Gold Royalty Companies: Early in October I stumbled across Mining Stock Monkey looking for gold miners. I ended up taking a 4% position in a medium sized gold royalty company. They're a better alternative to miners, as they're not affected by rising costs, like Newmont was last month. But the big Gold Royalty companies are at nosebleed valuations. And the small ones are bleeding cash or reliant on one or two revenue streams. The medium sized ones that are just turning cashflow positive may be better bets. Mining Stock Monkey also has a youtube channel where he discusses details on some smaller companies.
Gold is finally starting to get attention, even from mainstream media like CNN. Worries me a bit as its getting too visible. But I'll hold my 10% (paper) gold and 8% mining and royalty companies (at buy price) for the long term, not try to trade around them. Theres a good chance gold stays rangebound for a long time, like oil in the past two years or Uranium in the past 12 months.
Physical Gold. Luke Gromen did an interview on gold, he mentioned paper gold, while he thinks the ETFs' units are backed by gold reserves, but the risk is with the LME ("where historically a lot of the GLD gold was"). Unallocated gold in LME. By "paper gold" he means "unallocated gold derivatives centred in London". Still trying to figure out what he means. But I'm thinking of converting my gold ETFs to physical. For most of the black swans I can think of:
- Taiwan war
- US civil war
- US govt devalues USD 10% in a day
...gold is an insurance, and the only insurance. If this shit actually happens, I'd be spending some uncomfortable nights wondering if my gold ETF positions were actually worth anything.
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