30 days.
"Gold Prices Collapse As Everyone Remembers It’s Just Yellow Metal"
http://finance.yahoo.com/blogs/daily-ticker/gold-prices-collapse-everyo…
http://au.businessinsider.com/john-paulson-gold-stocks-performance-2013…
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But he can't even sell... his selling can trigger a further 10% drop. And when prime brokerages find out there will be the inevitable fronrunning. Doesn't he own quite a sizable position in the GLD etf?
Not to mention that a lot of the money in the gold fund is his own.
Over - bet ya a SB if you remind me
10% drop ? Are you kidding ? Bernanke did 6,65%...
I think that his gold fund won't close soon. He has a sizeable part of his wealth in it and he is too proud to admit failure. I am betting over as well.
Doesn't he and Soros own something like 7% of GLD? And didn't GLD sell off 10% right before tax day? It sold 7% today!!
Who's going to be bidding for gold when it traded at $275 only 13 years ago.
Everybody should have a bit of GLD as part of their portfolio.
I wish I was smart enough to understand gold. I've tried building models in my spare time and back-testing them (variables were basic stuff like growth in M1/M2, inflation, VIX, etc) and even got good results but still didn't trust them.
At the end of the day, if things go to total shit I still don't think a baker or butcher will give me food in exchange for the shiny yellow metal. I'll stick to physical USD currency, non-persishable goods, and ammunition.
There will always be demand for specialized funds, even if they are performing badly. Paulson's gold fund is a way for institutional investors to get the 5% (or whatever percentage it is) exposure to gold that they are mandated to maintain.
except that he has badly underperformed physical gold and he charges a large management and incentive fee. Although i guess the incentive fee is not a problem given his massive losses. If your intent was to get exposure to gold through this fund then you have failed miserably....gold is up over the life of the fund and he has still basically imploded.
If an investor wants long gold exposure, why don't he just buy the GLD ETF? You get the exposure without the high fees charged by active management.
Paulson’s PFR Gold Fund Fell 23% in June, 65% This Year lolz
http://www.bloomberg.com/news/2013-07-08/paulson-s-pfr-gold-fund-fell-2…
If I recall correctly part of the value added would be to find gold miners too. Surprisingly, the correlation between the performance of mining stocks and spot gold is not as significant as people would assume.
That said I agree with you. You can easily purchase GLD (which has low rollover risk when in contango) and there are plenty of Australia, Canadian and South African gold miners that trade as ADRs.
My favorite part of the article is "“Although the timing is uncertain, if you have a long-term view we believe the funds offer the potential for outsized returns,” the firm wrote in the letter." You are going to need an astronomical move upwards to not only recover a 65% loss but then have outsized returns on top of that. Especially considering the market is up significantly during the same time period he lost 65% so in reality he is starting even further in the hole.
I remember it fit relatively well with a global money supply stat. Also, it correlated pretty well with negative real short term rates. But in the end, all either told me were the direction and not the magnitude so it was really w/e. And not only did they not tell magnitude, you don't have an informational edge on any of the inputs anyways.
Yea it is ridiculous. However, when you're Paulson you can hold to your conviction. If I recall correctly Boone Pickens was down 90% in his natural gas fund.. and he was averaging down. Lucky for him oil rallied to $150 and nat gas to $15 and he ended up making a killing.
If gold sells sharply to the $1050 area by September then I'm def going to put an aggressive long on.. maybe even via leaps. It would signify that these major guys, Paulson or Soros, have puked some of their gold positions. I would then expect a sharp bounce in an asset that some people still deem as a potential currency alternative.
Fundamentally, I cannot see why gold (when not overvalued) wouldn't be a good investment when interest rates are at historical lows. You get almost no yield from Treasuries so you might as well have an inflation hedge through cap gains in gold. And now that gold has returned closer to historical levels, in real terms, it may be a good investment. Countries will also want to add more inventory for their reserve purposes. The problem is judging whether gold at ~$1,000 would be a good value (when it was $300 nominally in the 1990s). Also, when central banks start raising interest rates then prices will have a lot of downward pressure. I suppose it will have to do with forecasts of when the Fed meaningfully starts increasing the fed funds rate.
Methinks you should check again on this "you get almost no yield from Treasuries" idea. Central banks don't have to actually raise rates for market yields to rise (as you may have been able to observe recently, as well as in previous episodes).
An asset that does not produce cash flows is not an investment, it's a trade. I invest in gold doesn't mean anything...
That's semantics. How's a capital gains/inflation hedge decision not an "investment"? Even the definitions of trading and investing are blurry.
Also, investing in gold miners (which produce CFs) is over the long-term, as a portfolio, one as the same as investing in spot gold futures.
3.7% for the 30-yr... that's ~1.5% in real terms, no thanks.
I watch the fed fund futures. When 2015 rates are above 2% then Treasuries should become more attractive (and I'll dump my stocks). I'm too young to preserve wealth... need more yield and am willing to take the risk.
I don't like gold, but any commodity that retraces 25% of its value YTD deserves a look for a short-term bounce. I would only buy around 1050 if it continues to drop sharply (imo means someone is liquidating) by September. If it slowly trends lower then I would not go long. My risk reward would be 1:1 but being that 1,000 is a significant psychological level I would assume the probably for a $200 bounce would be greater than the probability for a $200 decline.
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