id5 Posted March 22, 2009 Report Share Posted March 22, 2009 I was not commenting on investing in general, just trading. I think there needs to be taxes introduced to discourage short term investment holding and promote longer term investment... Often short term investment is generates a small profit where each trade returns < 5%. If short term trades are taxed you could kill the opportunities. Better to offer tax incentives/rebates for long term investment. Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 Often short term investment is generates a small profit where each trade returns < 5%. If short term trades are taxed you could kill the opportunities. Better to offer tax incentives/rebates for long term investment. I agree that there should be tax incentives for longer term investing. Short term trading needs to have increased taxes over the total gain for the year IMHO. Something needs to be done to stop the traders wreaking the system with naked shorting. Maybe the uptick rule just needs to be reinstated as Jim Sinclair has been going on about. Link to comment Share on other sites More sharing options...
nicejim Posted March 22, 2009 Report Share Posted March 22, 2009 I was not commenting on investing in general, just trading. I'm sure that no one would doubt the need for investing, so I was making the case for investing only to show that trading is a necessary part of the game, whose foundations are investments, and that there is anot necessarily a loser for each winner. Insurance, reinsurance, CDSs etc are all, when taken at face value, sensible products built on the same foundations. Clearly something went wrong but I'm not sure that the problems we face are from people making a fast buck, or that legislating against short-term investing either would be possible or could make things better. Perhaps it's simply the case that there was too much money to finance the finite extent of future growth, leading people to [metaphor type=badly_inserted]try to extend the building without increasing those foundations[/metaphor]. Sure money is needed to make the world go around, but all the financial news is about short term trading, hence we get insults like Jim Cramer's "Mad Money". I realise there will always be traders who hold for the short term, but don't think it should be encouraged for everyone to try. Yep, what people want is the thought that they can make lots of money by next week but what they need is to know how to prepare for their retirement or their kids' college fees. Unfortunately the market gives people what they want. Edit: that metaphor didn't read well ;-) Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 I'm sure that no one would doubt the need for investing, so I was making the case for investing only to show that trading is a necessary part of the game, whose foundations are investments, and that there is anot necessarily a loser for each winner. Insurance, reinsurance, CDSs etc are all, when taken at face value, sensible products built on the same foundations. Clearly something went wrong but I'm not sure that the problems we face are from people making a fast buck, or that legislating against short-term investing either would be possible or could make things better. Perhaps it's simply the case that there was too much money to finance the finite extent of future growth, leading people to try to extend the building without increasing those foundations. Why is short term trading a necessary part of the game? The markets would be a lot more stable place and finances more predictable if it was discouraged. Do you agree with the naked shorting of Lehmans? BTW like your avatar Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 If I had the opportunity to use my skills and contribute to society, I would but I cannot so I do what I can to survive and so does everyone else. My point is that everyone has to make the best of living in a decaying society. When we reach a critical point of poverty and repression, there will be a revolution and the cards are shuffled anew! Hence my comments about the world needing to move back to people doing real jobs, working producing stuff. IMO The world needs to be reorganised so that real work is encouraged, the way things are going we will all be trading between each other with more volatile markets and more losers everyday. Link to comment Share on other sites More sharing options...
drbubb Posted March 22, 2009 Report Share Posted March 22, 2009 Well done for your quick profit. You need to realise a lot of the people who are into gold are not traders, we have other professions ... I prefer doing an honest days work for an honest days pay and feel better about working hard and producing something at the end of it. To me not everything in life is about making money, it is more about enjoying your time while doing it. I thought you knew that I work damn hard at achieving those trading results. In getting the timing right, I had help from others, like Larry P., Tom Obrien, and some historical "giants of technical analysis". But I also did many hours of research, into deciding exactly when and what to trade. And frankly, I think I was blessed with some luck on this particular occasion. What makes you think that such hard work is not also an "honest profession."? Does the fact that people share their knowledge freely, and allow others to use it with less work, mean that it is someone not an "honest effort" that brought such knowledge. How do people lose from my efforts here? I thought the generous efforts from myself, and many others on this website would be apparent to all by now. In fact, the timing of the last conference call was designed to share the opportunity that I saw emerging with as many as I could. I think part of the problem that has got us into this mess is the desire by people to make money off trying to trade into and out of financial instruments. We need to go back to a society where we work hard to produce & sell physical things, rather than financial instruments that enable some to gain as others lose. You have made money out of buying a option then selling it for more, but think to yourself someone somewhere has been on the other end of that deal and has lost money. Trading is quite similar to gambling in my eyes, someone wins - someone loses. No one has lost out by me earning my money, in fact they have gained by buying my service. It sounds like you want to ban trading in financial instruments. I wonder what sort of world that would bring on? My idea is that people need to be educated on how to survive in the volatile world that we are moving into, and also to understand that it has been the over-use of debt and credit, whivh had been the main thing that has brought on this mess. I dony blame it on the financial instruments per se. That is like blaming a power drill, for a mess when someone makes a mess when using it. Please don't take this as a personal attack, it isn't. I commend you for providing this site to help people make discussions and reach a level of understanding with what is happening in the world. I am just trying to explain that being a financial trader is not for everyone and that a lot of the goldbugs on here are not attempting to be traders, but merely trying to stop our lives being destroyed by this mess created by the current system. I wish it was so easy. The lesson I learned last year, when gold and gold shares collapsed with everything else, is that the volatile times we are in might not make it easy for anyone. I would prefer that we were in a more stable world and that longer term strategies like buy and hold of gold. could be relied upon. But I fear that is not the case. On your last statement about putting money into GLD, have you not been reading all the information that has been posted here and elsewhere about the problems with EFTs. Do the really own the gold they say they do or are they just part of the problem, derivatives based on the price of gold? If this whole financial mess has been caused by the massive build up of leverage and counter party risk caused by derivatives, how is holding a derivative of gold going to help when the SHTF? I think the troubles with etf's have been greatly exaggerated. There's a piece on Zeal that does a reasonable job of debunking some of the more outrageous claims and fears. I wonder of you have read it? Link to comment Share on other sites More sharing options...
nicejim Posted March 22, 2009 Report Share Posted March 22, 2009 Why is short term trading a necessary part of the game? The markets would be a lot more stable place and finances more predictable if it was discouraged. Do you agree with the naked shorting of Lehmans? BTW like your avatar Naked shorting involves selling something you don't own, so I'm against it...unless it keeps the price of gold and silver temporarily suppressed. Imagine you know 2 people, one who likes to take big risks with his money and one who prefers to have his capital generate an income but can handle more risk than he can get from bonds. Suppose one owns part of a company that has grown from nothing in the last few years and now is a well known player in its industry with a steady stream of income. The risk taker would benefit from selling to the more risk averse person, and you are in a position to make it happen. You get the two together and broker the sale, taking a small fee for the introduction. So far there is no short term trading going on, but what if there is a bit of uncertainty introduced? The company is planning to expand its operations but the return on the new investment is less than the risk-taking owner can get elsewhere, so he wants to get his money out. The other potential investor doesn't like the sound of the planned expansion - he wants to see how it plays out before committing any cash. In this scenario you might decide to investigate the potential of the expansion and hold a stake in the company whilst the expansion takes place. This isn't very short term but you'd still effectively be a trader. More importantly, it is not the act of trading that has introduced the instability. What would happen if you knew the risk taker but not the other person? You might still want to buy his stake if you believe you can find someone to sell to at a later date. In this scenario you are purely a trader, and are speculating too. But what are you speculating on? It's not the stability of the price of the company, it's the possibility of finding someone to sell to at a reasonable price above what you need to buy for. You say trading is similar to gambling, but there are 2 ways to gamble. Which one are you? a) You guess the outcome and find the best price b) You make a guess at how many times an outcome would occur if the scenario was played out 10 times, then find odds which are better than that Edit: to be continued... http://www.greenenergyinvestors.com/index.php?showtopic=6295 Link to comment Share on other sites More sharing options...
drbubb Posted March 22, 2009 Report Share Posted March 22, 2009 I believe I read something recently about possible changes to the tax system to encourage longer term investments. Everyone trading brings very high volatility which is only good for the best traders and not the world in general. It already exists ! As a US citizen, I pay a tax of maybe 35% on short term gains of under 1 year, and only 20% on long term gains. You say trading is similar to gambling, but there are 2 ways to gamble. Which one are you? a) You guess the outcome and find the best price b) You make a guess at how many times an outcome would occur if the scenario was played out 10 times, then find odds which are better than that I dont think it is like gambling. It is more like a detective story, or trying to solve a mystery, where the clues will always be imcomplete and lead to different and unexpected endings. Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 I thought you knew that I work damn hard at achieving those trading results. In getting the timing right, I had help from others, like Larry P., Tom Obrien, and some historical "giants of technical analysis". But I also did many hours of research, into deciding exactly when and what to trade. And frankly, I think I was blessed with some luck on this particular occasion. I know and observe that you work very hard to make the trades and money that you do. I was just trying to say that not all the goldbugs on here want to learn to trade. I do question what has been gained in the world by the work you have done to make 30% by investing for 3 weeks though. My post was not a personal attack it was more an observation about the way the world is going. The more buying & selling there is the more volatile the markets become and the financial markets purpose is to provide capital for real projects. So increased volatility breads less stable financial system and less projects getting of the ground. What makes you think that such hard work is not also an "honest profession."? Does the fact that people share their knowledge freely, and allow others to use it with less work, mean that it is someone not an "honest effort" that brought such knowledge. If someone reads something off a website and profits from it, what work has been done. How do people lose from my efforts here? I thought the generous efforts from myself, and many others on this website would be apparent to all by now. In fact, the timing of the last conference call was designed to share the opportunity that I saw emerging with as many as I could. I for one have lost money in the past by following some advice from this site, by investing into some Juniors before the crash. You have to agree that you do not always get it right. Which isn't a problem for a trader and is to be expected, you position yourself accordingly. Don't worry I did not lose big, I am just trying to answer your question. It sounds like you want to ban trading in financial instruments. I wonder what sort of world that would bring on? My idea is that people need to be educated on how to survive in the volatile world that we are moving into, and also to understand that it has been the over-use of debt and credit, whivh had been the main thing that has brought on this mess. I dony blame it on the financial instruments per se. That is like blaming a power drill, for a mess when someone makes a mess when using it. I don't want to ban trading in financial instruments, I just think that short term trading should be discouraged by the tax system and long term investing should be encouraged. Kind of like the old capital gains taper relief system that has just been got rid of in the UK. Do you not agree that more trading = more volatile markets. The markets are currently very volatile, no one can be expected to always be on the right side of the trade. I wish it was so easy. The lesson I learned last year, when gold and gold shares collapsed with everything else, is that the volatile times we are in might not make it easy for anyone. I would prefer that we were in a more stable world and that longer term strategies like buy and hold of gold. could be relied upon. But I fear that is not the case. I think we are in a global currency crisis and gold will end up being the best way to preserve your capital/buying power. Yes there will be lots of up and downs as we get the waves of inflation and deflation, but when it comes down to it they can't just print more gold. That is not to say that there will be other instruments to help achieve the same goal, oil & commodities could well end up being one as well. I think the troubles with etf's have been greatly exaggerated. There's a piece on Zeal that does a reasonable job of debunking some of the more outrageous claims and fears. I wonder of you have read it? Sorry I missed that one, would be very interested to read it. You have got to admit that the amount the EFTs have been increasing means they cannot be holding actual gold though, otherwise where are they buying it from? Please don't take my post as an insult to all your efforts and hard work in trading and passing on financial knowledge via this site. I know I have gained a great deal more understanding of things by posting here. I was more meaning it as an observation to the way the world is going currently. I think we need to return to more people doing real jobs and less profiteering via buying and selling. Trading brings volatility to markets and that discourages development of projects. Link to comment Share on other sites More sharing options...
drbubb Posted March 22, 2009 Report Share Posted March 22, 2009 RELATED POST... I believe I read something recently about possible changes to the tax system to encourage longer term investments. Everyone trading brings very high volatility which is only good for the best traders and not the world in general. It already exists ! As a US citizen, I pay a tax of maybe 35% on short term gains of under 1 year, and only 20% on long term gains. You say trading is similar to gambling, but there are 2 ways to gamble. Which one are you? a) You guess the outcome and find the best price b) You make a guess at how many times an outcome would occur if the scenario was played out 10 times, then find odds which are better than that I dont think it is like gambling. It is more like a detective story, or trying to solve a mystery, where the clues will always be imcomplete and lead to different and unexpected endings. == == == ... I do question what has been gained in the world by the work you have done to make 30% by investing for 3 weeks though. Evidence that I am following the rights clues, and that I am onto a better understanding of the nature of the market's mystery. The more buying & selling there is the more volatile the markets become and the financial markets purpose is to provide capital for real projects. So increased volatility breeds less stable financial system and less projects getting of the ground. Are you sure about that? Some believe that more trading breeds a more efficient and lore liquid market. If someone reads something off a website and profits from it, what work has been done. I for one have lost money in the past by following some advice from this site, by investing into some Juniors before the crash. You have to agree that you do not always get it right. Which isn't a problem for a trader and is to be expected, you position yourself accordingly. Don't worry I did not lose big, I am just trying to answer your question. If you are seeking easy profits here, you are seeking the wrong thing. You should be seeking knowledge I don't want to ban trading in financial instruments, I just think that short term trading should be discouraged by the tax system and long term investing should be encouraged. Kind of like the old capital gains taper relief system that has just been got rid of in the UK. Do you not agree that more trading = more volatile markets. The markets are currently very volatile, no one can be expected to always be on the right side of the trade. As I said, they do that now in the US: lower taxe rate (about half) for gains over one year. I think we are in a global currency crisis and gold will end up being the best way to preserve your capital/buying power. Yes there will be lots of up and downs as we get the waves of inflation and deflation, but when it comes down to it they can't just print more gold. That is not to say that there will be other instruments to help achieve the same goal, oil & commodities could well end up being one as well. You may be right. But not everyone thinks a gold standard is the answer. Sensible people regretted its lack of flexibility. I'm not so sure, But what I feel certain is needed, is recognition that excessive use of credit needs wringing out of the system. This is not the thinking that the Fed is using. They are trying to "fix" the system by loosening credit. Sorry I missed that one, would be very interested to read it. You have got to admit that the amount the EFTs have been increasing means they cannot be holding actual gold though, otherwise where are they buying it from? I will seek the link later Please don't take my post as an insult to all your efforts and hard work in trading and passing on financial knowledge via this site. I know I have gained a great deal more understanding of things by posting here. I was more meaning it as an observation to the way the world is going currently. I think we need to return to more people doing real jobs and less profiteering via buying and selling. Trading brings volatility to markets and that discourages development of projects. I think you see the value of knowledge offered here, which is a good thing, but dont knock those that use knowledge here to make a living, I just hope that if they have benefitted from the generousity here and elsewhere, that they will be willing to be generous to others too. If this site spreads a karma of genrousity, then it is truly doing its main job and purpose. Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 It already exists ! As a US citizen, I pay a tax of maybe 35% on short term gains of under 1 year, and only 20% on long term gains. I was unaware of the tax rules in the US. In the UK the rules have recently been changed to a flat 18% capital gains tax, it used to be a higher amount that reduced over time. It would be good if they reduced the long term tax to zero I think, it would encourage investment. Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 An example of trading gone mad Naked Short Sales Hint Fraud in Bringing Down Lehman (Update1) By Gary Matsumoto March 19 (Bloomberg) — The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts. As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30. The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days. “We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’” Link to comment Share on other sites More sharing options...
Mr Pipples Posted March 22, 2009 Report Share Posted March 22, 2009 Pixel8r - I've just skimmed through these last round of posts re. ethics of trading, but I'd guess you might be over-generalising in your posts while, actually, you are thinking of (and therefore, should maybe be referring specifically to) certain types/ways of unethical/irresponsible trading, unethical/irresponsible financial instruments - which might be governed in an unsatisfactory and damaging manner. Bad practise, bad products, bad procedures, etc. I agree with the basics of that kind of thing being wrong - but not trading, per se, being intrinsically wrong. I do agree with a lot of peoples view on here, including Pixel8r's, that there is a v. strong argument in support of buy and hold physical pm's. Like some of the others who do trade (and talk about it here) - I do not trade my (majority) core holdings. (I might skip in and out with some very occasionally (haven't yet) if it seems like a obvious winner - but I'd always leave a healthy portion.) To be honest, I would like to see Dr B buying a bit of physical bullion too! Link to comment Share on other sites More sharing options...
G0ldfinger Posted March 22, 2009 Author Report Share Posted March 22, 2009 ... To be honest, I would like to see Dr B buying a bit of physical bullion too! The less he buys of the real thing, the more you can buy. If too many like Bubb bought physical, paupers like me couldn't afford any. Link to comment Share on other sites More sharing options...
warpig Posted March 22, 2009 Report Share Posted March 22, 2009 I'm with you brother! IMO people define SHTF differently, others consider this to be a deep recession, I see this as something far worse with far reaching consequences. The prospect of making a bad trade and ending up with less than I started with scares me in to buying the dips and holding. Personally I don't care if I don't make the maximum amount of money out of my initial outlay, so long as I preserve in real terms what I have and accumulate a little bit more if I'm lucky, I will have achieved 100% of my goals, anything beyond this is a result! Do the really own the gold they say they do or are they just part of the problem, derivatives based on the price of gold? If this whole financial mess has been caused by the massive build up of leverage and counter party risk caused by derivatives, how is holding a derivative of gold going to help when the SHTF? Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted March 22, 2009 Report Share Posted March 22, 2009 Montana State Legislature considers return to gold, silver dollars "It further mandates that the state must accept payments in gold or silver for various fees and purchases" Where one goes others will follow. are they before or after georgia maybe the US can be saved http://www.greenenergyinvestors.com/index....st&p=102624 Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 are they before or after georgia maybe the US can be saved http://www.greenenergyinvestors.com/index....st&p=102624 How can this save the US? Making citizens pay their tax in gold or silver. They will get paid in devalued fed notes which they would then have to swop an ever increasing amounts of to pay their taxes. If they made it law that everyone had to conduct all business in gold or silver maybe, but not just their taxes. Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted March 22, 2009 Report Share Posted March 22, 2009 How can this save the US? Making citizens pay their tax in gold or silver. They will get paid in devalued fed notes which they would then have to swop an ever increasing amounts of to pay their taxes. If they made it law that everyone had to conduct all business in gold or silver maybe, but not just their taxes. because its the start of a return to sound money its a start but it will hopefully gain traction Link to comment Share on other sites More sharing options...
Steve Netwriter Posted March 22, 2009 Report Share Posted March 22, 2009 ^^ Do we still have the Notable Posts thing? Top post pixel8r i agree - very good post pixel8r, i agree with everything you said. I agree too pixel8r nice post. My cup+handle was not intended for trading; just for fun- it would be nice to see a run-up from here, that is all. I have no problem with trading some small amount of cash in a gamble, but that's what it is imo. A gamble. Not for core physical holdings at all. Sorry folks, I have little time to read so much these days, but yes, that thingy is still about http://www.greenenergyinvestors.com/index....st&p=102750 No time for a pretty certificate ! Link to comment Share on other sites More sharing options...
Pixel8r Posted March 22, 2009 Report Share Posted March 22, 2009 Sorry folks, I have little time to read so much these days, but yes, that thingy is still about http://www.greenenergyinvestors.com/index....st&p=102750 No time for a pretty certificate ! Thanks Steve Link to comment Share on other sites More sharing options...
Steve Netwriter Posted March 22, 2009 Report Share Posted March 22, 2009 About Seasonality I thought seasonality was due to Indian demand for jewellery varying through the year. When investment/safe haven demand becomes the dominant factor, seasonality becomes less important. I strongly suggest this article: Understanding Gold by Paul van Eeden http://www.usagold.com/gildedopinion/vaneedengold.html Link to comment Share on other sites More sharing options...
Steve Netwriter Posted March 22, 2009 Report Share Posted March 22, 2009 Thanks Steve :lol: Link to comment Share on other sites More sharing options...
electroweak Posted March 22, 2009 Report Share Posted March 22, 2009 How can they get ~300 Tonnes of gold a month? I think world ouput for Feb was about 100Tonnes, and this is just one ETF! SPDR Gold Trust holdings rise 11.31T to record 22 Mar 2009 - 23:03 TOKYO, March 23 (Reuters) - The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust , said holdings hit a record 1,114.60 tonnes as of March 20, up 11.31 tonnes or 1 percent from the previous day. For details on gold holdings by the ETF listed in New York and also co-listed on other exchanges, click on: http://www.exchangetradedgold.com/iframes/usa.php Holdings in the trust, which issues securities backed by physical stocks of gold, began climbing again in December as the global economic crisis spured demand for bullion as a safe-haven asset. . Date: Total tonnes March 20 1,114.60 March 19 1,103.29 March 18 1,084.33 March 16 1,069.05 March 15 1,056.82 March 12 1,041.53 March 11 1,038.17 Link to comment Share on other sites More sharing options...
sideshow Posted March 22, 2009 Report Share Posted March 22, 2009 You might be interested in this: http://etftracker001.blogspot.com/ Link to comment Share on other sites More sharing options...
Pixel8r Posted March 23, 2009 Report Share Posted March 23, 2009 How can they get ~300 Tonnes of gold a month? I think world ouput for Feb was about 100Tonnes, and this is just one ETF! Exactly, and what happens if they can't get supply, they are not going to stop the ETF being bought. The logistics of buying and transporting 300 tonnes a month is a fairly massive job. It would interesting if we could somehow calculate how much gold all the ETFs supposedly hold, also how much they collectively buy each month. Link to comment Share on other sites More sharing options...
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