Gold ETFs

There was a comment on some old post of mine from Seeking Alpha where the reader questioned the gold in the vault for the SPDR Gold Trust (GLD). He said something like if you want your gold, will it be there and I think he was implying the same for the other physical gold ETFs. We own GLD for our clients. This line of thinking is far from original, this has been a matter of doubt for a while with some people. I’m not sure what the origin for this is and I suppose it doesn’t really matter the origin, there are people who do not believe there is the proper amount of gold in the respective vaults. Chances are there is no convincing someone who believes the vaults are deficient that the correct amount is there. This is very simple however. Do you believe the gold is in there? I think this is a straight forward yes or no question. It is for me, I believe it is in there without hesitation. You either think it is there or you don’t. If you don’t then you clearly should not even consider owning the fund. There is no need to take on this type of worry in your portfolio. I have zero doubt the correct amount is there and so we own the fund. People seem to get very worked up about this which is ok I guess other than it seems like wasted negative energy. Perhaps there is something similar with my opinion about Chinese reverse mergers. While I certainly don’t think all of them are frauds the...

Gold ETFs

There was a comment on some old post of mine from Seeking Alpha where the reader questioned the gold in the vault for the SPDR Gold Trust (GLD). He said something like if you want your gold, will it be there and I think he was implying the same for the other physical gold ETFs. We own GLD for our clients. This line of thinking is far from original, this has been a matter of doubt for a while with some people. I’m not sure what the origin for this is and I suppose it doesn’t really matter the origin, there are people who do not believe there is the proper amount of gold in the respective vaults. Chances are there is no convincing someone who believes the vaults are deficient that the correct amount is there. This is very simple however. Do you believe the gold is in there? I think this is a straight forward yes or no question. It is for me, I believe it is in there without hesitation. You either think it is there or you don’t. If you don’t then you clearly should not even consider owning the fund. There is no need to take on this type of worry in your portfolio. I have zero doubt the correct amount is there and so we own the fund. People seem to get very worked up about this which is ok I guess other than it seems like wasted negative energy. Perhaps there is something similar with my opinion about Chinese reverse mergers. While I certainly don’t think all of them are frauds the...

Confirmation Bias, Again

Jeff Saut quoted a couple of investment luminaries this week including one I know personally. From Ken Fisher in 1989 was; Here’s the paradox: the odds are overwhelming I will end up richer by aiming for a good return rather than a brilliant return – and sleep better en route. And from Benjamin Graham; The essence of investment management is the management of RISKS, not the management of RETURNS. Well-managed portfolios start with this precept. From John Serapere I would add; 75-50 I don’t remember hearing that when I worked at Fisher (for a few months in 2002) but long time readers will know that the above, even if worded differently, are cornerstones to my approach. The 75-50 refers to a portfolio strategy that targets 75% of the upside of the market and only 50% of the downside (do the math, it works). In terms of people who read my site or others like it, many of you are do-it-yourselfers but may not necessarily be expert stock pickers (and you don’t have to be). The idea of going along for the ride during the up phases of the cycle and then being devoted to learning and understanding what causes large declines and seeking to take defensive action fairly early in the decline to avoid the full brunt of down a lot as I call it is not only valid, but I would say easier and places even less emphasis on stock picking which seems to be something many prefer not to do. Another aspect to avoiding the full brunt of down a lot is it places less importance in...

Confirmation Bias, Again

Jeff Saut quoted a couple of investment luminaries this week including one I know personally. From Ken Fisher in 1989 was; Here’s the paradox: the odds are overwhelming I will end up richer by aiming for a good return rather than a brilliant return – and sleep better en route. And from Benjamin Graham; The essence of investment management is the management of RISKS, not the management of RETURNS. Well-managed portfolios start with this precept. From John Serapere I would add; 75-50 I don’t remember hearing that when I worked at Fisher (for a few months in 2002) but long time readers will know that the above, even if worded differently, are cornerstones to my approach. The 75-50 refers to a portfolio strategy that targets 75% of the upside of the market and only 50% of the downside (do the math, it works). In terms of people who read my site or others like it, many of you are do-it-yourselfers but may not necessarily be expert stock pickers (and you don’t have to be). The idea of going along for the ride during the up phases of the cycle and then being devoted to learning and understanding what causes large declines and seeking to take defensive action fairly early in the decline to avoid the full brunt of down a lot as I call it is not only valid, but I would say easier and places even less emphasis on stock picking which seems to be something many prefer not to do. Another aspect to avoiding the full brunt of down a lot is it places less importance in...

Lost Decades?

Cam Hui had a post up exploring the current state of affairs in Europe as he ponders the ingredients for a lost decade. I would submit that if there are seeds for a lost decade then what it would actually be is a second lost decade. Over the last ten years the DAX is up 20%, Spain is up a little less, the CAC in France is down a hair more than 20% and the Netherlands are down about 35%. While we’re at the FTSE 100 is up single digits. Things not like about Europe include that the continent does not offer much diversification compared to other parts of the world, the demographics are lousy, the fundamentals stink in most places and threaten the one place that may not stink (Germany). Maybe Poland, Slovakia, Estonia and Turkey (if it every really gets in they way it wants) can help turn the fortunes around but there are far better foreign destinations to choose from. For this you need to look at the country indexes not the ETFs which have all done better because the US dollar has gone down against the Euro. That is Mount Rainier on our way to take Pep to the U-W training facility in Eatonville. I took that one with my phone. Thank you for all the suggestions on yesterday’s...