Fools' Gold

We're beginning to build a massive amount of respect for James Altucher due to his willingness to say things that will get him absolutely pilloried by the masses.

He's taking on the gold bulls with a new WSJ  piece arguing that gold -- and yes, you've heard this before -- is really just a worthless rock that doesn't yield anything, has high carrying costs, doesn't have much in the way of practical use, and doesn't grow in value over time.

But, you say: sure, all that's true, but gold has been a major winner, right?

Yes, but over the long term, Altucher says no:

Gold reached its peak in 1980 when it reached $800 an ounce,  which is $2,000 in today’s dollars. So in real terms, gold has lost about 40% of its value since 1980. In the meantime, the stock market has gone up about 500% in real terms.

Some other time frames for comparison: From 1975 (post the U.S. getting off the gold standard) to now, gold is up 500%. The Dow is up 900%. Gold was worth about $20 an ounce in 1800. Since then it’s averaged a 2% gross return. Subtract out the costs of mining and storing gold, and what you have is basically a worthless rock that has a net negative return as an investment.

James, prepare to see the volume of hatemail in your inbox jump exponentially.