more than $2K).
The reason is that gold is the only real money. The printed pieces
of paper in your wallet are constantly going down in value (have
you bought a steak, a gallon of milk or a gallon of gas lately?).
The dollar-denominated paper in your wallet, bank accounts, IRA and
401(k) is losing value because of the decisions of the central
bank, the Federal Reserve. The more paper dollars they print, the
less each dollar is worth. That is common sense.
One dollar saved when the the Federal Reserve was created in 1913
is now worth 4 cents. The same dollar converted to gold is now
worth $23.00.
There's an excellent article (from which the above quote about
pine trees and dollars comes) at http://snipurl.com/1yyoh
FYI, here's my favorite columnist, who believes the same things
about gold and silver as I do, among other things:
http://www.dailyreckoning.com/Writers/MogamboGuru.html
"By a continuing process of inflation, governments can confiscate,
secretly and unobserved, an important part of the wealth of their
citizens. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process
engages all the hidden forces of economic law on the side of
destruction, and does it in a manner which not one man in a million
is able to diagnose." -- John Maynard Keynes
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-- Jerry James, Attorney & Note Buyer (20 Years Experience)
Salt Lake City
Download Lorelei's Legal Lessons and get it right now!
http://www.papersourceonline.com/lllinfo.htm
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I resisted starting a blog because I thought they were simply
self-serving. I still think so. But I found a blog hosting site
that lets you put links for your own products in the margin, and
I thought, "Whoa! I can be self-serving yet make money, too! I
love America!"
So that's why my blog is called "Enough About You, Let's Talk About
Me." (Be sure to click on the links and buy the stuff.)
Sometimes I'll talk about investments, note brokering and such.
Sometimes it'll be about politics, religion, who knows what. It's
at http://papersource.wordpress.com/