The Daily Reckoning Australia has very stimulating thoughts today.
(1) Dan Denning quotes a friend (David Evans) on the divergence between physical gold and shares in gold mining companies:
If the price of gold rises a lot, gold shares have greater leverage and will tend to go up more than gold bars (the cost of mining the gold stays constant, but the price of the mined gold goes up). When the general public gets involved and everyone just wants gold, gold bars tend to appreciate faster... The obvious strategy is to own gold shares now, and when every man and his dog is clamouring for gold, sell your gold shares and buy gold bars to enjoy the last part of the ride.
So when I looked at gold dropping with the Dow, maybe I should have also taken a peek at what gold shares were doing at the same time. For example, Newmont Mining opened yesterday at $40.30 and closed up at $41.07, whereas gold for delivery in December fell by $2.70.
(2) Chris Mayer looks at agricultural land in Brazil and Argentina, in the light of a hungry and resource-limited China:
In Brazil and Argentina, you have one of the few places left in the world where you can acquire large tracts of land in temperate climates with plenty of rainfall to support large-scale agriculture. Already, the two countries produce about one-third of the world’s agricultural commodities. As China is the world’s workshop and India its back office, so has South America become its breadbasket.
Maybe this is why Hugh Hendry and his colleagues have just launched the Eclectica Agriculture Fund.
No comments:
Post a Comment