Only you know how much gold you should own. The reason why is because it doesn’t pay a dividend and it can be expensive to hold. One way to back into the right amount for you is to determine how much you can “afford” to hold in gold if it does nothing. In other words, understand that above a certin amount your plan is to give it to the next generation. When you think about it like this you immediately remove the “pressure” of “needing” it to do something for you in your lifetime. The simple approach is figuring out your other investment needs and then go after your gold component as if you … [Read more...]
Archives for January 2021
Your Retirement Life: Meet Your BMW Club Racing Program Director
I had a great conversation with my friend and client Wayne Dobson this week. We were talking about his decision to retire and how he’s currently set-up. Not one to drive quietly off into the sunset, Wayne told me about his next endeavor with BimmerWorld BMW CCA Club Racing Schools. Enjoy! BimmerWorld BMW CCA Club Racing Schools announced on January 10: In our continuing effort to bring the sprint racing community nothing but the best in on-track experience, I am extremely pleased to announce that Wayne Dobson has been appointed to lead our much-admired BimmerWorld BMW CCA Club Racing … [Read more...]
Corporations Rush to Reap Equity Windfall
With equity valuations at or near record levels by many measures, publicly traded corporations are racing to sell shares into the market. Karen Langley reports at The Wall Street Journal: Public companies have been taking advantage of a hot stock market by issuing shares at record pace in January. U.S.-listed companies have conducted 57 follow-on stock offerings this year through Wednesday, raising $12.35 billion. Both numbers are records for this point in the year, according to Dealogic data going back to 1995. Many of the offerings have been from small pharmaceutical and other … [Read more...]
Do You Know Who’s the Largest Owner of Farmland in America?
Are you down with OSB? It stands for oriented strand board. It’s used in construction similar to the way plywood is used—for roofs, subfloors, etc. A client of mine used to be an OSB trader. He’s stepped away from that a bit lately, but like any former pro, he still follows his team, so to speak. He tells me prices for OSB are at or near 2008-pre-real estate crash levels. That doesn’t mean he’s predicting a crash. He’s just telling me the lay of the land. Great conversation. He also tells me that as commodity prices rise, farmland ownership is getting more attractive. But, if you’re not … [Read more...]
Investors Are Being Conditioned Not To Recognize the Danger
The Financial Times reports on comments by Seth Klarman comparing investors to frogs in slowly boiling water who can't feel the change in temperature until it's too late, writing: Seth Klarman, the founder of hedge fund Baupost Group, has told clients central bank policies and government stimulus have convinced investors that risk “has simply vanished”, leaving the market unable to fulfil its role as a price discovery mechanism. The private letter to investors in his fund, seen by the Financial Times, amounts to a damning critique of market behaviour by one of the world’s foremost value … [Read more...]
I’ve Been in Richard Young’s Maximizers for Years
In speaking with a prospective client yesterday, he told me he’s been in Richard C. Young’s Maximizers portfolio for years. He said he uses an advisor but told him, “Here’s what I want to own, can you do it for me?” And he did. Fast forward—after making a big contribution to the account this year, his “guy” wants to put the money in some hedge fund deal. My new client said, “Don’t do a thing.” The “guy” was chasing money–chasing money with other people’s money. What’s there to lose, right? In times like these, you need to protect your assets like they’re the last ones you’ll ever … [Read more...]
What Is the Stock Market’s Link to the Economy?
At The Wall Street Journal, Justin Lahart examines the stock market's link to the economy, and whether the market could fall even during strong economic growth. He writes: We keep being reminded that the stock market isn’t the economy. But then, is it possible for the market to go into a long bear run even if the economy booms? Yes, although there is little record of it ever happening. U.S. stocks’ performance over the past year has been more than breathtaking. Even though the U.S. economy is in decidedly worse shape than it was before the Covid-19 crisis started, with millions of … [Read more...]
Smith Family Robinson in Live Free or Die, NH
Where should you live today? If you’ve taken an online survey, you might find yourself a perfect fit in any small town, USA. Combine this with your politics and you might find yourself living in 1776 or not far from Plymouth Rock with the pilgrims. Well that’s not gonna happen. So now what? Are you familiar with the Swiss Way? Or the Swiss Family Robinson? It’s a lifestyle. For me? I spend time at my log cabin in Live Free or Die, NH and coastal Newport, RI. We broke ground in NH for the winter skiing, but as the saying goes out west: “Visit for the winters, stay for the summers.” There’s … [Read more...]
Dick Young’s Safe America: Chapter 1, Part I
Debbie and I are neither members of any political party nor contribute to any PAC. Our research interest is policy rather than politics. Our methodology, for over four decades, has centered on inference reading and anecdotal evidence gathering. Originally posted on Young's World Money Forecast. … [Read more...]
Whether Through Audacity or Ignorance, Stock Fundamentals Are Being Ignored
James Mackintosh reports at the Wall Street Journal that stock fundamentals are being ignored by investors. It's not clear whether the cause is an influx of new investors who are ignorant of fundamental analysis, or heightened appetite for risk. Whatever it is, it's probably unsafe for the market. Mackintosh writes: Sometimes it’s hard to argue that market capitalism has any chance of correctly allocating money to the companies that can use it best. Case in point: Stock-market performance this year has been driven by the raw share price, with lower-priced stocks doing better and higher-priced … [Read more...]