wearmanyhats

Metals

For those of you who don’t read archives, you missed a couple of good questions from one of my regular readers, David, on how to buy metals.  GLD and SLV is the ETF way to buy the yellow and silver.  But platinum and palladium can be bought in gold bars and are way below their highs.  There is no reason to buy them in coin form, though if nothing else is available, then that’s fine.  Just make sure you buy from a reputable dealer and not a salesman.

How do you know if they are reputable?  Well, first off, don’t go to a coin solicitor, go to a good old fashioned coin shop.  Second, resolve yourself that there are not many dealers out there, mostly because of the huge amount of financial outlay that needs to happen.  Most are in big cities, otherwise they are paying another premium to the regional dealers.  I developed a relationship with mine by showing up and periodically buying.  My kids also buy.  I ask questions about something I want to purchase down the road.  But I never do this with a transient salesperson.  I found out who was the owner and didn’t pester him when he was busy.

I also take immaculate care of my coins so they command a premium when I come to sell.  That helps.  I don’t follow rare ones, though he has occaisonally told me about ones that are down momentarily in value.  And as discriminatory as this sounds, I make sure the commpany has been  in business for a while. Though I have done selling with younger businesses, I don’t bother with a relationship with them right now.  They could run right out of cash flow when buying and selling gets crazy.  And it will.

Consider coins for silver and gold, bars for eveything else.  The reason, consider if we were suddenly invaded.  If you had to grab slver to buy bread, every common man would understand silver.  If you grabbed a pretty platinum coin, a common person wouldn’t understand its value.  The same is true with palladium.  Why pay a premium for the beauty of the coin?  Let me know if anyone has any more questions.

 Mania;

You gotta love the drama playing out in Washington.  Someone is in crisis:  in walks the Federal Reserve chairman with the white cowboy hat to save the day, and suddenly the town sheriff comes in with a, “Hold on, Pardner!”  Poor guys who have spent hours trying to hammer out this deal only to sit for hours answering questions to the purse string holders.  Imagine the people on Wall Street and the stress they must be under!

The craziest thing is that the Senators and Represenatives are finally listening to the American public.  And the American public is wanting a good thrashing for all of those people on Wall Street that are going to walk away with millions no matter what!  Don’t you wonder a bit about all of this?  Millionaire Senators and Representatives scolding millinaire Wall Street execs in hopes of impressing average income people.  Interesting! It’s like the fox watching the henhouse.  And you have to wonder if all of these hearings are legitimate.

It will be tough to go after execs retroactively for this mess.  Putting controls or legal punishment on execs in the future may not be in the best interest of growing our businesses in this country.  Providing better regulation for some of these creative derivitives would be prudent. 

Rather than tying the pay to what other people make, perhaps compensation dependent upon the net profitability of the company makes more sense.  Either way, it should be interesting to see what all of these smart minds put together.

Morality:

 National Public Radio explored whether or not we are in this financial mess in this country because of greed. It was the flavor of the week for them:  blame the mess on greed.

Not once did they explore other reasons why people would mortgage their houses for more practical reason, such as a sudden and long job loss, or medical expenses, or to get their kid through college.  Not once did the NPR speaker acknowledge why “flippers” took on risk to create their own wealth.  The truth is, the common man would like to retire and not worry about money in his/her old age.  Flipping houses are a way to acquire enough to take care of you in your old age.  You sure aren’t going to get far ahead on minimum wage or even $10/hr. 

Instead greed was identified as the reason we are in the national state of financial chaos.  No one would dispute that some people were greedy.  But what about those who were not? And isn’t wanting a decent nest egg a worthy goal?

No matter what, let’s hope the lessons learned here will not come with a terrible price.

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