B-School Tuition money evaporating

See toga, I know that if you were to live in UK you would think in Sterlings, but as you may head to US, your tuition money is not evaporating

I'm just "kidding" here, but there are still some house markets that are very attractive to invest. Brazil, for instance, is booming, especially in Sao Paulo.

Well...with the market down huge...again...my savings took another hit (probably to the effect of a couple of text books next year).

the general equity markets might be entering a bear market. if the federal reserve doesn't take drastic measures in significantly lowering rates to meet market expectations, expect brutal sell-offs down to the DOW 10k level. there will be rallies here and there of course, but expect a very volatile 2008. massive amounts of liquidity need to be injected into the financial system in order to stave off a great depression scenario. with the credit markets seizing up and other derivatives and bond insurers like MBIA and Ambac about to blow up, it is going to get real ugly real fast unless some surprising measures are taken by the FED in order to inject confidence back into the system and flood it with massive amounts of liquidity. of course, all this liquidity is inflationary and that is excellent for commodities, especially precious metals like gold. the dollar will drop even further, while gold takes out $1000+ in this type of environment. based on Bernanke's past remarks, the FED is willing to risk inflation to prevent deflation at this point. and even if the markets react positively and run to new highs over the next couple of years, it still won't matter as the value of the dollar crumbles. just look at the performance of the German stock markets during the Weimar Republic or the present situation in Zimbabwe. yes, these are extreme examples. but, when money can be printed out of thin air, as in the case of the dollar and other fiat currencies, this creates inflation - an increasing amount of paper chasing a fixed amount of goods and services.

in this type of environment, and even during a stagflationary one like we are in at the moment, you want to buy gold bullion. or, buy GLD, the exchange-traded-fund (1 share is equivalent to about 1/10 ounce of gold + transaction costs). if you want more leverage (and hence risk) to gold's price moves, then you can buy gold mining and exploration companies, but you have to be very selective. the biggest large caps that institutions like are ABX and NEM. then, you have great growth companies like GG and AUY. some other decent companies that exhibit good leverage to rising gold/silver prices include: SLW, KGC, GOLD, RGLD and AEM. or, you can buy a precious metals fund, which takes care of the stock selection, such as Vanguard's.

check out wikipedia for some easy reading:

https://en.wikipedia.org/wiki/Gold_as_an_investment

for some more in-depth reading, check out the following report:

https://www.traderview.com/economiccomme ... sMoney.pdf

this is about protection of purchasing power, and that is what gold does. gold has ceased to function as a regular commodity and is now functioning as a currency. if you own dollars, you have been losing over 30% of purchasing power since 2000. even with the stock market gains from 2003-2007, gold has significantly outperformed general equities.



source: https://home.earthlink.net/~intelligentb ... dow-au.htm

in my opinion, this bull market in gold is nowhere near over. when everyone begins talking about gold and gold stocks at parties, dinners, etc., then you know it's time to probably sell. but, it's quite possible that gold doesn't crash in price and stays fixed at a level much higher than here, should the dollar decline so much in value. if that happens and if the united states wants to maintain its global hegemon status and dollar as the reserve currency, they will have to back the dollar with gold not via convertibility, but via the balancing of existing gold inventory in reserves to the expansion/reduction in the money supply.


[disclaimer: of course i am long gold and gold stocks]

Everyone is harping on about gld, so after an initial spike from amateur investors, the pro's will take the profit causing the amateurs to follow suit (through panic) and then re-buy gold ata more affordable price causing a potential whipsaw. This can make gold quite volatile when the market reaches this point?

Surely a safer market would be other sources of raw materials such as copper which is in high demand due to the expanding economies of India and China?

disclaimer: i don't know what i am talking about

IMHO, commodities are inherently volatile and this is NOT a good idea for a short-term investment strategy. and neither are stocks if your investment horizon is anything less than 5 years.

https://www.youtube.com/swf/l.swf?video_ ... 1&border=0

err..."we're sorry this video is no longer available?"

I can see it...

Anyway, I will save it and let an rapidshar link, it's very funny...

gold has finally gotten some respect by the mainstream press lately b/c it has broken all-time price records. typically, such an event is met with skepticism that the move cannot keep going. however, the fundamental drivers and technical picture behind gold's price presage much higher prices over the next few years. gold will challenge the $1000 price level, and probably the $2000 level. whipsaws are very common in this market. that's why it's best to own some gold bullion or GLD and forget about it. they are the least volatile compared to playing the futures market and precious metals equities. gold is simply an insurance policy, and the premium is rising.

copper is just as volatile as gold, if not more. FCX is your "go to" stock for a copper play. the demand for copper is susceptible to a slowdown in economic activity and thereby reducing prices, whereas gold is not necessarily. the BRIC demand for copper and other base metals will remain strong going forward over many generations to come. because gold serves as a barometer for inflation and a safe haven asset, there are various factors at play supporting the gold price unlike copper.

agricultural commodities are probably another way to hedge your bets, as food prices will continue to increase for many years to come. check out the DBA and MOO exchange traded funds. there are several others to pick and choose from.

what isn't volatile these days?!

if you were given the task of putting $25k to work in order to generate positive absolute returns over the next 6-12 months, what would you do with it?

4.65% in a prime money market fund or 3.65% in tax-exempt short term munis. but then, i'm rather risk averse

I've Found it, sorry for the previous link, it is indeed broken.

https://www.youtube.com/watch?v=PISjq4UTG-E

well, those would be bad bets if the financial system implodes and/or MBIA/Ambac go bankrupt and can no longer insure those muni bonds.

might want to just stay in cash if you're completely risk averse, except spread your bets by buying some spot forex in euros, loonies, and/or swissies. maintain 50% in your home currency.

Oh Ambac and MBIA *are* going under IMO, in any case when that does happen I expect yields on short term munis to actually go higher. Moreover, I think it's pretty unlikely that any state/local government is going to default on a 6 month - 2 year maturity bond.

yeah, if the gov't defaults in the next 2 years, then we (as in people in the US) are screwed anyways. Not getting my 4.65% interest will be the least of my worries. Actually, if that happens, the world economy will probably be adversely affected, creating an "everyone loses" situation.

yea, a us government default is pretty much armageddon. might as well forget about the mba if that happens, and head for the caves.

did everyone catch this?


https://www.cnbc.com/id/15840232?video=624755222


talk about airing out wall street's dirty laundry live on national TV!!!