(no subject)

[xthread]

I can't remember the precise day when I decided that I no longer needed to own every book that O'Reilly published. It was probably about when they published their third book on Oracle databases, and I had to admit that even though the books were quite good, I'd never be able to remember all that information, much less use it.
But I still keep track of when a publisher or an editor is so reliably on that I can recommend that someone buy anything they publish, much like I keep an eye out for artists and authors whose new work I will purchase sight unseen.
It is thus with a heavy heart that I must report that my current favorite intro-to-investing series has jumped the shark. I have always been of the view that Gold investors are basically crazy, since a bet on Gold is a bet that Civilization will Fall, and if Civilization actually does fall, trust me, you have more immediate problems than the state of your investment portfolio. To paraphrase a late 19th century economist, The Means Of Production is Where It's At.
And commodity investors are the next step further around the bend than gold-bugs. So I looked to the most recent installment of the Little Book, Big Profits series with some curiosity. Perhaps they would point out what it is that those Commodities people understand that I don't, that makes them not dangerously insane pessimists?
Sadly, The Little Book of Commodity Investing shows that no, those people really are looped. Whereas most of the Little Books series are very good introductions to a classic investment style, even the one by Ben Stein, Commodity Investing is an unmitigated puff piece, unsullied by resorting to actual arithmetic or, particularly, either logic or analysis. Frankly, the depth of their consideration goes about as far as People Always Want More!, but it doesn't even have the defense of being stoned when they said it. Yes, people do always want more, but that doesn't mean that they're going to give you money because you believe that.
For that matter, 200 pages of saying Commodities are a great investment! doesn't make it true - although, if you believe it does, Julian Simon may be interested in making a bet with you. Little Books Editors, shame on you!

Picoreview: Joe Bob sez Bad Clams, would not eat again

Comments

[angelbob.livejournal.com]

Right now a bet on gold is a bet that Civilization Will Fall. But sometimes it's just a bet that Women, Especially In China And India, Will Keep Paying For The Pretty, Or Men Will Pay For It On Their Behalf. And that seems like a less insane bet.

Right now, though, that's not the bet that gold represents. So you're totally right.

[kest]

No, that's diamonds.

[feyandstrange.livejournal.com]

The resale value of diamonds is generally shit, actually. You don't see advertisements for people to sell their diamonds for quick cash right now, do you? But the gold jewelry buyback mini-industry is making a tidy sum.

[kest]

This is because if they let there be any resale market for diamonds at all, the market for diamonds in general would utterly crash. Diamonds are only worth as much as they are because the industry has convinced us they're 'forever'. (And because more than a few of them are still dug out under the watchful eye of brutal warlords.)

[feyandstrange.livejournal.com]

Or it's a bet that the price of gold is going to skyrocket because of those Sky Falling types, or on industry knowledge. If I'd had anything to invest in gold back in early-mid 2004, I'd have made rather a good profit, even if I had sold it by 07. (I don't recall exactly when I was going "Damnit if I only had a couple thou to throw into gold right now!" but it was when the price was below $400, which it hasn't been since.) Also, I make some jewelry, so investing in a lot of 24K gold wire meant I could unload it later as reasonably pricey jewelry and get my investment back even if prices has dropped a bit. (And it was jewelers' suppliers raising their prices that tipped me off.)

That said, I generally think commodities are icky, with the possible exception of metals, and even then I wouldn't muck about with anything but gold or steel and only on nice sound estimates.

[jeffpaulsen.livejournal.com]

When I buy metals, it's a bet that OTHER people will bet that civilization will fall. So far that's worked out fine for me, albeit at a tiny scale.

The first time anybody tows a nickel-iron asteroid into an Earth-local orbit, that ends the metals game.

[xthread.livejournal.com]

Indeed. But the question is not 'is it making a profit,' the question is 'is it making more of a profit than investing in something else?'

Certainly human hysteria is not in any shorter supply than human foolhardiness in general..

[fungol.livejournal.com]

I have two words for you... "Uranium Futures" ;)

[xthread.livejournal.com]

That may be one of the most spectacular examples of the greater fool theory that I've heard in a while