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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Jim Willie CB who wrote (51272)	5/10/2002 11:26:43 AM
From: stockman_scott	Read Replies (1) of 65232

Gold shares look up Friday 10 May 2002 BusinessDay --------------------------- FOR the first time in many years it is prudent to invest a portion of your portfolio in gold shares on a buy and hold basis. But be prepared for some short-term volatility. This advice comes from Willi Jonker, a veteran asset manager who might be remembered as one of those responsible for the spectacular performance of the Norwich Unit Trust, a general equity fund, in the mid-1990s. Jonker now runs Interneuron, an investment company. He said in the group's latest investment newsletter that movements in gold and gold shares should not be seen as part of the resources cycle but as part of currency market movements. Jonker said circumstances were now similar to what they were in the late 1960s and early 1970s. At that stage stock markets had peaked and then receded with the advent of mainframes. In today's terms that would be PCs. Inflation was generally low throughout the world and America was fighting a war in Vietnam that it could not win. The oil-producing nations started to withhold oil to shift the balance of power, resulting in higher inflation worldwide and a run in the price of gold. Jonker argued that although gold has recently risen 15% to more than $300, it was a small rise compared with the peak of $850 in January 1980. Nor were gold shares too highly priced compared to the price of gold, as a comparison of AngloGold share price with the rand gold price over time showed. Less than 1% of the money invested in shares globally was invested in gold shares. What would happen, Jonker asked, if investors decided to double that investment. Business Day businessday.co.za

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