• seperator

Mistakes can be fun and ‘profitable’

What is the point of buying the new palladium bullion American Eagle coin if we don’t think about what might happen to it in the future?

I recently met a reader who said he really loved my column. He began reading it when I made forecasts for the future. He said in the first one he had read I was mostly wrong.

Guilty as charged. I have had some notable forecast bloopers over the years. But readers won’t let me give up trying.

Why is that?

Perhaps there is some comfort in thinking that the future is somehow knowable.

Then again, perhaps it is entertaining to watch me squirm.

I am a professional.

However, anybody with a coin to flip can probably equal my record over time. It rarely gets too far above the 50-50 line, and on those rare occasions when it does, we can point to another year where it fell below it.

But there is no question we all are thinking about the future.

What is the point of buying the new palladium bullion American Eagle coin if we don’t think about what might happen to it in the future?

There is novelty value in acquiring something that no one else has owned before. At some point, though, we will want to sell it. Hopefully when that sales date approaches, it will be for a sum that is higher than cost.

Will it be? If I believe that palladium is going to be 30 percent higher next year, that might make me optimistic enough to take the plunge into something that costs about $1,000.

Certainly I will have to consider adding palladium to my annual forecasts.

But if there was a danger that I would feel downcast about my forecasting record, I read a story about the famous investor Warren Buffett who made a bet of $2 million that the performance over 10 years of an S+P stock index fund would beat any hedge fund manager who cared to take the wager.

Here we are just about 10 years on the head, and the hedge fund manager has thrown in the towel a few months before the end of the year, which concludes the 10-year bet period.

Buffet’s confidence in the S+P average was not misplaced. It did not simply edge out the best and brightest Wall Street can offer; it trounced him.

It was 7 percent annually for S+P versus 2.2 percent for the hedge fund.

I saw the story on the CNBC website, which you can read by clicking here.

I have to give the hedge fund manager credit, though – and there was only one who accepted the wager. He put his money where his mouth is.

That is something my annual forecast column does not require me to do. So I can keep repeating my mistakes, and readers can have the enjoyment of pointing them out to me.

 

This article was originally printed in Numismatic News Express. >> Subscribe today

 

More Collecting Resources

• Is that coin in your hand the real deal or a clever fake? Discover the difference with U.S. Coins Close Up, a one-of-a-kind visual guide to every U.S. coin type.

• Download The Metal Mania Seminar with David Harper to learn more about the metals market.

This entry was posted in Articles, Class of '63, Features. Bookmark the permalink.

Leave a Reply