history lesson for all, page-36

Gold's a great long-term punt, right?

2 investors whom we shall call Pete and Skol.

Pete observes the great 1980 gold crash and vows to buy at the very bottom to ensure he's long-term winner, so he buys an ounce of gold at $300 in 1982. He buries it in the garden to keep it from prying gubbermint eyes and possible confiscation. (lol)

Naturally he won't be paying any taxes on the proceeds so in 2013 his gold is worth $1585.

Skol invests his $300 in Aussies Govt. Bonds which have a 30 year average of 9%.

From:

http://www.switzer.com.au/the-experts/christopher-joye/why-the-economist-is-wrong-on-aussie-housing/

Skol compounds the returns and because he's a law-abiding chap pays taxes of 25% on the proceeds so we'll compound the return at 6.75%.

After 31 years Skol's total is $2272, 43% ahead of Pete.