Author Topic: John Embry Suggests Munger is Not Rational  (Read 14243 times)

Swizzled

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John Embry Suggests Munger is Not Rational
« on: December 29, 2010, 06:17:06 AM »

Apparently John has some pair on him.  If Munger isn't rational then there is no human that is.   Here is his article, I think the run in gold/silver has gone to his head

http://www.gurufocus.com/news.php?id=118330


gurjot

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Re: John Embry Suggests Munger is Not Rational
« Reply #1 on: December 29, 2010, 08:39:00 AM »
i think at the end of the day , everyone talks their own book .  it doesnt matter who it is!  i personally been a holder of brk, ffh from last 10 years and holder of gold equities from last 6 and have done fairly well. in this instance i agree with john that US will print more money and i intend to play that trade by buying and holding gold until i see otherwise.

oldye

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Re: John Embry Suggests Munger is Not Rational
« Reply #2 on: December 29, 2010, 10:48:37 AM »
Gold is still a great buy if you don't worry about the dollar value of your investments

Parsad

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Re: John Embry Suggests Munger is Not Rational
« Reply #3 on: December 29, 2010, 11:08:41 AM »
Gold is indeed in a bubble.  How long and how far it goes, I don't know.  Just over Christmas weekend, I found out that one of my cousin's sold some of her gold jewellry to a friend.  The friend decided he wanted to create another source of income for himself, and is buying and selling gold and scrap gold.  This guy has no clue what he is doing.

The same sort of thing was happening right before the tech wreck and right before the collapse of the housing bubble.  When the common man becomes interested in an idea, it certainly is by no means a unique idea any longer.  I remember a friend who lost 80% of her nest egg by buying all sorts of bloated technology stocks in late 1999 and early 2000.  I know several people in the U.S. who have lost nearly everything because they were leveraged and had several rental properties with large mortgages.  Now I'm meeting alot of people, even on this board, who think that the U.S. dollar will be worth much less while gold will continue to increase.

It all reeked the same at their corresponding times.  But there was no convincing anyone of that.  Both times there were people telling Buffett & Munger how this time it was different.  Yet it wasn't.  It could be three weeks, three months, or three years...I have no idea.  But I think investors holding gold today will find themselves at the wrong end of the bargain.  But hey, I thought "rap" was a fad twenty years ago and I've been proven wrong!   ;D  Cheers! 
No man is a failure who has friends!

Myth465

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Re: John Embry Suggests Munger is Not Rational
« Reply #4 on: December 29, 2010, 11:15:28 AM »
Parsad I agree with everything you wrote, except for your thoughts on rap.

premfan

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Re: John Embry Suggests Munger is Not Rational
« Reply #5 on: December 29, 2010, 11:41:43 AM »
In the tech bubble fundamentals were non existent. In the real estate bubble supply vs demand balance was off. Currently gold is fundamentally sound( Us money printing) and supply is low. Gold will be strong until gold supply outweighs gold demand or the U.S. and the world turns off there printing press. Granted gold is a speculation not an investment. Gold will be in a bubble and reach parabolic levels dont think we are in it now. I have a bit of my portfolio in mining companies understanding its  speculation not an investment.

Bronco

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Re: John Embry Suggests Munger is Not Rational
« Reply #6 on: December 29, 2010, 11:49:04 AM »
I don't know how to trade gold but I do believe the dollar will be worth less and less.

In the US, we face a tough, tough dilemna.  We want to provide good health care to seniors, and it comes at a giant cost (economic).  Really, enough to bankrupt the nation. 

But how do you tell a senior that you (the government) won't pay for their life extending medications.  Political suicide.  Can't be done.  So we rack up bigger and bigger debts.

The only way out is to print more money.  That is my opinion, but I don't see the alternatives.  So the dollar will decline. 

The only potential other solution is mass immigration and a related increase in economic activity.  But this comes with its own problems, including future support of their health care, current costs of new citizenship, etc.   

None of this may explain the price of gold, but again, I believ e it will explain the decrease in USD purchasing power.

oldye

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Re: John Embry Suggests Munger is Not Rational
« Reply #7 on: December 29, 2010, 12:04:26 PM »
In many important ways the value of the U.S $ has gone up and is going to keep going up. Japan shows that high debt loads compared to gdp can lead to long periods of low interest rates and ever increasing value compared to other currencies.  Unless we're in for a period of increased trade barriers we probably won't see inflation. 

Zorrofan

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Re: John Embry Suggests Munger is Not Rational
« Reply #8 on: December 29, 2010, 12:07:18 PM »
I think of gold as insurance rather than an investment or speculation. Bronco nailed it - gold will continue to rise as long as the dollar falls. The dollar will fall until congress figures out how tro deal with the whole deficit/debt/taxes/entitlement issue. If you have the conviction that Congress will deal with the problem - and quickly - stay away from gold. If you think there will be ten more years of trillion dollar deficits then gold looks to do okay. Embry & Sprott have done fairly well the past ten years with gold.


cheers
Zorro

Uccmal

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Re: John Embry Suggests Munger is Not Rational
« Reply #9 on: December 29, 2010, 01:14:06 PM »
I have problems with gold and John Embry.  John Embry has been a gold bug and talking up gold the entire time I have been investing - 15 years.  He finally gets to be right.  Lets hope he has the where-with-all to bail before its all over.

Problems with Gold itself:  
- as an inflation hedge it is weak at best.  
- you cant define a value for it.  I can put a rough value on my stocks.  So, how do you know when its undervalued, fairly valued, or overvalued.
- the US dollar is going up, not down, relative to other currencies, excepting the commodity currencies where it is more or less stable.  
- every time there is a mini-panic there is a run to US treasuries.

I personally think gold has a way to run in this 'bubble' because that is what bubbles do, but I wouldn't touch it with a barge pole.  
GARP tending toward value