Rock'em Sock'em Inflation
by Joel M. Preece. November 20, 2004
The Genesis for this article started about late November 2003. I had been a reader and a listener of FSU for about a year and a half at that time and continue to this day.
The year is 1965 Gold $35.00; the HOT commodity of this day and age is Rock'em Sock'em Robots. Entering the fray at a price of around $19.95 US. These little guys never quit, never leaving the ring, till one bloke has his bot popped. Just like we see now as the Fiat Boys pour it on to the Metal Men for the honor of Empiresis Titanicsis.
I'm here to show the VALUE of Gold, opposed to the price of Gold; NO CHARTS.
I was asked to do some charts, but there is enough Market Analysis here. You don't need mine. I do Security Analysis the old fashion way. I see intrinsic VALUE where others WON'T.
A 1965 Rock'em Sock'em Robots in the box can fetch as much as $500 dollars with the folks that see value in these little plastic toys. That's a handy return of 10.00%, compared to Gold's 7.7% over the same time frame--beating the Bureau of Labor Statistics claim of 4.7% inflation by a country mile.
Rock'em Sock'ems, in my perspective, are a heck of a lot more fun than Gold and The Bureau of Labor Statistics. Hence the better return on capital since 1965.
What if one day--for what ever reason--you had to move quickly or unexpectedly to another state or country, maybe even a different culture? Would your Rock'em Sock'em Robots be valued in other nations or civilizations? Would they fair well on a long journey, crammed in with all the other VALUABLES you'll think you need or want? What about if there was no time for reason? Could our little BOTS be buried quickly, thrown into a river till things pass? There are many ways it appears to store wealth, but very few ways to transport or hide it effectively. These FACTS gets lost in our can't-happen-to-ME society.
Two truck loads of top fill should fetch the same price as one ounce Gold bullion or coin or set of Rock'em Sock'ems. We are able to see some correlation between the value. Except if you don't want the top soil, you can put your little Gold piece in your pocket and leave. The guy with the top soil can too, but without the trucks he's not going very far. That antique clock or Grandpappy's ole' shot gun still can't get you very far till some sort of attention is drawn too it. "Got Silver" you say. Very nice, except a 100oz bar is 6 1/4 LBS. I think if you're frisked or running, it will show rather quickly. Same with your Rock'em' Sock'ems a quick fall, it's all over but the crying.
My perspective is Gold Bullion is a form of SAVINGS to be passed on to future generations if not needed during your stay. Much nicer gift than say, that lifetime lease on a SUV or that other embarrassment known as the National debt.
I know many of you are inconsolable lately over the price action of Gold. I am simply showing you its value in its cognizance form and transmissive attributes. Along with its sempiternity, fungibility, it still shines through the ages and comes out on top when times are tough and things are bad. That's the intrinsic values behind Gold that does not show up on the price charts.
Please try and stop skimming a couple of bucks off each other. I know you think you're smart 'cause you can do it. The question is, Why?
A quote from John Tyler better known as Trader 007 is in order.
"Release a Sparrow, so we may catch a (freakin Brontosaurus) Pheasant."
If there is just one little idea I would like you to take from my thoughts, it is this: Don't bet against this little Golden Tortoise. We all know and understand how that fable ended and why.
© 2004 Joel M. Preece
Joel M. Preece | Ottawa, Ontario, Canada | E-mail