patrick.net

Specifically, I would put

20K on PBR. with dilution behind the company and no more dilution prospectively, it will be by far the fastest growing oil/gas upstream/downstream in the world. Little downside from here, terrific upside.

10K on PHM. Trading at 80% of book value and housing starts at historic lows and no dilution prospectively, 2011 will be the year that homebuilders turn the corner. Little downside but huge upside from here. In 5 years when new homes sold are back to the 1M level, this stock will be in the 30's.

20K cash/low yield account.

I'm guessing that for most, holding 40% in cash wouldn't yield better results, than investing most of it. You've definitely got the potential of finding amazing bargains, so having that cash ready to jump on them probably really benefits you. While the market might get bumpy for awhile, for most, having that 40% probably wouldn't do much. Perhaps leaving 10% in Cash in case of a great bargain would be great, or in case of an emergency, but 40% seems pretty high for most investors. The other 30-35% comes in terms of easy to obtain credit for most.

This is also based on previous messages by Kevin, showing he has a good grasp on his expenditures, a good paying job and probably very employable even in the event of a job loss. Compounded with the fact that credit is extremely cheap right now, even if he needed the money, he could wait several months for the market to change direction.

sell options

Gold miners
Potash Companies
Wait for oil to go below $70 and load up on solid companies there.

The stock suggestions are good, though I'm not sure if I can invest in most of those companies with a clear conscience. I mean, Altria is responsible for Kraft singles!

With inflation picking up, it almost seems like I could throw this money in a mutual fund with a cheap, fast wire transfer, and be just as safe as anything else.

Buy physical silver.

Here's what CNN recommends (lol):

http://money.cnn.com/galleries/2010/pf/1010/gallery.how_to_spend_50000.moneymag/

I haven't really looked at the pricing of Natural Gas, but I do know that it's price skyrockets when oil gets over a certain point, because it gets all sold to the Alberta Tar Sands, where it's used in the oil extraction process. Once it becomes cost prohibitive to use it there, the cost falls through the floor because they stop using it up there.

trade in the currency market.

If I had $50K that was my liquid safety net, I would send it to Vanguard. I would put some into their high yield tax free bond fund. I would put some into prime money market account. I would establish a brokerage account and buy a Gold ETF based on physical gold, not gold mine stocks. Gold is not a bubble, it's naturally rising because the dollar is being debased by low interest rates and increase in the money supply by the Fed, in addition to our increasing debt. The only time gold may be falling would be when our politicians have begun to act responsibly, and the gigantic debt of mortgages and the USA has been taken care of. I predict this may not happen within 10 years, if ever. It's not risky to have up to 10% of your financial net worth in gold. You could also put a few $ into Apple (AAPL) since this profit machine is not slowing down.

I'll look into PZE as well later.

Yes, PBR dividends have been cut drastically. They raised 75B recently in stock offerig (and 60B plan debt later) for the rights and capital needed to expand production. It is a huge expansion program and taking on a lot of debt for a 150B market cap organization. Wall street is spooked so the uncertainty (and Brazil election) is taking this stock to its 52 weeks low, which i think is a good buying point. Institutions are off this equity at the moment. Like RIG, V, BP and others, they'll come back eventually.

Dollar cost average into the same allocations I have now.

I spent a small fraction of it on tickets for one of the World Series games scheduled to be in SF.
Not that I'm a big Giants fan, 'cause I'm not.
But one of the ladies in my life is, so mosta you fellas know how that goes.

So I bought the rights from a season ticket investor before they had even made it to the NLCS, and so based on ask prices on stubhub, I'd say they've appreciated by 50%.

Selling and watching the game on TV is out of the question, but reselling and using the profit to buy down to a lower class location is not out of the question.

Kinda like, Bay Area real estate.

this is interesting because i really did have to just ask myself this question and the answer was start a new website and hire an employee to run it

to be more specific i've saved up about 200 thousand and i guess my options are many one option is to buy a house but thats just silly to me (a house is just volunteering to stay in one place and pay taxes or at best make a paltry return, and have a huge liability on your hands im looking for big gains), either way im going to spend it all i know inflation is only a few years away, and i want it invested in real assets not in cash

also if you cant make up your mind a Chrysler 300c SRT-8 is never a bad investment :)

25% Equity index fund - benefits during economic growth
25% Gold - benefits during inflation
25% Long-Term US Treasury Bonds - benefits during deflation
25% Cash - benefits during recession

Rebalance whenever an asset class is at 15% or 35%

This is called the Permanent Portfolio, an invention of the late Harry Browne. It has averaged 9.3% annual returns for the last 40 years, without the terrible negative years you would have had during stock market crashes. In fact, in 2008, when the market was down over 36%, if you were in PP, you would have actually had a 1.9% gain. The worst year was 1981 with only a 3.9% loss, but if you stayed around for 1982 you would have had a 23.3% gain.

http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-historical-returns/

Permanent Portfolio is the only allocation you need for all your money, retirement, and savings. The best part is that it involves no market timing or guessing, and there is no gambling involved.

Nobody can predict what will happen in the future. With the PP you don't care.

Highly illiquid, but I'm putting around $10k (after all rebates) into a solar system right now (and then some, for a new roof). It should return (the solar), at a minimum, at least 2%. This is mostly baseline electric usage. If you're in the central valley and contending with AC bills, it seems like a no brainer as the ROI is much better on peak rates. I like to think of it as a small energy hedge.

I'm not looking for "best return on $50,000" (my long-term savings is already invested in ways that I'm pretty happy about) -- I'm only concerned about putting $50k to use in a way that stays liquid but gives a better return than my savings account.

Split it up into 5-10 dividend yielding stocks then. A couple REIT's, a couple of preferred stocks, a couple of common shares that yield dividends.

Since this isn't your only investment account, holding cash and trying to get other deals might not be a requirement for you. Your investing account probably has that. This will give you decent returns and give you decent security.

Kevin says

The stock suggestions are good, though I’m not sure if I can invest in most of those companies with a clear conscience. I mean, Altria is responsible for Kraft singles!
With inflation picking up, it almost seems like I could throw this money in a mutual fund with a cheap, fast wire transfer, and be just as safe as anything else.

Kraft was spun out of Altria back in 2007, so you can now purchase with a clear conscience :). I actually prefer Phillip Morris International (PM) to the domestic Altria (MO), even though the dividend is less in order to compensate for more potential for growth overseas. Domestically, there's not much prospect for growth in cigarretes (thus the high dividend), but internationally, PM will take off in the next decade.

If you've ever traveled to India or Russia, you'll notice they still find smoking glamorous there, and they smoke like chimneys. Working grunts in India or Russia can't afford to buy a Mercedes as a status symbol, but can afford to buy Marlboros as a status symbol instead of the domestic brands.

As the middle class continues to grow in the BRIC countries, they will switch from the domestic brands to the glamorous foreign brands like Marlboro. That Marlboro Cowboy is still used to market these cigarretes overseas, evoking an era when America was still admired overseas.

I wouldn't buy any PM just about now since it's at its 52-week high...wait for at least a 10% pullback/correction. But as a long-term growth + earnings stock, it's a great bet.

From http://www.contrarianprofits.com/articles/has-the-best-performing-stock-gone-up-in-smoke/3166 :

"Between 1957 and 2007, Philip Morris was the single highest-returning stock in the United States. A $1,000 investment in Philip Morris in 1957 would be worth about $5.8 million today."

I'm confident I'll be able to get a similar return internationally from long-term growth in PM, as those who bought and held PM(later Altria) in 1957 did.

Kevin says

I’m not looking for “best return on $50,000″ (my long-term savings is already invested in ways that I’m pretty happy about) — I’m only concerned about putting $50k to use in a way that stays liquid but gives a better return than my savings account.

Here is how my liquid money is allocated:
o 100k in ING
o 100k in ultrashort bond funds
o 50k in a regular bank saving account
o 50k cash in a trading account

Interest rates suck in general.

Sugest you look into investing in stocks in DNO International
http://finance.yahoo.com/q?s=DNO.OL
www.dno.no

It is a liquid stock with potential. This is a oilcompany that has oilwells in Irak Kurdistan ready to export as soon the new government in Irak is in place. New government may get in place next week, 8 moths after the election. The stock has ben wildly shorted.

Curious with the MO vs PM recommendation if the dollar slide against foreign currencies would further lead to price appreciation of PM over MO?

Veronica: "This may sound like a stupid question"
JD: "Ah, there are no stupid questions"
Veronica: "You inherit 5 million dollars the same day aliens land and say they're going to blow up the world in two days... what do you do?"
JD: "That's got to be the stupidest question i've ever heard. I guess I'd row on out into the middle of a lake, bring along a bottle of tequila, my sax and some Bach."
Veronica: "How Very."

- Heathers, 1989

Fisk says

Also, US is one of the few countries where published govt. accounting has at least a reasonable relation to reality.

Oh yes the classic no can possibly be doing better than us line. The rest of the worlds governments lie, only the American government tells the truth. Sure, right.

Physical gold. Don't trust paper promises to gold (EG. ETFs).

Or with care, you might try gold storage:
goldmoney.com
bullionvault.com
bulliondirect.com

Since it's a safety net, I'd just keep it in FDIC insured accounts and not worry about the interest. Giving up some return is the price you pay for safety.

Even those high-dividend stocks could plummet like they did in 2008, and if you have to sell when they're down, you lose.

Since it’s a safety net, I’d just keep it in FDIC insured accounts and not worry about the interest. Giving up some return is the price you pay for safety.
Even those high-dividend stocks could plummet like they did in 2008, and if you have to sell when they’re down, you lose.

Yeah, the only problem with this approach (what I've been doing) is that it has no inflation hedge. Cash is a terrible store of value when governments are trying to print their way out of debt.

Since it’s a safety net, I’d just keep it in FDIC insured accounts and not worry about the interest. Giving up some return is the price you pay for safety.
Even those high-dividend stocks could plummet like they did in 2008, and if you have to sell when they’re down, you lose.

Or cash could be the worst performing asset, as it has been since the events you speak of.

theoakman says

Or cash could be the worst performing asset, as it has been since the events you speak of.

Could be, but cash has been good, even with 0% interest. The key is what you're going to spend it on. If you're planning to buy a house, and the house you want to buy has been falling in price 20% per year, you're making 20% tax-free by just sitting in cash. Japanese people who got into cash 20 years ago are still doing just fine, especially relative to those in their stock or housing markets.

But food, energy, and medical care are all going up. So there's "bi-flation" meaning some prices are rising while others are falling.

Nomograph says

Since it’s a safety net, I’d just keep it in FDIC insured accounts and not worry about the interest. Giving up some return is the price you pay for safety.

I would never keep that much money in a bank account. You will watch it inflate away, and your ’safety net’ will become the size of a postage stamp. Who needs 50K lying around for an emergency? What kind of emergency are you expecting?

I like to have at least 6-12 months worth of living expenses readily available in the event that I lose my job or become unable to work for whatever reason. If we had to, we could make $50k last for a whole year.

I would gamble with it. However I have all my bases covered, 5% fixed affordable mortgage and a nice rainy day fun with a steady job that pays decent. That and I'm young and single, so if I gamble and lose, noone suffers outside of my dream of a big score. I've already made the play, just patiently waiting my desired result, would be nice to have 50k to gamble with but I'll settle for what I have and can afford to lose for now. My gamble is a canadian company on the AMEX ticker symbol QMM

Is the big drop in March 2008 in MO's price because it split into MO and PM?

Any kind of investment is a risk, and it is not considered wise to risk safety nets. So I would not recommend you do anything with it, keep it in savings.

Since you want access to your money in under 2 weeks it is difficult to suggest an investment with a reasonable return. However the first thing I suggest is getting your money out of US dollars. What you make in interest is lost and more through the devaluation of US dollars at the moment. A simple multi currency bank account might be an option. Failing that I suggest forex, much higher returns than a bank account. You can usually get access to your funds in under a month.

http://www.ultimate-wealth-made-easy.com/best-way-to-invest-money.html

In reality he doesn't need access to the money in 2 weeks. That is a fallacy.

He loses his job, and needs 5K for expenses. He puts those on one of his credit cards. The one that just recently closed. Now he has nearly 40 days before he needs to pay that off. Roughly 20-30 days before closing + 20 days to pay the balance. Now he has 40 days to get 5K of the 50K. I'm assuming he would get a final pay check and possibly 2 weeks notice. If not, he would likely have a few thousand in his bank account from his last check. Regardless, holding off for 40-60 days wouldn't be an issue.

Meaning "Instant" is now turned into almost 2 months. If he needed 50K over night, worst case he could use credit cards, or perhaps a line of credit from the bank, or pull out a margin loan. Really he has access to the money at any point, it might cost him a nominal amount to get it, but he has access to it.

Obviously I wouldn't need the whole $50k in two weeks for most emergencies.

forex is a horrible idea. Exchange rates have fluctuated almost as much as the stock market over the last few years.

Not to mention with 50K you would be highly leveraged with forex! You couldn't even buy one lot with that!

Forex is a zero sum game for those who don't realize this. It's like a poker game where everyone chips in $50. If there are 6 players, there will be $300 between them at *ALL* times. One might have $250 while 5 others have $10, but the total will never go up or down. So the best "forex" trader wins.

theoakman says

Gold miners
Potash Companies
Wait for oil to go below $70 and load up on solid companies there.

After Potash of Saskatewan BHP bid price spike, I sold and moved into Potash One, a Canadian stock. Potash One is now getting bought out. I sold again. There seems to be a big move to swoop up Potash companies in the face of rising agricultural commodities and the need for larger crop yields. Potash is the easy route to increase yields. I'm now going to look into a speculative play involve exploration companies for Potash. Potash isn't easy to find, but when you do find it, you find it in ridiculously large quantities due to the geological nature of the formation of Potash deposits. Any company that makes a discovery is going to be a home run. In the meantime, I might as well try to find the next Potash company to be bought out.

If I had to revise my thesis for suggesting how to invest $50k, at this point, I'd go.
20% Physical Silver
10% Physical Gold
20% Precious Metals Mining Stocks
10% Potash Companies
10% Natural Gas Energy Companies
10% Petroleum Companies (Large Cap)
10% Singapore Dividend Paying Stocks
5% Switzerland Dividend Paying Stocks
5% Japanese Stocks (I'm taking Marc Faber's advice on betting on yen depreciation & Japanese equity inflow)

Meanwhile, the reality is, rather than diversify, I continue to sit overweight precious metals/mining stocks.

buy stable and high dividend stocks. like tobacco comanies.

As the Treasury prints money hand over fist and the fiat currencies around the world are being diluted constantly in the historical fashion of currencies that have wound toward unsustainability, have you studied physical metals? When you see what ALL the markets have done over the last decade and compare that to holding physical metals the decision to put that $50k into PARTICULARLY physical bullion silver is a NO BRAINER. Take a little time and read the following article and peruse the website focusing on the fundamentals of where silver is now and where it is headed and WHY. This is NOT a hard decision.

http://www.industrymailout.com/Industry/View.aspx?id=245442&q=264546678&qz=3f9465

http://www.24hgold.com/english/home.aspx?mk=1