Scott, Nice interview with Caesar Bryan. While we're on the subject of gold funds, here is a philosophy statement from John Hathaway of Tocqueville Gold Fund, mentioned last week by JW. Philosophies are similar, however, for some reason, Schwab awards Tocqueville less risk than Gabelli. However, Gabelli has outperformed T this year, which would agree with the risk/reward formula....jj
tocquevillefunds.com
O Brother Homestake, Where Art Thou?
“If I buy a gold stock, it’s because I expect the gold price to go up. Why then would I buy shares of a company that hedges the gold price?” Such concerns are the subject of frequent e-mails to the Tocqueville web page asking what exposure The Tocqueville Gold Fund portfolio (TGLDX) has to hedged producers.
Do investor preferences make any difference to the performance and valuation of gold equities? It has seemed indisputable to me for years that exposure to a rising gold price creates value while hedging detracts. It is clear that the top performing shares of the last two years have been the unhedged producers, while the laggards have generally been lugging a hedge book. Over the past two years, the Amex Gold Bugs Index (HUI) rose 137% versus 49% for the Philadelphia Gold & Silver Index (XAU). The HUI index consists of unhedged gold equities, while the XAU is dominated by Barrick Gold, Placer Dome and Anglogold, three of the leading hedgers...(much more)..."
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