Folks, Those who have been here long enough will remember that when gold broke thru$460 an ounce, I wrote giving the reasons why, and where the price of gold was heading. Today, just seven years later, gold hit $1,460 an ounce.
Lets see, gold has been appreciating approximatively 17% a year. In investing, the magic number is 72. The number 72 is used to calculate how long it takes to double your assets. For example, if you make an annual return of 9% on your investments, you take 72, divide it by 9 and get 8. This means that with a nine percent return, your investment doubles in eight years. When an asset appreciates 17% annually, 72 divided by 17 means you double your investment every four and a quarter years. Yep, you double your investment every four and a quarter years. Before any one rushes out to invest in gold, let me also remind the reader that I reckoned I would be retiring when gold hit $1,650. What may accelerate my retirement date is the price of silver. Silver is 17 times more abundant than gold in the earths crust yet at the start of this year, one needed 45 (not 17) ounces of silver to buy one ounce of gold. Today one needs just 37 ounces of silver to buy that same ounce of gold. Which leads me to the heading in this post. Here is what one of my classmates wrote in my autograph book when I was sixteen: Make new friends but keep the old one is silver the other is gold Mervyn1650Lobo
