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Jason Zweig: Let’s Be Honest About Gold: It’s A Pet Rock
After the financial crisis and the correction bottomed, and my TGLDX went from the low 20s (my entry) to around 80, that warm "pet rock" provided me with an extraordinarily pleasurable fondle! And things are setting up that lead to speculate it could happen again .... with my "full consent"--- honey, I'm letting you know ahead of time... for you and only you, yes means YES, forever!
Yikes - After holding up very well earlier in the year, SGGDX appears to have entered a nose-dive. Down 12% YTD and 32% over 1 year. The other gold fund I track, OPPGX, is doing even worse.
I'm agnostic on gold. We've gone round and round on this one in the past. Nothing to add here that I haven't previously said. However, having been burned myself a few years ago in OPGSX, I'd rather track these things than own them. Just a very tough way to make a living.
Former First Eagle manager, Jean-Marie Eveillard, of First Eagle funds, always like to hold some gold in addition to cash in the global funds - conservative and cautious investor.
RE: Jean-Marie Eveillard, of First Eagle funds and others like him are arguably smart, professional money managers. Gold and other precious metals are easily tradeable commodities. I fail to see why these smart managers can't move in or out of gold as their markets and market values dictate. I see no compelling reason whatsoever to hold it or other PM's in a portfolio just because. In the current market environment gold is no better a store of value than my septic tank.
To be fair, I own gold. I own gold panda coins because they're enjoyable to look at.
However, having been burned myself a few years ago in OPGSX, I'd rather track these things than own them. Just a very tough way to make a living.
I'm on board with you Hank. Gold and PM miners are the essence of speculation investing IMO. I jumped on the band wagon a bit back in the old FundAlarm days (USAGX, UNWPX, TGLDX). May be the worst advice I ever followed here. My own fault for jumping on. On the other hand, I'm sure some will say they've made money with PM's. They are better at it then me.
At different timeframe when the inflation rates were double digits, I am sure many had made money on PM. Today situation is quite different and PM don't fit anymore, at least in my portfolio.
Got rid of a slug of GLD about 18 months ago that I inherited 30 months ago. Lost 20% in value in those intervening months, have made it up since then in various small cap stocks, but it wasn't easy. Recently also sold some gold coins; they kept going down in value. All the political instability which in previous periods kept the value up was not working this time around. Sometimes "this time is different" actually is true
While some have been selling their gold holdings old_skeet has been building a position in SGGDX while gold's price is back of $1250.00 an ounce; and, by my research this is below its all in cost to mine. Time will tell if building this position is prudent.
Sorry for those so invested. No joy in Mudville tonight. Of the two funds I referenced above, SGGDX dropped 7% today and OPGSX lost 9%. There appeared strong deflationary pressures across the entire commodities sector - from agriculture to energy to metals. Has to be disconcerting to some market watchers.
The strong Dollar has much to do with it. Yet, when I look at tomatoes selling for $2 apiece at the local grocery in mid-summer and than observe AG prices plunging on the commodities exchange ... it doesn't make sense. - "Casey at the Bat": http://www.baseball-almanac.com/poetry/po_case.shtml
"Yet, when I look at tomatoes selling for $2 apiece at the local grocery in mid-summer and than observe AG prices plunging on the commodities exchange ... it doesn't make sense."
Tell me! But "there's no inflation". What's wrong with this picture?
Currently, only have a small position in SGGDX at about 0.5% of the overall portfolio. Looking to build out to about 1.5% to 2.0%.
Sometimes it takes a strong constitution to continue when things are moving against one. However, the buy strategy was to average in over time and price movement. And, my thinking is the best time to add an asset class to a portfolio is when it is out of favor and oversold.
OJ: A lot of help you are . Ya know, I stared at those tomatoes for a while - and than passed on them. But to your point - kept thinking about this year's 1% SS "cola" increase or whatever it was. Than things made even less sense.
Of course the experts will point out that food prices are always volatile and that some things, like cell phones and TVs, have been dropping in price keeping inflation low. Still ....seems mighty strange.
@hank. Your comment on the tomatoes reminds me of the 1973 film Soylent Green where I think one went for $250. Actually over the years my attempt at growing tomatoes in my back yard is similar. After buying the plants, the best soil, the mulch, plant food, I figure each tomato I would get cost at least $25.00. Growing them in the strong New Mexico sun and summerheat not like growing them in my former east coast home.
Brother plants tomatoes & decides to bed them in grass clippings. Only he forgot that a few days before mowing he used weed & feed on the grass. Now those tomatoes , or should I say those that survived, were at a $25 price. Good investing & gardening, Derf
Comments
I'm agnostic on gold. We've gone round and round on this one in the past. Nothing to add here that I haven't previously said. However, having been burned myself a few years ago in OPGSX, I'd rather track these things than own them. Just a very tough way to make a living.
To be fair, I own gold. I own gold panda coins because they're enjoyable to look at.
The strong Dollar has much to do with it. Yet, when I look at tomatoes selling for $2 apiece at the local grocery in mid-summer and than observe AG prices plunging on the commodities exchange ... it doesn't make sense.
-
"Casey at the Bat": http://www.baseball-almanac.com/poetry/po_case.shtml
Tell me! But "there's no inflation". What's wrong with this picture?
I continue in building my position in SGGDX.
Will most likely buy a little more tomorrow.
Currently, only have a small position in SGGDX at about 0.5% of the overall portfolio. Looking to build out to about 1.5% to 2.0%.
Sometimes it takes a strong constitution to continue when things are moving against one. However, the buy strategy was to average in over time and price movement. And, my thinking is the best time to add an asset class to a portfolio is when it is out of favor and oversold.
Skeet
OJ: A lot of help you are
Of course the experts will point out that food prices are always volatile and that some things, like cell phones and TVs, have been dropping in price keeping inflation low. Still ....seems mighty strange.
Good investing & gardening,
Derf