RE: [Seattle-Anarcho-Capitalism] Stocks v. Gold

From: Scott S.
Sent on: Tuesday, August 30, 2011 6:07 PM
I can't get it to load.  What's the upshot?  Gold outperformed stocks?  Make sure you include data from the 80s when stocks rose like a rocket and gold took the elevator down.  My 96 year old uncle still screams about that -- it took him 20 years to break even on gold.  But since all western governments are going to inflate their currencies to make the debt look less bad going forward, I suspect gold will be a de facto currency/store of value.  Scott
 

Subject: Re: [Seattle-Anarcho-Capitalism] Stocks v. Gold
From: [address removed]
To: [address removed]
Date: Tue, 30 Aug[masked]:33:09 -0400

The divergence between the two lines is just the price of gold in USD, right? IOW, the divergence will be the same for all stocks, right?

I believe that's correct.

And what is the Y-axis units? E.g., the current value for AAPL on the blue line is about .2: does that mean that apple has increased in value about 20% more than gold?

For the blue line, the Y axis units are literally stock price / gold price. The .2 on AAPL means that 1 share of AAPL is currently worth 20% of what an ounce of gold is worth. In other words, you could buy 5 shares of AAPL stock for 1 ounce of gold.

For the second line, it's basically the current price of the stock in USD divided by a constant factor in order to get it on the same scale as the first line. For that factor I use the price of gold as of the first day of data I have for the stock.

And: I can only see the x axis from around 1998 and up (actually, it depends on the company): how do I make it show me back to 92?

It depends on how far back Yahoo finance has data, which is my source. Look up the symbol on http://finance.yahoo.com/ - if it goes back further on there than it does on my chart then let me know what the symbol is and I'll take a look.

It's kind of brutal to see how some of the stocks that we think have kicked ass haven't really (and how others that seem to have held constant value have actually tanked). My investment guy is sad. :-(

Yeah, tell me about it. What I got out of it is that there is a lot of wealth being destroyed through current economic policies and the best bet might be to try to just hold on to what you have by retreating to a safe store of value.


On Tue, Aug 30, 2011 at 4:15 PM, Andy Cleary <[address removed]> wrote:
Cool!

But a couple of clarifications:

The divergence between the two lines is just the price of gold in USD, right? IOW, the divergence will be the same for all stocks, right?

And what is the Y-axis units? E.g., the current value for AAPL on the blue line is about .2: does that mean that apple has increased in value about 20% more than gold?

And: I can only see the x axis from around 1998 and up (actually, it depends on the company): how do I make it show me back to 92?

It's kind of brutal to see how some of the stocks that we think have kicked ass haven't really (and how others that seem to have held constant value have actually tanked). My investment guy is sad. :-(


On Tue, Aug 30, 2011 at 3:06 PM, Matt <[address removed]> wrote:
I wrote a rough application to chart how a stock is doing denominated in gold (instead of the typical USD). 

Here's the URL to play with:

Just replace 'APPL' in the url with the stock you want to look at. If it's an invalid symbol you get an error.

There are two lines. 
The first one (blue) divides the stock price on a given day by the gold price on that same day.
The second line (red) is to give a comparison to how to stock looks when denominated in USD. In order to get them on the same scale (so I'm not trying to display the values 0.5 and 900 on the same chart), I divide the stock price by the price of gold on the first day of the chart, but then make no further adjustments. This means the two lines touch at the start and then diverge based on the relative performance of the stock in USD vs. Gold.

The app will not retrieve data before 1992 or after 8/1/2011 since that's the range of data I have for gold prices.

Check it out!

Matt J





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