So we should only measure since 1971 ? Here is a chart of Gold and the S&P 500 price level performance since 1971. Gold is doing 85% better. :-)
Gold = Green S&P 500 = Blue
Posted on 01/20/2006 12:28:41 PM PST by SierraWasp
2:01PM Dow turns negative for 2006 ($INDU) by Tomi Kilgore
NEW YORK (MarketWatch) -- The Dow industrials ($INDU) was last down 173 points at 10,707, and has turned negative for 2006 for the first time. It closed out 2005 at 10,717.50. The Dow has now lost 336 points since closing at a 4 1/2-year high on Jan. 11, and is on course to close at its lowest level since Nov. 16.
So we should only measure since 1971 ? Here is a chart of Gold and the S&P 500 price level performance since 1971. Gold is doing 85% better. :-)
Gold = Green S&P 500 = Blue
Sorry, it was a joke.
What do you think, does gold have to revert to a ratio of 3 to 1 vs the DJIA?
Yeah but not my much. If you had invested in Gold and the S&P 500 in 1971, the investment in Gold would have offered a better return than the S&P 500 with dividends re-invested until around 1991. Furthermore, if you go back from today 1,2,3,4,5,6,7, or 8 years, Gold has outperformed the S&P 500 with dividends re-invested.
What do you think, does gold have to revert to a ratio of 3 to 1 vs the DJIA?
No, I don't think it has to do anything. It would not surprise me to see it anywhere from 10 to 1 to 1 to 1 in the next 10 years though.
I should charge good money, she never fails.
Here's the 5 year chart.
And here's the yield.
S& P Earnings: 1960-CurrentCalculated based upon earnings yield and S&P 500 levels each year. The raw data for this table was obtained from Bloomberg.
| Year | Earnings Yield | Dividend Yield | S&P 500 | Earnings | Dividends |
| 1960 | 5.34% | 3.41% | 58.11 | 3.10 | 1.98 |
| 1961 | 4.71% | 2.85% | 71.55 | 3.37 | 2.04 |
| 1962 | 5.81% | 3.40% | 63.1 | 3.67 | 2.15 |
| 1963 | 5.51% | 3.13% | 75.02 | 4.13 | 2.35 |
| 1964 | 5.62% | 3.05% | 84.75 | 4.76 | 2.58 |
| 1965 | 5.73% | 3.06% | 92.43 | 5.30 | 2.83 |
| 1966 | 6.74% | 3.59% | 80.33 | 5.41 | 2.88 |
| 1967 | 5.66% | 3.09% | 96.47 | 5.46 | 2.98 |
| 1968 | 5.51% | 2.93% | 103.86 | 5.72 | 3.04 |
| 1969 | 6.63% | 3.52% | 92.06 | 6.10 | 3.24 |
| 1970 | 5.98% | 3.46% | 92.15 | 5.51 | 3.19 |
| 1971 | 5.46% | 3.10% | 102.09 | 5.57 | 3.16 |
| 1972 | 5.23% | 2.70% | 118.05 | 6.17 | 3.19 |
| 1973 | 8.16% | 3.70% | 97.55 | 7.96 | 3.61 |
| 1974 | 13.64% | 5.43% | 68.56 | 9.35 | 3.72 |
| 1975 | 8.55% | 4.14% | 90.19 | 7.71 | 3.73 |
| 1976 | 9.07% | 3.93% | 107.46 | 9.75 | 4.22 |
| 1977 | 11.43% | 5.11% | 95.1 | 10.87 | 4.86 |
| 1978 | 12.11% | 5.39% | 96.11 | 11.64 | 5.18 |
| 1979 | 13.48% | 5.53% | 107.94 | 14.55 | 5.97 |
| 1980 | 11.04% | 4.74% | 135.76 | 14.99 | 6.44 |
| 1981 | 12.39% | 5.57% | 122.55 | 15.18 | 6.83 |
| 1982 | 9.83% | 4.93% | 140.64 | 13.82 | 6.93 |
| 1983 | 8.06% | 4.32% | 164.93 | 13.29 | 7.12 |
| 1984 | 10.07% | 4.68% | 167.24 | 16.84 | 7.83 |
| 1985 | 7.42% | 3.88% | 211.28 | 15.68 | 8.20 |
| 1986 | 5.96% | 3.38% | 242.17 | 14.43 | 8.19 |
| 1987 | 6.49% | 3.71% | 247.08 | 16.04 | 9.17 |
| 1988 | 8.20% | 3.68% | 277.72 | 22.77 | 10.22 |
| 1989 | 6.80% | 3.32% | 353.4 | 24.03 | 11.73 |
| 1990 | 6.58% | 3.74% | 330.22 | 21.73 | 12.35 |
| 1991 | 4.58% | 3.11% | 417.09 | 19.10 | 12.97 |
| 1992 | 4.16% | 2.90% | 435.71 | 18.13 | 12.64 |
| 1993 | 4.25% | 2.72% | 466.45 | 19.82 | 12.69 |
| 1994 | 5.89% | 2.91% | 459.27 | 27.05 | 13.36 |
| 1995 | 5.74% | 2.30% | 615.93 | 35.35 | 14.17 |
| 1996 | 4.83% | 2.01% | 740.74 | 35.78 | 14.89 |
| 1997 | 4.08% | 1.60% | 970.43 | 39.56 | 15.52 |
| 1998 | 3.11% | 1.32% | 1229.23 | 38.23 | 16.20 |
| 1999 | 3.07% | 1.14% | 1469.25 | 45.17 | 16.71 |
| 2000 | 3.94% | 1.23% | 1320.28 | 52.00 | 16.27 |
| 2001 | 3.85% | 1.37% | 1148.09 | 44.23 | 15.74 |
| 2002 | 5.37% | 1.83% | 879.82 | 47.24 | 16.08 |
| 2003 | 4.87% | 1.61% | 1111.91 | 54.15 | 17.88 |
| 2004 | 5.53% | 1.60% | 1211.92 | 67.01 | 19.407 |
Last Updated on January 5, 2005
By Aswath Damodaran
Hence my reference to price level performance. Like I said in post 104 as well, Gold has outperformed the S&P 500 returns with dividends for the past 1,2,3,4,5,6,7, and 8 years running.
Thank you for the correction
Bin Laden threats is what I was intended to state but out came
The Butcher of Underpants.
It is not a way of saying Gold went up a lot last year. It is saying Gold went up alot last year, the year before, the year before that, and so on back 8 years.
Gold is a dog that occasionally has a pop when the dollar falls or there is a reasonably serious security scare.
In the past 5 years Gold is up 115%. That is more than an occassional pop.
Pick a better index to compare it with (e.g. midcaps) and it hasn't.
If you really want to start comparing indexes take a look at this chart. It is the Gold Miners Index HUI (green line) against indexes for small cap (dark blue line), large cap (light blue line), oil (red line), housing (pink line), banking (purple line), and retail (dark green line) going back to August 2002 when the Philadelphia Housing Sector Index was started. The Gold Miners Index has outperformed these other indexes by 33% to 129% since August 2002.
In the long run gold tracks inflation, nothing more. It just tends to pile that all into short bursts followed by long dead stretches. That makes it a decent occasional inflation or currency-depreciation speculation, for those willing to try to time it and bet on its turns. But it is not an investment, never has been, never will be. And the average person playing in the gold market is going to get a real after tax return of zero if he is lucky, in the long run.
Where do you get 100% in the past 2 years for mid caps ? Both the Russell and S&P Midcap Indexes are up 30% in the past 2 years. Your arguments don't hold water when your numbers are so far off.
In the long run gold tracks inflation, nothing more. It just tends to pile that all into short bursts followed by long dead stretches. That makes it a decent occasional inflation or currency-depreciation speculation, for those willing to try to time it and bet on its turns. But it is not an investment, never has been, never will be.
Just because you keep repeating never does not mean you are correct. Gold has outperformed the S&P 500 with dividends re-invested the past 5 years.
Gold = Green S&P 500 = Light Blue S&P Midcap = Dark Blue
The chart above just reflects Gold the commodity. Gold miners are leveraged to the price of Gold. The Gold Miners Index HUI has outperformed the S&P 500 and S&P Midcap Indexes by 450% to 500% the past 5 years.
Gold Miners Index HUI = Green S&P 500 = Light Blue S&P Midcap = Dark Blue
And the average person playing in the gold market is going to get a real after tax return of zero if he is lucky, in the long run.
In the long run all investment vehicles have periods of superior and inferior returns. People "playing" in investment markets will be lucky to get a return of zero over the long run in any market. However, if you are not "playing" but investing with knowledge, all markets at one time or another can offer superior returns. I disagree with your blanket negative statements regarding Gold and Gold Miners. Both of these investment vehicles have offered superior returns going back almost 8 years now. We are in a period of time where investing in tangible commodities and their producers offers the best returns. Oil, Natural Gas, Gold, Silver, Coffee, Wheat, Cattle, and many other commodities have been in a bull market going on 5+ years now. The two main reasons behind this is our government's increase of the money supply faster than economic growth and the emergence of India and China as economic growth powerhouses. As wealth spreads through these two economies, their large populations will continue to demand more and more of the limited supply of tangible goods the world can supply. Gold is but one of these tangible items.
On midcaps, SP extended market index fund from 2nd quarter 2003 to now, inclusive, is up 2x. Oh and 5 years ago is a bear market, again endpoint selection. If you let me pick a bad starting point for the rival and a high endpoint of the plugged item, I can make anything on earth look good for one snapshot period.
As for commodities generally, long term they are the worst dog in the manger. They do well at specific inflation-hedge or currency depreciation times, which are narrow time windows and tend to be step functions. Anybody who wants to speculate on calling such turns is perfectly welcome to try. Anybody who puts their wealth in gold and leaves it there long term is being stupid.
And it doesn't matter how many times you repeat yourself or post the same lame chart, it is still a stupid long term investment that will never keep up with overall economic growth on any extended time scale. For the obvious reason, it makes nothing, all it does it grab back a little of what monetary authorities take away when they inflate. (So does interest, it isn't saying anything).
What symbol does this fund trade under ? Care to post a chart ?
The past 5, the past 5, the past 8 - it is all one endpoint and that dominates every one, they are all saying the same thing. Gold is higher right now than recently.
Thank you for providing the definition of a bull market.
Anybody who wants to speculate on calling such turns is perfectly welcome to try. Anybody who puts their wealth in gold and leaves it there long term is being stupid.
Please define long term ? Is it 5 years ? 10 ? 20 ? 30 ? Anyone that leaves wealth in ANY investment vehicle long term without periodically analyzing economic conditions and the investment's performance is stupid.
You can focus on your undefined long term all you want but it is clearly demonstrable that over the past 1,2,3,4,5,6,7, and 8 years Gold has ouperformed the S&P 500 with dividends re-invested. Believe it or not, stocks do experience extended periods of flat or negative performance. The chart below is the chart of The DOW going back to 1929. As can be seen in the chart, between approximately 1966 and 1984, the performance of the DOW was flat. It took 16 years for the DOW to break out to significant new highs.
And it doesn't matter how many times you repeat yourself or post the same lame chart, it is still a stupid long term investment that will never keep up with overall economic growth on any extended time scale.
Lame charts and stupid long term investments? Please try posting a chart or symbol that verifies your statements. Stop relying on hyperbole and insults to communicate.
“Stocks have reached what looks like a permanently high plateau.”
-Irving Fisher, Professor of Economics, Yale University, 1929.
Yada, yada, yada... right??? (Dow's making a come-back as I type this)
Seems to me you two are arguing over the wrong natural resource/commodity, anyways. (grin)
3:24 Euro at $1.2307
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