|
Real assets create real riches
USATODAY - Some of the sharpest
minds on Wall Street are betting that you'll make more money
in metals than Microsoft the next few years. The new bull market
is in stuff, not stocks, they say.
We're talking about land and
oil and gold, the commodities that once made John Jacob Astor,
John D. Rockefeller and the Hunt brothers very rich men.
Stocks have languished the
past five years, but commodities - real assets that you can touch,
see or taste - have soared. The Commodities Research Bureau index,
which measures a basket of commodity prices, has gained 36% since
the end of 1999. The Standard & Poor's 500-stock index, which
measures the performance of a basket of high- quality stocks,
is down 20%.
A soaring commodities cycle
can go on for "years, if not decades," says John Brynjolfsson,
manager of Pimco Commodity Real Return Strategy fund, one of
the few mutual funds that invests in commodities futures.
Complete article
Aden Sisters say
sell stocks, buy gold
The stock market has been rising
in a Bush rally ever since the election and the market has been
looking good. All of the stock indices hit new highs for the
move and the Dow Transportations and Amexreached new record highs.
Better economic news and the lower oil price were the main reasons
why, along with optimism the economy will continue doing well.
 The weaker dollar was considered a
plus since it helps exporters. There's also plenty of liquidity,
which has been giving all assets a boost, and interest rates
are still lower than the inflation rate.
Then why aren't we recommending stocks? Maybe were being too
cautious, but against this bullish backdrop there are greater
factors looming overhead and sooner or later they're going to
kick in, driving stocks lower. The market's on dangerous ground,
which is why we think it's best to stand aside and let others
take the risk.
On Gold - Gold and the currency markets are
now correcting following their strong rises. This is normal and
it doesn't change the major trends, which are up for gold and
the currencies and down for the U.S. dollar. In fact, the
current corrections are providing a good opportunity to buy,
if you haven't bought yet or to add to your positions.
|
Hedging: Dead? Buried?
Dormant? Resurgent?
The Alchemist -These days it
is rare to see the words 'gold' and 'hedging' in the same sentence.With
gold's recent rampant price performance and producers rolling
in cash, this pair of previously intimate bedfellows seems set
to remain estranged for the foreseeable future. Legacy positions
are being bought back or allowed to roll off, new hedging activity
is linked almost exclusively to project finance, and even then
only when required by lending banks. . .
In this [late 1990s] environment
of depressed prices and dismal prospects, it seemed unthinkable
that gold could ever rise, phoenix-like, from the ashes of its
obsolescence. But the confluence of three influences created
just such a
renaissance.
Complete article
What Could Go Wrong In 2005?
The Prudent Bear - DeTocqueville
once wrote, "The more things change, the more they stay
the same." In the case of the United States in 2005,
the opposite might be true: the more things stay the same, the
more they are likely to changefor the worse. In that regard,
compiling a list of potential threats to the US as we come into
the New Year represents nothing more than a longstanding catalogue
of economic policy making run amok. The same list could
have been drawn up in 2004, 2003, and even the years before that...
All of which is occurring against an increasingly problematic
Vietnam-style quagmire in Iraq, and the ongoing (and related)
problem of high energy prices, which are themselves spurring
an ever more frantic competition for energy security, thereby
intensifying existing global and regional rivalries.
Complete article
Every portfolio should
have a heart of gold
Financial Times - "You
should always, always, keep 10 percent of your portfolio in gold,"
says Frank Holmes, chief investment officer of US Global Investors,
a Texas-based group of funds. "It's a natural hedge, uncorrelated
with other asset classes. . .
Gold prices troughed during
the late 1990s when the focus was firmly on spectacular equity
market growth. The subsequent slide in stocks shifted attention
to alternative assets while, more recently, the dollar's fall
has helped boost gold, which tends to move in the opposite direction.
Spot prices for the metal have risen 57 per cent since January
2002 and now stand at more than $414 a troyounce from $278.7
three years ago.
Complete article
|
