The news of poor acquisitions, dilution, rising input costs, poor returns, declining stock prices of miners are becoming baked-into prices. But who knows when the bottom occurs. All we know, is that all markets are cyclical. Hatred of an asset class or industry is what one seeks when searching for bargains.
The Golden Narrative
To market participants in 2013 gold means lack of confidence in money, and their behavior in buying and selling gold similarly reflects this meaning. Buying gold today is a statement that you believe that global economic events may spiral out of the control of Central Bankers. It is insurance against some sort of massive monetary policy mistake that cannot be fixed without re-conceptualizing the global economic regime – hyperinflation in a developed nation, the collapse of the Euro, something like that – not an expression of a commonly shared belief in some inherent value of gold.
The source of gold’s meaning, whether you are a market participant in 1895 or 2013, comes from the Common Knowledge regarding gold. J.P. Morgan said that gold is money, and he was right, but only because at the time he said it everyone believed that everyone believed that gold is money. Today that same statement is wrong, but only because no one believes that everyone believes that gold is money.
Read more: http://www.lemetropolecafe.com/kiki_table.cfm?pid=10861
What the $%^&! wrong with mining shares?
Sanjay Bakshi’s Way
Since I have family and friends living in Cuba, please let me take this moment to send my prayers to them as Tropical Storm Gordon bears down.
Life for the young and most Cubans is brutal under the Crastro brothers’ tyranny. See what Cubans have to say:A Glimpse of Cuba.
Azucar Amargar (Bitter Sugar-Life in Cuba for the young). Watch the first five minutes even if you can’t understand Spanish. A young revolutionary slowly discovers the truth. http://youtu.be/tHPGhgrGq7s
Sanjay Bakshi, A Graham-like Investor in India
Follow the links for this four-part interview. Go to other links. Good stuff. I am impressed with the curiosity and diligence of the Indian students and investors that I have been fortunate to meet over the years.
Here is the entire interview:Value-Investing-The-Sanjay-Bakshi-Way-Safal-Niveshak-Special
Since this blog is a learning resource, I will happily point you to other websites/blogs where you can learn.
Sanjay Bakshi is an investor and professor in India who applied the lessons of Graham, Buffett, and Munger to his teachings and investing. I recommend: http://www.sanjaybakshi.net/Sanjay_Bakshi/BFBV.html
You can download 9 lectures and peruse his site. Also, a student organized a few of his past posts–perhaps an easier way to find your interests.
Sanjay’s site will help deepen and broaden your thinking. For example:
Nothing is more dangerous than an idea when it is the only one you have–Emile Auguste Chartier
Why should I buy this stock?
Because it is cheap!
Under what circumstances would this be a mistake? Name three reasons why you could be wrong?
- Value Trap (declining industry)
- Bubble Market
I followed a golden rule that namely whenever a new observation or thought came across me, which was opposed to my general results to make a memorandum of it without fail and at once for I had found by experience that such facts or thoughts were more apt to escape from the memory than favorable ones. –Charles Darwin
I will post other recommended blogs, but when they fit a context.