I won’t be posting this week. I don’t get much break if at all. I decided I will just take a break. I will be back posting next Tuesday, January 1st 2008. I will see you next year. Some of my previous posts from last week are pre-written. In case you find them out-of-step with the market, just move the timing by one to two weeks earlier.

In any case,

Happy New Year. May you all have a prosperous year.

Frugal

I have been contemplating on buying more physical gold/silver coins. Interesting emotions emerges when I visualize myself with the coins, having the actual price in mind. A gold coin would be costing me about $825, while a silver coin would be costing me about $16. The weights are the same, while the size of gold coin would be about 25% smaller in diameter (due to the difference in specific weight).

I kept thinking, “Geez, this tiny thing (gold coin) really costs.” While for silver coin, my first feeling is that it’s a pretty reasonable price if not cheap. I’ve seen many wild claims from gold bulls that gold is going to $2000+ or even $5000. I took their words without thinking. But those claims are based upon the BUBBLING price of $850 back from 1980. From the following historical chart of gold price,

I’m tempted to say that a “reasonable fair” price would be about $140 (roughly mid-point of $180 and $100) from 1975 to 1978, that will give an inflation-adjusted price of $536.84, based on Fed’s inflation calculator. If I tack on an extra 0.5% under-estimate of CPI annually, the price becomes $629.73. If I tack on an extra 1% under-estimate of CPI annually, the price becomes $738.12. Whatever mark-up you want to apply, it certainly appears that the current gold spot price is trading above the “fair” price. It means that gold is not as cheap as before. But it also means that the gold bull market is definitely in motion, and that the second phase of gold bull market is most likely upon us.

Another corollary from this, silver will always be the “poor man’s gold”. It will always rise more in percentage, simply because it is cheaper in absolute price, and it has similar monetary values like gold.

No regular post today. I hope everyone has a happy Xmas.

This is a family time to get together with your loved ones, excluding your computer.

Best regards,

Frugal

Health or career or money or family? What should one choose if one cannot get everything? Life is always imperfect (click to read my only unpopular astrology post). On the other hand, if you don’t have much money or other areas, you probably have something else more than others. You are bound to have something good.

Anyway, so I told my doctor that I do like 3 jobs everyday:
1. From about 5 or 6am to 8 or 9am, I trade and invest stocks. Read all kinds of financial news.
2. From about 8 or 9am to 6 or 7pm, I commute and work at a full-time job that pays the bill.
3. From 7pm to 10 or 11pm, it’s my short family time.
4. From 11pm to 12am or 2 am, I blog.

Most of the time I just get 4 to 6 hours of sleep. Six hours of sleep is just GREAT for me. I can’t remember when was the last time that I sleep for 8 hours.

My doctor’s advice to me:
1. REST more.
2. RELAX more.
3. Exercize more.
4. Eat out less (so that I don’t take in too much salts).

Yes, I’m certainly too young to have high blood pressure. Not sure what the solution is. I never run out of ideas, but I always run out of time. REST & RELAX? Those are precious commodities to me.

I am going to start on number 3 first. I’m already doing number 4, because everyday I’m usually so busy at work, that I bring my own lunch, and finish my lunch on my desk within 10 minutes. When most people is out there enjoying their lunch, I’m watching my stocks, or multi-tasking through my work to speed up the progress, or usually both. I often do 3 things all at once anyway. So no big deal there.

I bought a blood pressure measuring device. After a few times, I stopped using it. It just doesn’t tell me the answer that I want to hear. It’s always high and never low. Isn’t that bad?

Boy, I need a good vacation.

I subscribed to other newsletter before at Casey Research. It was pretty decent. But the Big Gold newsletter was a little disappointing, given my previous experience with other Casey Research newsletter. Like many other newsletters out there, there are more talks than analysis. Especially since it’s a gold newsletter, getting into all doom and gloom is simply just too plain.

Unfortunately, I must say that in my short period of subscription, the newsletter did not inspire me. Therefore I’m dropping it.

I do encourage anyone to give it a try. There is a free trial period for full refund, and it never hurts to get more opinions (as long as you have a clear head).

You can try their subscription here. And if you have other opinions, again, please leave your comments. My opinions are solely my own, and may or may not be suitable for every individual.

It’s quite hard to find very good gold newsletter. There goes out another one. I tried to contact Frank Barbera on his gold newsletter. But apparently emailing him three times is just not enough. I got a reply after some 3 months of my first email. And no replies afterwards. His email box is probably full of several thousand emails, I am guessing.

Are there any good mechanical engineers out there to join me for a new invention?

Video-taping my children has become a pain in the arm. I have thought about this a couple of times. If a person can mount the camcorder on the shoulder (probably not on the head due to a weird feeling), one can easily record videos with very few physical efforts. Of course, the biggest problem is that when you move and walk, the video quality will be terrible. But I think I may know how to solve that.

The answer is similar to those anti-noise earphones, where it cancels high noise. I’ve learned that trick in my senior year in college. That’s very old technology. Definitely decades ago.

Anyone out there, care to brain storm a little?

Thanks to the reader westwest888, here is the Xmas party information for Freddie Mac. After losing billions of dollars and diluting shareholders’ stake, the GSE (government-sponsored enterprise) is throwing a Xmas party at the Ritz Carlton, McLean, VA.

I wonder how shareholders will receive this. Oh, and it’s in your S&P500 ETFs too.

Here is what westwest888 sent me:

It’s not a news story; it’s something I witnessed personally. Freddie Mac lost $2B last quarter and plans to lose another $2B next quarter on $9B in revenue (20% losses). To celebrate, they threw a decadent holiday party at the Ritz Carlton in exclusive McLean, VA. They had a laser printer that printed pictures on chocolate lollipops for the kids, hors d’oeuvres, entertainment. You’d think it was the Goldman Sachs partners dinner. Alas, it was a Government Sponsored Enterprise pissing away money right before they’re going to need a taxpayer bailout.

What a surprise! Or maybe not. I called up a local coin store. They had really good price. But they don’t have ANY silver coins available. Except the really big dealers like monex.com, I couldn’t get the silver coins that I wanted.

The store owner told me that silver coins have been in short supply for several months already. They have zero inventory. And even gold coins are first-come-first-serve basis. I asked the owner when I can call back to get my hands on what I want. And I was told that he does not know possibly when he will have anything for me.

Another thing that I’ve noticed is that Kitco’s silver prices are SO MUCH higher now. The premium over spot if I remember correctly didn’t use to be this high. Their silver coin prices are “no longer competitive”, well, that is assuming that you can find a piece of it. Kitco’s price is about 5% higher (or about $1 higher per silver eagle coin). That’s simply ridiculuously high.

I don’t know what’s wrong out there. But apparently there is some physical shortage. I’m guessing that all the smart money is buying ahead of the upcoming big wave of Fed interest rate cuts. I’m still watching, but I’m quite tempted to just jump into the market based on what I’ve heard from this store owner.

Naysayers will be wrong.

The patriotic supporters of Ron Paul have joined hands and broke a new record in US history for the biggest donation day online. Today is the tea party day.

Ron Paul is certainly the most knowledgeable candidate on economics, and have debated with Bernanke several times. He is probably the best candidate that you can vote for, for a long term bullish US stock market.

Alright, I will be going back to my regular personal finance/stock market blogging.

Folks,

Five hours left on the celebration of Tea Party 2007. Ron Paul and the supporters have raised over 4 million dollars in the last 17 hours. It’s really not too late to join this Ron Paul movement. And it is never too late to be part of the American History. We are making history today, and will surpass previous record of 4.3 million dollar.

If you don’t know who Ron Paul is, you’d better find out now. The Ron Paul supporters will have close to 100% voter turnout, while all the rest of candidates will be as apathetic towards politics as before. Why are Ron Paul’s supporters so enthusiatic about him? There must be some good reasons. Don’t be agnostic and apathetic anymore. Stand up, and save the country together. Even if Ron Paul does not make it all the way, collectively we stand together and make our voices heard TODAY.

I have made my third campaign contribution today, and ‘m going to make my fourth campaign contribution once more today. The average contribution size by Ron Paul supporters ranges from $80 to $150. And obviously I myself have not exceeded the cap of $2300 for a single candidate yet. The small amount of money from the mass of people have spoken. No one can raise 4 million dollar plus alone. We must all stand up and fight.

Last call to donate at Ron Paul’s site to be part of today’s American History. No, we the Ron Paul supporters, are not crazy. We are so patriotic and so in love with USA. We care so deeply about the fellow citizens that we are willing to spare our money for an idealistic purpose that may seem to be impossible, but yet becoming more real as days go by.

P.S. You can see the donation curve here. Click to see the latest update: