Wednesday, June 1, 2011

Fun with Barry Ritholz

Barry Ritholz writes today:
Fun With Gold Bugs

An old friend swung by the office today to chat. She is a rather well known in certain circles, a savvy investor who has done very well with miners and precious metals.


We discuss the economy, inflation, markets, oil. Near the end of her visit, she proceeds to tell me that the paper money I have is worthless, and that Gold is the only currency of any value.

“May I see your purse?” I ask.

She hands it to me.
“And your wallet is in the purse?”

She pulls out the wallet.

I open it up, remove all her cash — about $1000 in 20s and 50s — and then toss it right in the waste paper basket.

“That’s worthless, right?”

She immediately sees my point, smirks, and to prove her point, gets up to leave — without the cash. As she heads out the door, she says, “I need cab fare.” and fishes a $20 out of the garbage.
Hey Barry, Do you know why she can walk away from the grand? Because most of her money is in gold.

Since you manage money, do you want to publicly display the 10 year performance of your managed funds against the price of gold? Let me know. I'll publish the results anytime,

8 comments:

  1. What Barry did is akin to telling a resident of the Soviet Union that, if he doesn't believe communism works, he should starve rather than eat his paltry ration of food grown on collectivized farms.

    The dollar isn't valued because it is good money. It is valued because it is granted special privileges over actual good money, privileges that are backed up by the big guns of the U.S. government.

    Remove those privileges and we'll see how valuable your paper dollars are, Barry. In fact, we might find out regardless, as one-note Bernanke keeps turning to the printing press as his only solution to every fiscal and economic ailment.

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  2. I stopped reading Ritholtz' blog a long time ago. Thank you for reminding me why.

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  3. "Hey Barry, Do you know why she can walk away from the grand? Because most of her money is in gold.

    Since you manage money, do you want to publicly display the 10 year performance of your managed funds against the price of gold? Let me know. I'll publish the results anytime,"

    +1 well put!

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  4. It isn't worthless...but certainly worth less than it used to be. I don't hold 'em.

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  5. "has done very well with miners and precious metals."

    What does that mean, "done very well"? By what measure?

    Presumably as measured in dollars?

    But didn't she say the dollar is worthless?

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  6. Wow, Anonymous, you just divided the level of conversation by one thousand. So typical of a paper bug.

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  7. I also stopped reading his blog. Some of his posts show no real deep thought and research. I think it's more of a Twitter version of a blog.

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  8. @Anon 2:15

    The proper measure is purchasing power. As in, how much gold does it take to buy a loaf of bread today as compared with X years ago, versus how many dollars it takes today as compared with X years ago.

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