Corvair Owner via flickr
Trump is such a joker. He’s set to lease office space at his 40 Wall Street building to a company called Apmex. Instead of taking a $176,000 security deposit in cash like normal non-comb-over people would, Trump is taking 3 bars of gold for the deposit. I’m not joshing you, he’s taking bars of GOLD instead of cash. What the…….??
Trump thinks the President isn’t doing anything to protect the value of the US dollar. He’s right, but that’s not the point. The point is that by taking the bars of gold instead of cash, Trump thinks that the gold will hold its value better than the US dollar, or $176,000.
But let’s be honest, what’s $176,000 worth to Trump anyway? Nothing, he probably spends $176,00 on hairspray and caps for his teeth in a year. This was a marketing stunt for him, and Apmex. Did I mention Apmex is a precious metals dealer? Talk about great free publicity!
It’s funny when Trump does ridiculous things like this, but not so funny when you or I do it, so don’t get any ideas.
When I hear people talk about gold now and they say it’s “the best investment because it always goes up,” it reminds me of how people use to talk about real estate….. before it stopped going up. Everybody loves looking in the rear view mirror, except when you’re naked and walking away from the mirror.
As a reminder, here’s a chart of gold over the last 10 years.
Ninety-five percent of the people I know who are piling in to gold right now are doing it because of this chart, and this is why I don’t listen to 95% of the people I know: they’re making their decision based on past information and have no clue about the future.
Read the full article on Trump’s deal at WSJ here.
Do you have exposure to gold? If yes, how?
Hi Kathryn,
My exposure to gold is through the EFT GLD (about 7% of my portfolio). I recently bought into gold to hedge a bit, as I am heavily exposed to equities.
Corey
PS, I am up 4.3% in three weeks.
Nice! As a hedge, I like it. As a “sure thing” or core part of a portfolio, I don’t.
I know I should stop myself, but I am overwhelmed by the need to say my exposure to gold is on my ring fingers. Ba-dum-ba!
gold rings or gold caps….it’s still gold so worth more now than 10 years ago!
I would have thought a lot of people would merely wish for exposure to a safe income right now. I don’t know what to say about this to be honest. Of course it’s DT doing his usual horse and pony show which I’m not averse to occasionally. But knowing his track record I certainly wouldn’t be taking investment advice from him.
Agree….I’m just not so sure that people understand the difference between gold being “safe” and a hedge/diversifier to equities. Most people think gold is safe income, but it’s really just a diversifier.
Can’t eat it, shoot it or spend it (at least on non-trump owned assets i guess). Its negative carry. Everyone from glenn beck to michael savage on right wing talk radio is telling me to buy it after a huge move. Pass…. (of course, i said the same thing 5 years ago)
Yeah, by the time everybody is talking about it, it usually means the big run up or easy money it’s played out. Not that it isn’t a good hedge as a small part of a portfolio, but people are going bananas and dumping in way too much of their money. I have a friend who called it 10 years ago and has been pairing back, Scott where are you???
Check out this article. I hope people revisit their gold exposure before real interest rates start to rise or else they could be in for a real treat.
http://seekingalpha.com/article/293804-what-will-pop-the-gold-bubble-update
I’ve got two gold crowns. Do those count? Also, I panned for gold a few times in Alaska.
But seriously: After the bubble bursts, what happens to the people who put WAY too much money in it at the current price? When they need cash, they’re going to be pretty dismayed at the difference between what $10,000 worth of gold today looks like vs. what it looks like when the price drops.
My favorite quote from one of those commercials: “It’s never NOT been worth nothing!” I know what they’re trying to say, but…Huh?
(Yes, I am exposed to gold commercials. Am visiting my father and stepmother and Fox News is on day and night.)
I hear you….it has a place in a portfolio, but all the gimmicky stuff that’s going on with it right now is insane.
My parents are split, half watch fox, the other half won’t go near it. Probably why I’m split!
Platinum baby. That’s where it’s at. And Salt. Don’t forget salt.
Oh yeah, salt…. + lime….and a little tequila.
What sort of asset allocation would you suggest if I am going to put some money in Tequilla futures as a hedge against by gold holdings?
Depends on how much your gold moves against you….you might need A LOT of tequilla.
I bought $10,000 worth of gold when it was selling at $240.
I’m not bragging. If I were smart, I would have bought more.
I bought it to be diversified and contrarian more than anything else. I believe in the Gene Mauch (former manager of the Philadelphia Phillies) rule: a team is never as bad as most people say it is when it is bad and never as good as most people say it is when it is good.
The thing I like least about gold is that it does well when the economy is imploding. If the economy implodes too much more, my gold is not going to help me much. I want a well-functioning economic and political system more than I want investment profits!
Rob
Wow Rob, what is that, a 600%+ return???
“The thing I like least about gold is that it does well when the economy is imploding”
But gold did well over the last 10 years an technically we didn’t start imploding until 2007?That’s why people keep buying it…they think it will always go up because it has over the last 10 years, but they don’t realize it could/should behave the way you describe.