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I don’t really understand the stock market.

My confusion starts at “Why would you invest in gold? It’s not useful for anything” and gets worse from there.

in reply to Ben

@brh I just posted this to someone else, but…

“How is gold primarily used?

Gold is mostly used in luxury products and as a unit of value. More than 90% of gold is used in jewelry, stored in central banks or held by investors”

@Ben
in reply to Dread Pirate (Tom) Roberts

also gold isn’t a stock, so it won’t help you understand the stock market :p

Value and usefulness are subjective - maybe the lesson is that the stock (commodity) market is an aggregation of preferences not a reflection of your own.

in reply to Ben

@brh I guess what I’m getting at is that things like this (gold being one example) only have value because people believe it does.

When the raccoon apocalypse comes, all that gold won’t be worth anything.

(Unless golden anti-raccoon armour works… in that case I take it all back)

@Ben
in reply to Dread Pirate (Tom) Roberts

all human society is a collective delusion. But a rather useful one, if you like humans
in reply to Dread Pirate (Tom) Roberts

@brh Yes, it is. It is all a belief system. ALL of the people around us are living in this belief. We need to change a wee bit
@Ben
in reply to Dread Pirate (Tom) Roberts

@brh it produces no income or growth, just looks pretty

barefootinvestor.com/articles/…

@Ben
in reply to Igor Sovcik

@igisho Yeah it has some practical uses. But the results of the recommended internet search says:

“How is gold primarily used?

Gold is mostly used in luxury products and as a unit of value. More than 90% of gold is used in jewelry, stored in central banks or held by investors.”

in reply to Dread Pirate (Tom) Roberts

@Dread Pirate (Tom) Roberts @Igor Sovcik AFAIK most of the useful uses of gold only use a tiny amount, so it may be extremely widespread (afaik it is, in most electronics) while still irrelevant in mass (and consequently for the market price)
in reply to Dread Pirate (Tom) Roberts

thats right. So now you know that gold is usefull. regarding 90% of usage in jevellery and investment, this gives gold competitive edge compared to other "expensive metals" since "large demand" stabilises its price volatility.
in reply to Dread Pirate (Tom) Roberts

It is quite useful for things like electrical connectors, but that's not what most people use it for.

But yeah, I presume, people put money in to gold when they other stocks seem too volatile and they feel they need to put the money somewhere (and the price of gold does increase over time).

in reply to David de Groot

@david
It may increase, but it doesn't have compound interest, or dividends you can reinvest. So you is not as good as other investments. Also you have to store it, or pay to have it stored.
in reply to Dread Pirate (Tom) Roberts

when everything turns to shit e.g. zombie apocalypse type shit, what good is gold? You can't eat or drink it to sustain life, burn it to keep warm, or sharpen it to use as a tool. Seems a bit pointless.

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