Hello Pezz, Today’s Report:
(a) Purchased some physical Panda and Kangaroo gold bullion at average of wasting USD 935/oz, and so mineralized some more excess HKD savings for possible future use by placing the surplus out of harm’s way here and now
(b) Interestingly, the HK distributor of Panda gold bullion and its parent, the Bank of China, had in total only three coins (actually they were display window ones, but i took them anyway)
(c) I went to Hang Seng Bank HQ (largest monetary gold dealer in gold-mad HK, a subsidiary of HSBC), as I had the cash in my camper's pants pocket already for mineralization.
Hang Seng was out of all flavors of coins (Eagle, Maple Leaf, Rand, Philharmonic) except the Aussie Kangaroos. I loaded up to the limit set for non-bank customers (20), and for the first time ever, the customer next to me at the counter meant mostly for remittance and collections, a kiwi couple, were also buying coins. Imagine that, two coin buyers side by side, kindred soul mates, perfectly understanding each other. They bought what I was not allowed to buy, 27 coins, and between us two, we cleaned Hang Seng Bank and all of Hong Kong CBD of all monetary gold inventories.
(d) The Dubai Gold and Commodities Exchange said investors in its October futures gold contract took physical delivery of a record 908kg of bullion instead of settling in cash. In August, investors settled primarily in cash, taking just 15kg of physical delivery.
(e) Before the gold bullion hunt, I had breakfast with a family office officer, the premier Asian shipping analyst, a hedge fund manager and chief of sales whose outfit’s YTD performance is summarized just so simply -
“Tai Tam returned gross absolute returns of 2.88% in September, 49.7% YTD. Since our inception on
Aug 2007, we’ve achieved 65.8% gross compounded annual return, a Sharpe ratio of 1.48 and -.09% correlation to S&P500.”
(f) my take-aways from breakfast meeting are:
- Cash is good now
- Cash flow is better now and later
- Gold is best cash for past 8 years, year after year, and without fuss
- Gold is flowing less (to witness gold lease rate, physical tightness, and apparent retail uptake)
- 25% of all hedge funds will die within short time span
- There are now many bargain and yielding shares, at divvy yields of 15-20%
- Buying early is as toxic as selling late (Tai Tam figures 7500 is bottom)
- On macro/markets, the center may hold this iteration, but if so due to mind-boggling silly officialdom intervention, merely sets us up for a collapse of the flanks later, and after that, the murderous carnage focused on the then true center, perhaps just 3-10 years away, when China and India can say no to USA
(g) The real estate club I run had just renovated a still vacant small apartment building situated in central, a few doors down from the Chinese gold and silver exchange building. A potential renter spoke to me yesterday, wishing to lease all four units at the asking price, allowing the club a net yield of 7.20%.
- Issue, the guy intends to operate 4 one-woman brothels (legal in freedom HKG) on the premise
- I struggled with demons within me and had to refuse the offer
- However, I did work out the implied economics of the schema based on knowledge garnered here and there, and must say, as a business, the schema is a good one, providing for healthy real estate rental flow, while waiting for systemic appreciation, and gain access to a perhaps needed service, as well as helping the economy in response to inevitable and coming calls for patriotism
- When franchised, the combined real estate and service business can gain rapid scale
Chugs, TJ
This is interesting:
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