The Real Money Show
The Real Money Show - October 31st, 2015
The Real Money Show - October 31st, 2015, with John Scholes
And welcome to The Real Money Show, the number to start investing you know by now 1-8-7-7-8 Silver online to guildhallwealth.com, the investor kit, the precious metal advisor, and reminders of the first of many times. I'll remind you this hour on the show that Wednesday is coming Wednesday from 7-9 PM. Quest trade head office at Young and Finch, RRSP, TFSA seminar about silver and gold, how to invest and use the room in both of those and more to get some metal is what we're talking about. Darren, we're going to start off with you, always do a bit of a recap and a week that was. John, this week was pretty much the same as last week. There was a bit of a rally in silver around Wednesday of this week, which peaked silver at around 16, 30, 16, 40 per ounce and gold rallied all the way up to about 11-85 per ounce. Now each metal was working in tandem of what we saw midweek, which was a jump in oil prices, both WTI and Brent crude rose about a dollar per barrel on Wednesday morning. Both gave back all their gains and oil, although it remained slightly positive on the week. Silver and gold remain back to where they were. So week over week, pretty much flat as we take the show here on Thursday. We're going to spend some time today dealing specifically with a couple of things. Number one, we're going to talk at length about the RRSP option for getting gold and silver. And we're going to talk about the upcoming seminar. As you know through the show, we're going to be telling people about what's coming up and how they can get in touch and get to that seminar next week. And we're going to talk a little bit about silver investment ratios and where we are in the big huge scheme of things, a little bit of a comparison on gold and silver, where they came from, and what we've seen historically before that gives us some inkling that both gold and silver could be taking off for a next bull run. So we're excited to bring that to everybody. And we'll start with talking a little bit about where we came from. If you're new to this marketplace and you want to know more about gold and silver, one of the best things that you can do is prepare yourself by studying what's happened over the last 50, 60 years. And what we call that is the then and now due diligence and what had happened the last time we'd seen bull runs. And if you look at the 70s, which was a time in which we experienced economically a lot of very close similarities to what we're seeing now in the 2000s, we're looking at specifically items like inflation, geopolitical instability, the fluctuation in the US dollar and certainly the role of inflation. And these are four basic fundamental cornerstones that have been applied to gold and silver analysis for the last 100, 200, 300, maybe even longer years in organized economies around the world. And if we look today, we needn't look any further than the very last one I mentioned, which is inflation and how that ties into the dollar. And if we look in the 70s, if we want to comparison to what's happening right now as a gold investor, if you've been here a while, you know exactly what gold has done in the last 40 or so months, we've seen that gold peak came off of that peak. It has been in a relative tight trading range in and around the $1,100 to $1,200 per ounce range, while silver has done basically the same thing. Now, as we heard from Peter De Graf last week, one of the most well respected analysts in the country, he suspects as does as do many others, David Morgan Gerald Solente among a few that both gold and silver have in fact, bottom that we saw that bottom last year and this year, silver in the $14 range and gold in the low $1,100. And as a comparison in 1970, gold rallied from about $35 an ounce in 1970. That's right around the time that Nixon ended the gold standard. And it rallied to nearly $200 an ounce in December of 1974. When that happened, the news changed. It became noteworthy. The media grabbed a hold of it, banking sector at large also fell in love with trying to understand why gold was going higher. And of course, what its relationship was to the US dollar. When they got involved, you saw in 1974 gold fell to about $100 per ounce in August of 1976. So that was one of those big things where we had a two year span. And if I compare the two charts, examine the graph of the average monthly gold prices from 1970 of January to September of 1976. And I compare it to the gold prices from April 2002 to October 2015, we would note that the graph would show the same set of data points, essentially on the time scale. And we'd see the same type of movement. And really what we're looking at here is the same cycle repeating itself, which is telling us that history does repeat itself. It might not be exact and it might not be perfect and sometimes it's dirtier than it was before. But the reality is that we can see these things and we can extrapolate where we're heading in the near term, maybe perhaps within even the short term. But what we see is that gold prices increased by a factor of almost six from 1970 to 1974, and then fell by about 45%. Gold prices increased by a factor of about six from April 2002 to August 2011, and then fell by about 45% from the peak. Both the rallying correction in 2002 to 2015 took about twice as long as in the 1970s. Subsequent to the 1976 bottom, gold prices increased by a factor of about eight in a massive bubble inspired by, among other things, inflation worries, fear and the loss of confidence in government in central banks, the exact same thing that's happening now. So you might ask, what does this prove? Well, it proves nothing in and of itself, but it suggests a couple of different things. Number one, gold prices can be amazingly volatile. So can silver, especially when fear increases. And the majority of people lose confidence in debt based fiat currencies, that's paper money, and central banks, politicians and planners. Number two, if the analog continues for several more years, we might see gold prices increase by a factor of five to 10 into the five to 10,000 range in five to seven years and double the three and a half year rally in the 1970s. So that's exactly along the lines of what Peter De Graf was talking about in last week's show. And we should thank Peter for that because it echoed the sentiments of the real money show very closely. Now, we should not expect this analog to predict gold prices, but we should not discount the possibility of a similar pattern unfolding. One, eight, seven, seven, eight silver online to guildhallwealth.com. Want to tell you about this in between till we get back to Darren's comments at free gold. Here's the deal. Go to getyourfreegold.ca. You receive a one gram gold me believe coin for every $5,000 US invested in an RSP account for precious metals. Talk a little bit about silver because silver for the average investors are pretty, pretty attainable, right? It is. And it is very attainable at this point in time in terms of the overall value at the price it's at around $16 an ounce. There really is no reason in the world why given the set of fundamentals that are out there, I as an investor wouldn't be buying a little bit right now to protect my portfolio overall. You've got a bankrupt society. You've got a total world debt at almost four times. It's three and a half times the amount of total GDP in the world. I don't know how we recover from that. We don't have a historical set of data that we can rely on to predict what the outcome will be. We've never had central banks spend and print this much money. We've never seen housing prices jump so fast, fall way down and then jump again in the US in particular. We've never been in this situation economically and we don't have that type of foresight to predict what's going to happen. The best that bankers can do in planners and portfolio managers and advisors to say, "Hey, stay the course," which is what the typical Canadian here is when they go to have an analysis or an assessment done on their money. You yourself, John, ask me this past week, what can the average investor do with a little bit of silver? What can I do to get them on a roll? And the fact is that everybody should be asking that same question. It should be something that's on the top of everybody's mind and it should be something that has to be done and you should be thinking long and hard about where you want to park your money and if you really do want to leave it in the paper markets. What we're asking ourselves is, why is this repetition happening in the gold and silver market and what we see in those things that are happening? Really, they tell us a lot about the marketplace. And the question is, why is it happening? And that question is very simple. It's in the late 70s, the US had lost international prestige due to a weak president, which was Jimmy Carter and massive inflation and they had excessive debt. Exactly what happened now and today the US has lost considerable prestige, especially in the Middle East, Europe, and Asia and they have excessive debt. They have no capacity to balance the budget and they have twice elected a president who is definitely not been able to fix anything with the economy. So you've got in the late 1970s inflation, which was partially a consequence of massive spending in part when people are thinking about this historically to the Vietnam War in particular. And that benefit that benefited very few people, the 1% benefited, but besides the military contractors and bankers, it really didn't benefit anybody else. Today, the US has yet to experience and pay for the consequences of wars in Afghanistan, Iraq, Libya, Syria, Ukraine, but unpleasant consequences will occur. Mark my words, those wars primarily benefited military contractors and bankers. I don't see anybody that's benefiting from having fought those wars directly indirectly. There's lots of consequences. I'm not going to belittle those consequences. But if you look again, central bankers and politicians, they lost considerable respect in the late 1970s. And right now, the exact same thing is happening again. So when you look at the broad picture, you have to ask yourself, what is it I should be doing with my money? And number one, you have to ensure it. Number two, how do I ensure it? And one of the options is simple. Buy yourself some physical, gold, silver, platinum, palladium, and we'll talk later about natural fancy colored diamonds. So how do I go about doing that? That's simple. Go to our website, give the number, a call that you hear that's being given out in this show, and act now, ask questions, get informed, because when this market starts to move, you will be too late to get to it. And the herd mentality hurts everybody. If you're not first to be there, if you're not taking up a course of action right now, planning the way to protect your money, you're making a foolish mistake. So call us, go to the website, you can own it physically and physically only through Guildhall. It's the only way we do things, but you can put it in an RSP. We're going to talk about that in the second segment at length. You can put it in a TFSA or other RSPs. You can store the product outside of those vehicles. You can also just take it home. If you like owning some gold and silver, you want that satisfaction of having that insurance in your home, pick up a couple hundred ounces of silver, or maybe 10, 20 ounces of gold, that's easy to do. Put it in your safety deposit box. The last way we can do this is we can simply set up a depository account, which would allow you to store the product through Guildhall. All of these things are available, and they're a phone call away. So give us a call directly to the website and you can get us right away. 18778 silver, guildhallwealth.com. And as Darren mentioned, RSP, TFSA, you can do go more in depth than we can in this one hour. And you can do that on the seminar coming up, this coming Wednesday from 7 to 9 PM. The quest trade had off as a young and finches where it's going to be silver and gold seminar with Guildhall, the number 18662749570. Get the last few remaining seats and we'll see you there on Wednesday. More of the Real Money Show coming up on Talk Radio, AM640. And back with more of the Real Money Show, the number is 18778 silver online, guildhallwealth.com. I will give you another number 18662749570. That is the number you need to get in on the seminar. It's happening this Wednesday will be an evening seminar from 7 PM to 9 PM. The quest trade young and finch head office all about your RSP room, your TFSA to invest in precious metals. Let's go right to that Jeremy, some details about this upcoming seminar. Oh, yeah. So we did the seminar pretty recently just on the registered account for RSPs purchasing gold and silver and how to go about that. Very successful seminar. There's a lot of people interested in learning, what are the ins and outs, what type of product am I getting, what are the costs involved, how easy is it, is it difficult, et cetera, et cetera. And that's what this seminar is all about, walking people through the process of how to put physical precious metals in your portfolio and how easy it is. And right at the quest trade offices where we're doing the seminar, you're easily able to actually get going, open that account, get started. And we saw a lot of people do that last time. So it just makes sense. We've had a good demand for this type of seminar. And so we're going to do it again. It's already getting pretty full. So you've got just a couple more days to book your seat. Well, to interject as well, Jeremy, I mean, with precious metals being so undervalued at present, now is the time to own gold and silver and especially in an RSP or a TFSA or a lift or any one of those lira, any one of those accounts. So it's a really great opportunity to get in, come to the seminar, learn about how to invest. And as I said, this is a great time to invest. And as you were saying, Darren, it really is insurance for your portfolio. All assets or sorry, all securities that you own, all stocks that you own, GICs, all of these things, they're all paper denominated assets. What happens if the dollar starts going down? You know, we talk about with clients all the time about exchange rates. And every so often, someone will say, well, I'll wait till the Canadian dollar improves a little bit before I jump into precious metals. Of course, owning precious metals is a hedge against declining currencies. You know, every time the bank of China lowers interest rates and devalues the dollar a little bit, don't you wish you had some more gold in your portfolio to hedge against that? If you were in Russia when the ruble got hit hard back earlier this year, wouldn't you have loved to had gold and silver in your portfolio to hedge against that? If you were in Canada over the last year and the value of the dollars come down by 25%, wouldn't you have loved to have gold and silver to hedge against that? That's a prime example of what we're talking about. And that relates to our entire listening audience, really, if you had taken just a portion of your savings, let's just say you have a portion, just a portion, take 10% of your savings. You had 30,000 in the bank. You took 3000 of it and you put it in the gold. You didn't lose anything in the value of purchase of what you can take. And let's say you're a snowbird, you want to go down south every year, and you use your savings to do it and you rely on building them up over the year. That just got more expensive. It got way more expensive. But if you held it in gold, you didn't lose as much value. In fact, you maintain the same purchasing power and essence as you did. Now, we're not in a bull market right now. We're in a grand bull market, but at this moment, we're not seeing gold at two or $3,000 an ounce. We're seeing it still at 11 to $1,200 an ounce. And that's what we're talking about in terms of protecting yourself now, giving that insurance policy early means that if you ever do have to use or exercise that insurance policy, it's been there forever. You have that ability to do it, protect yourself. And while the mainstream media is touting the weakness in the market, we've seen a lot of buying in the market. There was a chart out this week that's going to be in the newsletter where it shows that even though only 1% of the investing public is buying silver, I'm switching from gold to silver here, but they're consuming 30% of the silver that's coming to market. So that's massive. 30% of all the silver that's coming to market is being consumed by 1% of the population buying it for investment purposes. That's not talking about solar power, electric usages, digital usages, cars, cell phones, plasma screen TVs, anything digital, anything electronic, medical usages are growing all the time, water purification, which I think is going to be very much more important going forward. So you can already see that the low prices are definitely a good thing for a lot of people. They're taking advantage of it. And eventually it will show up in the market because all of these markets are being interfered with right now. Whenever you have a low interest rate policy, you're interfering with the markets and it's obscuring the truth. And one of the ways to really understand that actually is to think about inflation. Inflation, Darren, what would you say the government inflation rate they would say 2%? Well, probably less than that. I mean, the core inflation rate is probably reported by the governments of both the US and Canada as being in fact on the precipice of actually being deflation, but the cost of living. But the cost of living, yeah. So the cost of living, if you asked anyone, what do you feel the actual inflation rate is in terms of your cost of living? And they might say somewhere closer to 5% or more. Well, on a 10-year basis, that means that you need to earn 50% more in order to keep up with that inflation. Good luck. Right. Well, if you owned this driving today about for the last seven or eight years, nobody's really got to raise. I mean salaries have kept to the same amount for the last seven years. One of the unions, for example, going to step in and decide that they need that 10% increase over two, three years because they're trying to catch up and it's going to come and they're going to pressure the governments to do it. Right now, if you look at the US debt of 18 trillion dollars, if the interest rate went up to 5%, that would be almost a trillion dollars just to service that debt. Now, does anybody know really what a trillion dollars is really what it looks like? Well, if you were born in biblical times and you spent a million dollars a day from the biblical time, so this 2,000 years ago, you still wouldn't go through a trillion dollars, spending a million dollars a day. If you took a trillion dollars and took a US football field, which is 100 yards long with both end zones, took a skid, piled it with 100 dollar bills, two skids higher, put a 747 jet in one end zone and the White House in another end zone, you'll have a trillion dollars. So that's what it takes to service 18 trillion dollars worth of debt. That's total debt in Europe and the US is around about 250, two trillion dollars right now. It's just printing, printing, printing. I think they're going to run out of trees and ink before they run out of the paper. I mean, it's crazy. It's to service this debt is virtually impossible. If you look this morning, Pfizer, a drug company with Alagan, they're going to merge the companies. Alagan's in Ireland. Why is it in Ireland? Because there's less corporate tax. I think there's about 12% corporate tax in Ireland versus the US, whereas a minimum of about 25% upwards. So it makes sense to take your money abroad and go to the lowest rate. So what happens? The US doesn't collect. They've created millions of jobs in the states over the last six years since Obama's been in. But these jobs are eight and ten dollar jobs. If you look at the jobs that are being lost by head offices at Hewlett Packard, Walmart, even Deutsche Bank, one of the largest banks in the world are just laying off people, getting out of 10 countries, not paying any dividends on their stock. And they were paying about a 3% dividend of refused to pay dividends till 2017. It's tough out there. You need to have hard assets in your portfolio to protect you. Gold, silver, natural fancy color diamonds. Whether you put it into an RSP, TFSA, or some type of pension, which you can do, whether you want to put it into a depository, which is safe, secure, allocated, segregated, or whether you just want to take the product home and just keep some gold and silver safe in your safe deposit box under the bed, under the mattress, wherever you want to keep it. But you need to have at least 10% to 20% hard assets because inflation is creeping up. Wages are going to be creeping up. And there is no way that the US government can maintain or the Fed can keep on having no interest rates and keep on boosting the stock market up. The real estate market, they are both bubbles and bubbles burst. One eight seven seven eight silver, guildhallwealth.com online, Jeremy. Yeah, we're, you know, Paul was mentioning having gold and silver, you know, if you had silver in your portfolio over and gold for that matter for the last 10 years, it's doubled in price. And we're at the bottom of the market. Anyone you talk to will say gold and silver are in the bottoms right now. And yet they've still doubled in the last 10 years. So if you had gold and silver in your portfolio over the last 10 years, say 10% worth, you've gained an extra 10% on your portfolio. It doesn't matter what the rest has been doing. Now, what if you had 20% in your portfolio over the last 10 years, you've doubled that. So you can see, and again, we're at the bottom of the market. We're at the point where silver and gold are extremely undervalued. And you can understand that by the fact that while they keep adding to the debts, they keep printing more money, yet gold and silver are maintained this lower price because we're consolidating. And so you can see that this is such a good time to buy because it is undervalued and that people are buying because, again, 1% of the investing public is buying 30% of all the silver that's coming out of the ground. So it pays to have some of some of this insurance in your portfolio. And the experts will say to have between 10 and 15 up to 20% as that hedge, as that insurance policy. And you can look at the numbers and over the last 10 years, it's done what it's supposed to do. And imagine what it will do going forward. I think I have to correct you. First of all, since 2002, 2003, silver was trading at $3.80. We're trading at 1560, which is 300% difference. Gold was trading at $250. We're now trading around about 1150. So it's not doubled. It's four times as much. So even though in 2011, silver went to $49. Gold was at $1,900. It's still a better investment than sitting, putting your money in the bank, getting 1% interest and paying the government and other income tax on it, because that's what you do. It's profit. They're going to charge you the tax. You might as well have it in a hard asset, put it into a TFSA. You can put up to $41,000 Canadian if you've never invested into a TFSA. And what we're offering a guild who is when you put whether it's a TFSA, an RSP, any type of pension plan, $5,000 US into one of these plans, we're going to give you a grammar goal to take home. That's a start to saving gold and silver as a separate portfolio. Put some money into a TFSA. It's tax-free. Gold and silver right now is so undervalued. And I think this is the greatest time to buy. 18778, silver online, the guildhallwell.com. Just before we wrap this segment, Darian, you mentioned the RSP. And something you've always said, if you ask 100 people in a room, 99 people will not know what's an RSP. It would nice to know exactly what's in your RSP, because you can hold it. It would be. And that's the plain truth, John. I wish it wasn't that way, but Canadians and maybe for the rest of the world, this is the same, but Canadians, for sure, are very passive when it comes to investing. We don't examine the costs involved in every investment we make. We don't know where our money is parked. We give it gladly every year. We make our contributions, whether it's an RSP or any type of RSP. And we do it on a regular annual basis. We're emotional about making that commitment to get that tax break. But we don't think long term about what the incentive might be, nor do we think where is it parked. And that's the truth. When it comes to gold and silver, you know, exactly where it is. I can give you the bar number. I can tell you exactly where it's sitting on what shelf I can show it to. You can visit it. It's something you'll know a great deal about. You'll become an expert in, so to speak. And that's why we value the mission that Guildhall is on to bring this to people all over Canada. The education is key as well. Wednesday, this coming Wednesday, 7 to 9 p.m. The Questrade head office at Young and Finch for the seminar for RSP and TFSA investing. You want to be there, simple, 1-866-274-9570. Register now to get one of the few seats that are left for that. One in the meantime, we'll take a break. You go to Guildhallwell.com online and 1-877-8 silver is the number of the real money show. Talk radio, name 640. Back with more of the real money show, 1-877-8 silver online to Guildhallwell.com as we just get into diamonds here. I want to remind you again this coming Wednesday, November 4, 7 to 9 p.m. The Questrade head office at Young and Finch. There's an RSP, TFSA seminar. How do you use both of those for investing in gold and silver? Let's get into diamonds, Paul. This is your baby. Yeah, actually, I had a very disappointing week. The reason that I was very disappointed, as you know, I went to the Argyle tender in New York. We spent quite a lot of time reviewing the diamonds. I bid on six diamonds, which were VS quality diamonds. Tell me you got something. No, we never got one diamond. We were so disappointed, especially with my partners as well, where we bid between 35 to 40 percent higher than the people from Rio Tinto, which own Argyle, the Argyle mine, suggested where they thought the price would be. So if they thought a diamond was going to be, for example, 120,000, we bid maybe 160,000, 165,000. That's US, not Canadian dollars. And we won't see where we finished. They don't really tell you what it went for, but they tell you you were within 2 percent, 5 percent of the bid. Or if you're not even close, they don't even tell you. So I was pretty disappointed because I had my heart set on a couple of stones. And as I said, I was, well, you know, we had some clients that were interested that really wanted a diamond. And we went out of our way to try to purchase. Now, you know, I'm going to Perth, Australia next year, to Rio Tinto, to the Argyle tender, directly to Perth, and do a tour of the mine and, you know, do the whole thing. But I really, you know, I talk to the people from Rio Tinto. And I said, give me an idea of how much your diamonds have got go up every year at tender. Well, they gave me a figure. And so we doubled that figure that we thought that we would go in at least. And we never want to stone. Well, that's bittersweet. No, because it just shows that all bolts were tied, right? You know, I'm disappointed. But on the other hand, every Argyle diamond that I have on my website next month will be up by 30, 35 and 40 percent. So we have some beautiful Argyle stone. So in one way, it is bittersweet. You know, I didn't win some stones. But on the other hand, if I've got a stone right now that's selling for 150,000 as example, that stone's going to be now 185, 190,000 because I can't replace that diamond at that price. So the people that have taken advantage over the last year, and we've had lots and lots of clients that have bought Argyle pinks, have done unbelievably well. And they're going to do even better in the future because there's less, you know, at this tender, there was, you know, close to 60 diamonds. There was five red diamonds. And I can't even think of what the red diamonds went for. The young lady I was speaking to said, well, this should go for about 2.3 million a carat. It was an SI one or SI two. I'm not sure which one it was. We only sell VS quality. So the diamonds that we wanted to purchase, they weren't for recut. They want to put into jewelry. They were for investment purpose only. Now, every diamond we buy at Guildhall is an investment grade diamond, Jeremy. Maybe you can kind of add to that. Yeah. You know, first of all, every diamond that is in the collection is something that we purchased. We've gone out and invested in that diamond and we've scrutinized the diamond. In this industry, you get a lot of companies where they are selling goods for a wholesaler. So you can see actually, you know, if you do your research, you can see two companies selling the exact same diamond, right? So they're just going off the list. And a lot of those diamonds aren't investment grade. You know, I call this week a client, not a client, sorry, someone who purchased a diamond five years ago was a 0.75 just over three quarters of a carrot, deep, orangey, deep brownish orange or no, orangey brown. He made nothing with the diamond. He said he paid about $4,000, $5,000, five years ago, it's, you know, today it's selling it at, you know, maybe $2,000. It's not that's not would have been $800, five years ago. That's not an investment. An investment is something that if I have to sell it and replace it, it's gone up. And you can clearly see, I was speaking with a client yesterday. She bought an intense yellow one carrot in two years ago, November, 2013, with taxes in, she paid just under $20,000. Today that diamond, if you were to buy that, you wouldn't be able to buy that for less than 2324,000 pre-tax, which is 2728,000 taxes in. That's an investment quality diamond. Now what makes that? It's internally flawless. It's got, it's got good color, strength of color. It's got good proportions. And these type of qualities in a diamond are really, really difficult to find. You really are looking for a needle in a haystack here, but to buy quality, you're buying rarity. Those two go hand in hand. They are. So if you're listening to this, this is the takeaway. Quality equals rarity in natural fancy color diamonds. And as a result, the better the quality, the more substantial the investment will be. So when Paul's going after these VS quality pinks at Tender, he's not looking at the SI. The SI might have really good color, but it doesn't have all of the features. These VS diamonds that we were looking at had both. They had the color and the clarity to go along with it. And those diamonds year over year, you see the increases. And speaking of increases, you know, pink diamonds didn't go down in 2008. The Color Diamond Research Foundation looks at 20 over 20 colored diamond dealers and looked at their records and no one saw decreases in pink diamonds during 2008. Across the board, we're talking from the least attractive pink diamond to the highest quality. Yellow diamonds did go down. Now we can go into that. I think it has a lot to do with liquidity for diamond dealers. They're always chasing the next big diamond, et cetera. However, they recovered within one year and continued on the same pace. Well, though you looked at the chart, there is a V right there in the middle in 2008. But if you were to just draw a line right over it, you would see paved over it. It just continues up. It's not a V per se, though. It goes far to say that it's a V formation. Yeah. And though the diamonds went down in 2008, yellows, that's not vivid internally flawless diamonds. That's the group as a whole. That's a group as a whole. So if you've got light fancy as an example in a VS two, that's part of that group. That's part of that group. I mean, if you've got less than a carrot in a yellow, that also went down. We only sell in yellows over a carrot, basically internally flawless, but we do sell vs vs one vs two when we're buying a vivid. And the reason for that, it's natural, fancy colored diamonds. We're going after color first, and then we're going after clarity. I will buy a vs one or a vs one. It's maybe a 5% difference in the wholesale price from an IF. But when I'm buying color, when I see a color that's just amazing, I will buy that diamond. And on that point, Paul, just getting back to that chart that Jeremy was referencing, it really isn't a V per se as you would imagine it in your head. It's more of a bump in the road than anything. And it does include all of the various qualities in terms of diamond types. And really, if you were to segregate the vivid from that, and even the intent to a certain extent, I think you'd find that there was, in fact, no V and perhaps even in vivid a slight spike. We know, for example, vivid to go up every year, I can't find quality vivid internally flawless stones right now. The last one I bought was two months ago. I'm going to see next week a couple of stones in vivid IAFs. But if they don't meet out clarification, I'm not going to buy them. You know, in the trade they're called left is, which means they're leftovers. There's something wrong with that diamond. Now, if you're putting a diamond into a piece of jewelry, I don't particularly think you need a vivid IAF or an intense IAF. I think you can get away with a vivid VS1 or VS2 because just on color, that's diamond, whether it's in a ring or a necklace, it's going to look absolutely stunning. And nobody's going to come up to you with a jeweler's loop and, you know, loop your ring. Maybe I would, but most people wouldn't because they're just looking at the diamond and the color and the setting that it's in. So if you look at natural fancy color diamonds, you have to do your homework. A Guildhall, we have a 10 step guide. If you would like that 10 step guide to investing in natural fancy color diamonds, call us email us. We'll be happy to send that literature along to you. It was written by my daughter and I'm very proud of her. She is a GIA diamond graduate. So she knows about diamonds, not only natural fancy color diamonds, but white diamonds as well. And as Darren said, you know, Jeremy said in 2008, yellow diamonds dropped, it didn't mean that it was vivid internally flawless. This year alone, white diamonds on a whole are down 29%. 29%. That means, you know, whether they're G-H-I white diamonds used for, you know, earrings used for, you know, engagement rings or whether the diamonds are used for drilling, you know, their industrial diamonds on a whole, they're down 29%. That doesn't mean 100 carat D, which is the finest quality in an IF is down 29%. That diamond is up because of the rarity. And Jeremy says quality equals rarity. And that's what it's all about. 18778 Silver on to Guildhall Diamonds.com. We talked about procuring and scrolling away your diamonds for your investment. How about the other way? How about when I want to resale? Yeah. You know, I got to tell you, whenever we mention this to potential clients and they look at it, they're so quick to talk about the exit strategy, which is great because it tells me that they like what they see. They love that these are great gains on a market. And I can see that this would be a great hold. But wait, hold on, hold the presses. How do I get out of the market? Guildhall, we were talking earlier about that person who bought a brownish orange, right? There's nothing I could do for him. We will not help clients who purchase diamonds elsewhere to resell and go into the secondary market. If a client has purchased a diamond with Guildhall, what that means is, is we've put the studying behind that, the research behind that, the analyzing the diamond, pushing it through our criteria and making sure we've done all the homework on it. We know how hard it is to find a one carat vivid. We are more than happy to assist our clients when both parties benefit on that sale. What I mean by that is, we are willing to help clients resell their diamonds, but it has to be at the right time. When you're buying a diamond, the more substantial the investment, the less time one can invest in it. It's a little bit like real estate. If you buy a studio apartment, you can't flip that in a year. You're not going to flip it in five years and make money. You're going to have to hold on to that for a decade or more. When you're buying colored diamonds, the more substantial the purchase, the less time you would have to put into it, the smaller the investment size, the longer the time. Again, once that timing is appropriate where both parties can benefit from the sale of that, Guildhall is more than willing to assist the client to exit the market. When we come back, let's discuss a little bit more about color diamonds. I think it warrants a little further discussion. Let's talk about its relationship to real estate a little further. Love it. In the meantime, the number is 1-877-8 Silver online to Guildhallwealth.com, where you want to see the collection Guildhall diamonds.com. There is that seminar on the way this coming Wednesday from 7 p.m. to 9 p.m. The quest trade head office. That's a young and finch in North York. RRSPs, TFSAs get educated using precious metals for that. The number 1-866-274-9570. Real Money Show continues. Talk Radio, M640. Back with more of the Real Money Show, 1-877-8 Silver, Guildhallwealth.com online. The seminar using your RRSP and TFSA to invest in precious metals. Very simple. Wednesday, November 4th is coming Wednesday 7 to 9 p.m. at the quest trade head office. That is young and finch in North York, 1-866-274-9570. We'll get back to precious metals, real estate and the relationship. But first, back into a bit of diamonds right there. I do want to go back into a little bit of diamonds. It's important. Jeremy was talking before we ended there about selling and about exit strategies. I want to make sure that people understand, when we're looking at selling a color diamond, it's crucial that that discussion be had. But not only because you want to discuss what potential gains are going to be on the table, we think now that we've been in this market long enough people understand, especially when you're coming to Guildhall, there is an expectation that you're going to make money investing in a color diamond. But when it comes to the exit strategy, we also want to make sure people understand that it needs to be a win-win situation for both Guildhall and the seller. If somebody came along and bought a diamond on Tuesday and they wanted it to give it back on Thursday, that's one thing, John. I mean, obviously they're well within their right. Something changed. We do that. And it doesn't happen very often. It's probably happened maybe once or twice in the entire time we've ever sold diamonds. But that's part of the policy we have in place. 10 days you have analyzed, think about it. If it wasn't for you, you made a mistake, bring it back. But once you've owned it for two or three years, if you're looking for real solid feedback, given what you paid and what the market would bear, and you don't like that outcome, you can't foresell the diamond. Otherwise, you're doing a huge disservice to yourself. So as an investor, be prepared. Do your due diligence. When you're talking to us, we're going to discuss exit strategy and tell you how long we think you need to hold that particular stone. It could be a red diamond. It might only be 24 months and you're ready to go on the open market and we have to call Christie's and get it out there. But that's for a very large spender. Somebody's willing to spend two or three million dollars per diamond. Yeah. And that's something that a client, if they purchased it, yeah, you could hold it six months a year, bring it back or start to the exit strategy process. And even if it took another year to sell or two years to sell, you're raising the price all the way along because it's got to reflect the market price. Going there, we're talking about reflecting the market price. I sold a client a 0.48 red VS one for just over $250,000 about four years ago that we've, the client wanted to sell the diamond last year. And I said to the client, you know what, this diamond keeps on virtually doubling every year. You know, you're making nothing but you need the money. I said, no, but I would like to sell it, which doesn't make sense. So I said, okay, we put the diamond, we would sell it. I found a buyer for this diamond for $400,000 last year. The client said, well, get it reappraised. Well, the appraisal went from 900 or went from, I think, 750,000 to like 900,000. So instead of one in four, he now wanted five. I could have got four solid quick. He would have made a sell. I would have made some commission. The client got back to me last month. What's the diamond worth? So I go and get it reappraised. It came in at 1.1 million. After this our goal tender, God knows what this thing's going to be appraised at. But if you don't need to sell, and all you're doing is playing games, say, what's it worth? What's it worth? What's it worth? If you really want to exit and get out, we will match that diamond up with a buyer. We have lots of collectors, but the customer was happy to make 50% for like a hold of two years, but we would have charged 15% commission. That's our commission to resell the same as an auction house. So it doesn't pay if you've paid sales tax, and you've got to pay a commission to try to get out in two years or three years. The longer you hold, the more you're going to make. Now, that diamond that's trading is appraised at 1.1 million or a little higher today. It could easily get $600, $650,000 at a wholesale price, because the stone is probably, as I said, after the I'll go tender, it's probably going to go to 1314. It's a 0.48 red VS1, impossible to find. You cannot find it. It's a rarity. The longer you hold on to it, the more you're going to make. And collectors and people that have hard assets, people are terrified of fiat currency where the paper money is just going to depreciate. If you look at every single country around the world, has the US dollar got stronger? Or has every currency got weaker? Because everybody's devalued their currency. A diamond such as a red is portable wealth. You can hold it in your hand. You can put it in a safety positive box. You're always going to be able to sell it, and you're always going to make money on that type of product. But as Darren said, and Jeremy said, you need to have an exit strategy. How much do you want to make? If you don't need to sell it, why are you selling it? Just get it, forget it, right? Absolutely. The question of the week, John, let's go to that for a second. It comes to us via Mike candlestick. Is his last name? We're going to go with that, because we want to do a candlestick. Speaking of the world series, right? I mean, that's pretty catchy. But his name's Mike. And he asked a simple question. He mailed into our general inquiries and asked real estate or color diamonds. If I was to buy one or the other today, which one should it be? And although I certainly have had my fair share of investment opportunities, and I have in fact invested and speculated in real estate, I think it comes down to a comparison. And what I did was I told Mike, unless you're prepared to think about the whole picture, you shouldn't weigh the two options exactly the same. And what I mean by that is that most Canadians buy real estate and think, Hey, I bought it for 300,000. I sold it for 500,000. I made 200,000. Well, with a diamond, you can honestly say that by bought it for 300,000. And that was my all-in cost. And I sold it for 500,000. There were no ongoing costs. There were maintenance, management fees or maintenance fees or ongoing yearly fees. I put it in my saved deposit box, which might have cost $30 a year. Maybe even I put it in the setting, which was included in the cost sold it for 500,000. I made a tidy lump sum 200 grand walked away. But when you're thinking about real estate, what most Canadian real estate investors don't take into consideration is what goes into the management of that piece of property. Do they take into consideration the annual cost, which includes the mortgage utilities, maintenance and property taxes, though there are others, snow plowing, right? Fixing roofs, landscaping, right, right? There's a lot, bad renders, what goes in there? Not to mention the amount of time I as an individual actually put into that piece of real estate in my given man hours. Those things don't go into the calculation, what I made. And I listened to a very interesting interview. It was Larry Berman from B&N during the week. And he wrote that as a transcript on the B&N site. It's called a sobering look at investing in real estate. And I'll quote from a paragraph in here. And it's interesting because he says, if your house traded on a stock exchange and you could buy it today, would you? Would you sell it? If we look at investing in housing from the perspective of a portfolio manager, you might get a sobering surprise. You might not. But the fact is, having said that he further goes on to stay annual ownership costs as a percentage of household income could be looked at in a few different ways. One interesting twist would be to look at it like in a mirror, or what your management expense would be. Your management expense ratio would be on, say, a mutual fund, or another way to look at it would be like a price to earnings ratio. Now he states that on the Meur front, the annual costs include mortgage utilities, maintenance, and property taxes. Those are the biggies. Actually, very few consider the maintenance costs like gardening, snow removal, general paint upkeep to be a cost. But it can be material. The graphic in the video that was attached to that blog shows the cost like a Meur as a percentage of the household income in Vancouver in Toronto. And he further goes on to compare them with places like New York. Now, if you're a listener, I'm pretty sure you would agree to buy a detached house in New York City. Let's say in Manhattan in the core, not going to happen, right? And we think astronomical. It's ridiculous how expensive is no way you can compare that to Toronto. But if we compare it as we would a management expense ratio, it's actually less expensive to buy in New York than it is in Toronto and Vancouver. Vancouver is off the chart. They would apply that ratio will be 6.1 in New York. It would be 8.3 in Toronto will be 11 plus in Vancouver. So when you add all of that in, what you get as a big snapshot saying to yourself, hey, have I done my due diligence? Am I thinking straight here? Do I want to put all this time and effort into something that will get me a return? But I could do the same thing on a coloured diamond, own that coloured diamond, enjoy that coloured diamond, and walk away having put no stone removal into it. The other thing as well in the States, you can write off your interest on the mortgage, which you can't do in Canada. So that brings the cost down as well. But I think in that comparison, I think we want to also discuss the idea that real estate is not new for a lot of people. And that idea of newness can hold people back from investing in something that could be even more profitable and/or easier. A lot of people, a lot of people want to feel like they're doing something. It's like driving. Well, I don't want to be driving and feel like I'm getting somewhere. I don't want to sit in the back. Similar with real estate, people would probably be more willing to buy something and fix it up because they feel like, oh, I know what I'm going to get when I buy this. I'm going to buy this property. Hopefully, there's no real big surprises here. And I'm going to fix it up and I'll sell it. I know what I'm doing. I've bought real estate before. I can do it again. Whereas diamonds are new. Diamonds are new. The successful people in real estate are the people that are in the trades, people that can put up dry or lay hardwood floors. Do plumbing. When you have to send outside for those trades, you're going to get killed. You don't make money. And the people that do it themselves, they're putting a lot of time into it. Time is money. It's as simple as that. It's easier to own a hard asset, whether it's gold, whether it's silver, whether it's a natural fancy colored diamond. You can put it away, sit on it, make money. They're proven assets that will give you a good return on investment while there's inflation and while there's all types of turbulence going on in these markets. The number is one eight seven seven eight silver online to guildhallwealth.com for more information and to look at the collection of diamonds guildhalldiamonds.com. I'll mention this as well on another website. Get your free gold.ca. Receive a one gram goal maple leaf coin for every five thousand dollars US invested in an RSP account. And to that extent, RSP TFS say the seminar is coming this Wednesday. That is November 4th, 7 to 9 p.m. The quest trade head office at Young and Finch one eight six six two seven four ninety five seventy. Get one of the remaining seats. And they'll see you there on Wednesday evening in North York. This has been the real money show on talk radio. I am six forty.