In our August commentary we mentioned that energy stocks looked interesting: “Oil prices also look to have stabilized and we are beginning to look for opportunities in this beaten down sector.”
OUR AUGUST 2017 RESULTS
Here is the chart for the Energy Select Sector SPDR Fund (XLE US):
A nice little turn is starting to take shape…
Here is a link to Scott Grannis’s blog where he’s highlighted some interesting charts:
LINK: Big Picture Charts
The numbers are staggering.
One part that I would like you to pay particular attention to is not only long-term average equity returns, but long term-average equity returns after inflation.
If you do not put your money to work, inflation will gladly eat away at it bit by (not so little…) bit.
There is huge potential for social media in Africa and South-East Asia:LINK: Social Media -vs- Real World
Guess what? Facebook has been working on it for a while: LINK: Facebook Internet Drone
Our weighted average return in August was +1.28%, bringing our year-to-date return to +13.29%.
Going into August, we had reduced our positions in the technology sector. We did so because we had managed to make extraordinary profits in the sector this year, and decided to focus our efforts on less crowded trades.
As such, we continued to increase our positions in base metals miners. We find this sector attractive because it is wildly under-owned and has a minute weighting in the S&P 500 index (0.1%). As a new generation of investors dreams of start-up ‘unicorns’ and ‘mining’ virtual currency, we have been taking a decidedly ‘old school’ approach and buying quality mining companies that have emerged from cyclical lows with stronger balance sheets and are poised to benefit from global economic growth.
Last night JPMorgan Chase CEO Jamie Dimon took a shot at bitcoin, saying the cryptocurrency “is a fraud.”
Here’s the article: JPMorgan CEO Jamie Dimon says bitcoin is a ‘fraud’ that will eventually blow up
In the same time, people from the tech world are saying that “Bankers’ mistrust of bitcoin is still the greatest argument for it.”
Link: Bankers’ mistrust of bitcoin is still the greatest argument for it
Furthermore, Financial Times is posting graphs with a bubble forming pattern overlaying the Bitcoin price
From time to time we get a request from our clients and potential clients regarding investments in gold.
In our view gold isn’t the best investment as it isn’t generating any return. Yes, it’s been able to sustain it’s purchasing power though in very long time periods, we’re talking about decades and centuries.
Furthermore, gold is quite volatile and thus investor may lose some part of their investment. Gold’s performance has varied year by year. Picture below shows that gold had a real drawdown that lasted 32 years. Are you willing to hold an asset that is underperforming other asset classes and losing money by itself?
People tend to get preoccupied with things that are shiny. Investors often fall prey to the same instinct – especially those that are obsessed with gold. Such people are often referred to as ‘Gold Bugs’.
This years, Gold Bugs have been excited to point out that gold has outperformed the S&P 500 index year-to-date:
Congratulations! However, there is a far more interesting metals trade going on at the moment: base metals.
After a slow start to the year, base metals such as copper (sometimes referred to as “Dr.Copper”), zinc, and nickel have seen their prices appreciate significantly:
