I'm actually a bit surprised by the weakness seen in $GOOG as their fundamentals are still in place and going strong. They are also developing a lucrative range of investments ranging from self driving tech to robotics, This differs significantly from $FB despite the fact that both companies are in the business of customer data.
"If you’re finding yourself even a little worried – about stocks, inflation, or geopolitical unrest – now’s a great time to add a gold hedge to your portfolio."
I understand actual gold has traditionally served as an inflation hedge but using paper gold like GLD as an inflation hedge makes no sense to me. This is essentially hedging inflation with mass printed paper which seems very contradictory and counterintuitive. GLD in particular so famously promises to be fully backed by physical gold bullion but yet they adamantly deny retail investors the right to any of it. This alone guarantees GLD to be nothing more than paper at the end of the day. I'm also left wondering why? There are many profitable gold selling businesses in the world. GLD could even charge exorbitant fees for delivery of said 'gold' but they don't for some strange reason.
The commonly discussed GLD subcustodial audit loophole is also a point of immense interest. "the Trustee may have no right to visit the premises of any subcustodian for the purposes of examining the Trust’s gold bars or any records maintained by the subcustodian, and no subcustodian will be obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian" Why does this audit loophole exist?
For anyone interested but have not heard, I recommend looking into CNBC's Bob Pisani making a highly publicized visit to GLD's gold vault in a segment called Gold Rush: The Mother Lode. GLD's management organized this visit to show that GLD's gold actually exists. However, the gold bar held up by Mr. Pisani showed a serial number of ZJ6752 which did not show up on the latest bar list during that time. It was later discovered that this "GLD" bar actually belonged to ETF Securities.
Interesting points Mish. It has also been assumed by many that this merger will be a boon for shareholders but will that really be the case? The regulatory framework for the health insurance industry has been tumultuous and can eat away at margins. Other costs are rising as well in this particular industry.
Thank you Jeff for this very insightful piece. Retailers in apparel seemed especially slow to adapt to the threat of online stores. This is still true today. I'm expecting online businesses such as AMZN to continue taking market share from them as long as they are unable to develop a competitive online presence.
I can't say I'm surprised. There has been a frequent criticism directed at SNAP for being nothing more than a fad among the teenager bracket. SNAP is trying to compete with FB when FB has all the leverage with its many multiples larger base. What can SNAP do that FB can't replicate or do better? I don't see SNAP ever escaping FB's shadow.
"The knee-jerk reaction is to simply snap up shares of an exchange-traded fund (ETF) such as the SPDR Gold Trust (NYSE: GLD), but the ETF comes with an annual expense ratio of 0.4% that is eating into your returns."
Not only that but this fund claims to be fully backed by physical gold bullion yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper at the end of the day. Furthermore, GLD’s prospectus is chalk full of weasel clauses and legal loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings.
I also remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
#OPEC can very well try to appear unfazed but their influence on the global #oil market has been on a decline for quite some time. What we are seeing now is a perfect example of their waning influence. They've gone through considerable lengths with the current production deals in order to prop up the oil price. The end result is a stabilization around $50 - $60. The rebound in US oil rigs ensures that the oil price will never reach its previous highs. $OIL$UCO$USO
Very insightful piece Raúl. Most of this seems like a drop in the bucket compared to China plowing $360 billion into renewable by 2020. I believe that has to be the biggest investment by far with no comparable investments to date.
Moby, thank you for your insight into $SILJ. I've been looking for an alternative to $GLD ever since I did my due diligence into that fund and found it to be quite shady. GLD so famously claim that they are 100% backed but obstinately refuse to give investors access to any of the 'claimed' gold. Why? There are many profitable gold selling businesses in the world. GLD could even charge exorbitant fees for delivery of said gold but they don't for some strange reason.
The frequently referenced GLD subcustodian audit loophole makes me question this fund even more. What guarantees do we have that they have not leased the gold from someone else? i.e. HSBC. Are they leasing it to someone else? How many claims are there on the gold aka hypothecation? GLD's structure seems to be deliberately vague and intentionally flawed. GLD's custodian, HSBC, with their long history of fraud certainly do not inspire confidence either.
For anyone interested in GLD but have not heard about CNBC's Bob Pisani's visit to GLD's #gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
Note that even on the subject of GLD's questionable insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at (866) 320-4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
Simple Digressions, once again you are not being entirely truthful here. It wasn't until mid February when the holdings truly start plummeting. You can see $GLD's holdings increasing or holding steady throughout January. Either way, this period contracts your claim of this indicator being reliable. There are other times when this indicator failed too if you want to go further.
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U.S. Major Indices Fail To Hold Onto Gains In 2018 Q1
I'm actually a bit surprised by the weakness seen in $GOOG as their fundamentals are still in place and going strong. They are also developing a lucrative range of investments ranging from self driving tech to robotics, This differs significantly from $FB despite the fact that both companies are in the business of customer data.
Opportunity: Gold On The Move
"If you’re finding yourself even a little worried – about stocks, inflation, or geopolitical unrest – now’s a great time to add a gold hedge to your portfolio."
I understand actual gold has traditionally served as an inflation hedge but using paper gold like GLD as an inflation hedge makes no sense to me. This is essentially hedging inflation with mass printed paper which seems very contradictory and counterintuitive. GLD in particular so famously promises to be fully backed by physical gold bullion but yet they adamantly deny retail investors the right to any of it. This alone guarantees GLD to be nothing more than paper at the end of the day. I'm also left wondering why? There are many profitable gold selling businesses in the world. GLD could even charge exorbitant fees for delivery of said 'gold' but they don't for some strange reason.
The commonly discussed GLD subcustodial audit loophole is also a point of immense interest. "the Trustee may have no right to visit the premises of any subcustodian for the purposes of examining the Trust’s gold bars or any records maintained by the subcustodian, and no subcustodian will be obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian" Why does this audit loophole exist?
For anyone interested but have not heard, I recommend looking into CNBC's Bob Pisani making a highly publicized visit to GLD's gold vault in a segment called Gold Rush: The Mother Lode. GLD's management organized this visit to show that GLD's gold actually exists. However, the gold bar held up by Mr. Pisani showed a serial number of ZJ6752 which did not show up on the latest bar list during that time. It was later discovered that this "GLD" bar actually belonged to ETF Securities.
Walmart Seeks To Buy Humana: Good Idea? Walmart The Godsend?
Interesting points Mish. It has also been assumed by many that this merger will be a boon for shareholders but will that really be the case? The regulatory framework for the health insurance industry has been tumultuous and can eat away at margins. Other costs are rising as well in this particular industry.
The Best And Worst Performing Sectors In 2017
Thank you Jeff for this very insightful piece. Retailers in apparel seemed especially slow to adapt to the threat of online stores. This is still true today. I'm expecting online businesses such as AMZN to continue taking market share from them as long as they are unable to develop a competitive online presence.
SNAP Plummets To New Record Low After Missing Everything, Burns Through A Quarter Billion
I can't say I'm surprised. There has been a frequent criticism directed at SNAP for being nothing more than a fad among the teenager bracket. SNAP is trying to compete with FB when FB has all the leverage with its many multiples larger base. What can SNAP do that FB can't replicate or do better? I don't see SNAP ever escaping FB's shadow.
Gold Is Your Insurance Policy Against Market Turmoil
"The knee-jerk reaction is to simply snap up shares of an exchange-traded fund (ETF) such as the SPDR Gold Trust (NYSE: GLD), but the ETF comes with an annual expense ratio of 0.4% that is eating into your returns."
Not only that but this fund claims to be fully backed by physical gold bullion yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper at the end of the day. Furthermore, GLD’s prospectus is chalk full of weasel clauses and legal loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings.
I also remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
The Oil War Is Only Just Getting Started
#OPEC can very well try to appear unfazed but their influence on the global #oil market has been on a decline for quite some time. What we are seeing now is a perfect example of their waning influence. They've gone through considerable lengths with the current production deals in order to prop up the oil price. The end result is a stabilization around $50 - $60. The rebound in US oil rigs ensures that the oil price will never reach its previous highs. $OIL $UCO $USO
Renewables, Absolution And Deceit
Very insightful piece Raúl. Most of this seems like a drop in the bucket compared to China plowing $360 billion into renewable by 2020. I believe that has to be the biggest investment by far with no comparable investments to date.
The Best ETF To Profit From Gold
Moby, thank you for your insight into $SILJ. I've been looking for an alternative to $GLD ever since I did my due diligence into that fund and found it to be quite shady. GLD so famously claim that they are 100% backed but obstinately refuse to give investors access to any of the 'claimed' gold. Why? There are many profitable gold selling businesses in the world. GLD could even charge exorbitant fees for delivery of said gold but they don't for some strange reason.
The frequently referenced GLD subcustodian audit loophole makes me question this fund even more. What guarantees do we have that they have not leased the gold from someone else? i.e. HSBC. Are they leasing it to someone else? How many claims are there on the gold aka hypothecation? GLD's structure seems to be deliberately vague and intentionally flawed. GLD's custodian, HSBC, with their long history of fraud certainly do not inspire confidence either.
For anyone interested in GLD but have not heard about CNBC's Bob Pisani's visit to GLD's #gold vault, I recommend checking it out. His visit is documented in a segment called Gold Rush: The Mother Lode. This entire segment was organized by GLD's management to prove that their gold actually exists but the gold bar held up by Mr. Pisani displayed a serial of ZJ6752. This serial did not show up on the latest bar list during that time. Cheviot Asset Management’s Ned Naylor-Leyland discovered that this "GLD" bar actually belonged to ETF Securities.
Note that even on the subject of GLD's questionable insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at (866) 320-4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
This Gold Rally Is Suspicious
Simple Digressions, once again you are not being entirely truthful here. It wasn't until mid February when the holdings truly start plummeting. You can see $GLD's holdings increasing or holding steady throughout January. Either way, this period contracts your claim of this indicator being reliable. There are other times when this indicator failed too if you want to go further.