moore_capital54

Eric with respect, that post was extremely disappointing, and its quite the contrary. Your post proves you have absolutely no clue about how central banking works in a fiat money system.

Eric did you actually watch the video? Shilling is dead wrong here, he states that the fed creates reserve money (base money) and it's up to the borrowers to increase the money supply as a matter of stating the mechanics of conventional QE. But that is not what QE 2 was, in QE 2 the fed created money out of thin air (printing) and purchased securities from investors who had them for sale. The investor that sells securities to the fed is receiving new money that never before existed, which then circulates in the economy. I don't get why you guys keep trying to bash gold, when you have no exposure to it. You should truly not care about it. And I don't see any logic to the inflation adjusted high of gold argument either. Homes cost more inflation adjusted, cars cost more, burgers cost more and there are about 3 billion more human beings living on planet earth today vs 4 billion in 1980. Here is a good link for historical mine supply of gold: http://www.goldsheetlinks.com/production.htm Stating an inflation adjusted high has absolutely nothing to do with the fundamentals underlying the move in gold, and is purely a technical analysis tool, or a gimick. The fundamentals of gold tell a completely different story.

Dundee Capital not DCM. I hope thats a good thing motown ? :)

Here is an interesting post I Found online relating to this topic: In fact, most decent HFT shops have never had a down quarter. Indeed the very best handful of HFT shops have never had a down day. Of course, HFT doesn't manage a large pool of money since they have to be out by the close. So the real question is whether it's possible to be consistently profitable when carrying overnight risk. I find it hard to believe that a group of the best sytematic funds with overnight exposure, would outperform a group of the best human run funds on a long-term basis. It just sounds silly. Remember the coin flipping argument. My hunch is that within that index you have been relying on are constituents which are in fact HFT, and end the day with cash, and no overnight exposure. In which case you are comparing apples to oranges. The Quant funds using systems to value securities and deploying capital long-term are duds, in the case of Simmons he uses the performance of medallion which is HFT to lure sheep into his value based quant funds, extracting handsome fees for mediocre performance.

Harry may I ask if the constituents of the BarclaysHedge Systemtic include HFT Funds? Because as far as I know, based on personal experience, The only systematic funds that in fact perform better than humans are HFT's which imo should be outlawed.

The Great Adam Smith: The values of goods depend on the demand for them and the difficulty of acquiring them. Values must be measured by some common standard, and this standard must be something generally desired, so that men may be generally willing to take it in exchange. To secure this it should be something portable, divisible without loss, and durable. Gold and silver best fulfil these requirements. At first they were used by quantity or weight, without coinage, but eventually the state vouched for quantity and quality by its stamp. The stamp being 'easy workmanship' adds no considerable value. 'Coin is ever valued as a commodity in commerce as well as other goods; and that in proportion to the rarity of the metal, for the demand is universal.

I own the book and it is definitely a good one. I have recommended it to several posters here privately when asked for recommendations. I also suggest this book by Shayne Mcguire published very recently: http://www.amazon.com/Hard-Money-Taking-Higher-Investment/dp/0470612533/ref=pd_sim_b_4 I also highly suggest: Extraordinary Popular Delusions and the Madness of Crowds http://www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/1463740514/ref=sr_1_1?s=books&ie=UTF8&qid=1315253415&sr=1-1 I personally find it very helpful to read a wealth of nations every few years as well. Very hard to read Adam Smith's work without realizing how important gold is as a medium of exchange. I find it fascinating how modern economic theory can disregard the amount of "weight" placed on gold in Mr. Smith's teachings.

It trades on the TASE Exchange and the website is www.nrh.co.il

I have to say this is the first time I have ever heard of Ferrovial. Have you guys ever studied the company? Just reviewed their presentation and must say, this looks like a great business for buffett: http://www.ferrovial.com/recursos/doc/informacion_accionistas_e_inversores/presentaciones_corporativas/otras/1524_88882011114454.pdf Toll Roads and Airports! Lord knows I hate the 407, now I know who owns it!

These are very good events, we need more of this it's the only way we can truly flush out all the crap from the system. I have to say personally, I am very happy to see this news today: http://www.bloomberg.com/news/2011-09-05/acciona-joins-with-fraport-fcc-with-siemens-in-spanish-hub-bids.html

Great part of his letter here: Before Jeremy Grantham wrote those words in April 2011, we had already made the decision to bet our future on increasing our resource investment activities to “participate” in his “great fortune” and the24 sale of DundeeWealth was to allow the use of my harvest years to shareholders’ best advantage by working uniquely on what I know and love to do. Thus the new Dundee Corporation, along with its subsidiary, Dundee Capital markets, is uniquely committed to being exposed to those inflationary businesses that compose the hard assets of real estate and resources in general. After the sale of DundeeWealth we emerge as the new Dundee Corporation with a new subsidiary, Dundee Capital Markets, where we have chosen to specialize in those areas of our expertise and where we see growth and safety, over the foreseeable future. Our menu includes resources in general, real estate of all kinds, agriculture and infrastructure. We may waver a bit and get excited about some special situation in other areas, but we intend to be a leading expert in our chosen areas. For the most part, we are playing to our strength because Dundee Corporation for the last twentyͲtwo years was built on those inflation resistant areas of real estate and resources. Resources may scare some people, especially because after soaring for almost ten years and particularly the last few months, the short term thinkers are becoming wary and have been selling in recent days. We have learned to accept volatility in our quest for longer term profits and we do not think it is time to sell.The Wall Street Journal published a recent article that put it best from our viewpoint. To invest in the resource and/or the agricultural sectors remember the required “crucial test” – security. The world’s population is growing much faster than most of us realize. We now host almost 7 billion people in the world, up from 1.6 billion in 1900, and around 2 or 3 billion people away from where we will likely be in 25 or 30 years.Demand for many commodities is expected to rise dramatically, because new supply is not keeping pace and becomes more difficult to find. This becomes more obvious when we study the demographics and wealth creation in most of the world’s emerging countries. There are many such countries with GDP per person less than $1000 US. The World Bank has calculated that for each 10% increase in income per capita the world will enjoy a 10% growth in the use of metals and 6% increase in the use of grains and more than 4% increase in energy

Eric, The way to do it is on the Central Bank Level. It's just a matter of fixing a ratio of base money to the gold hoard. Making it redeemable is where it get's tricky. I will make a prediction here though that I believe at least one country (it could be the smallest one) will revert to a gold standard in the future. The US can't do it niether can major western economies. I hope China doesn't do it as it would be terrible for the rest of us, but China could theoretically do it. My bet is that someone like Chavez does it or Lichtenstein, a smaller nation with could easily manage a gold standard given their current gold hoard to base money ratios. You should also know that right now, by accident, 25% of CHF base money is backed by gold. Switzerland stopped selling their gold in 1999 and as a result still have a large hoard as compared to their base money.

Liberty I fully agree with you, and I personally prefer to buy shares as well, than to buy gold. But you have to agree that the average investor can more easily protect his nest egg with gold than picking stocks. Also I don't like Buffet's response of comparing gold from 1900. That is flawed, he has to compare gold from 1971 when it was demonetized. Only then can you actually refer to gold as an "investment" or "financial asset". As we are on the subject, let's now compare the returns: In 1971 gold was $35 now it's $1,850 In 1971 the dow was at 830 now it's at 11,240 Since 1971 buffet is wrong and gold has kicked the arse out of the dow. Moreoever, his comment about Nebraska land is too wrong, as I am sure he would not repeat such a statement today. All this proves to us all is that Buffett is only human, and hes good when he stays within his circle of competence.

#1 is Altius which I think can become the next Sprott in terms of market cap and prestige- Dalton is a gifted resource investor with a pristine geological background and incredible connections to an area of the world that is geologically exciting. #2 is NRH because I think he can become the next Altius (in terms of market cap and prestige) - No other capital allocator in the business that I know of, with a background in value investing. #3 is Aberdeen because it could become the next PineTree - Not in love with the leadership, but it's definitely not expensive. #4 is PineTree, when the juniors are rising there is no better place to be (100-300% gains are possible) - Personally hate the leadership and his compensation agreement. #5 is Cardero - Lot's of cash and they have already completed one exit for $88mm - Not in love with the leadership here as well (feels old and content) I have to add one more as well. Not sure if any of you know of Ned Goodman but he is truly an amazing investor and great capital allocator. Ned is a Geologist and loves the resource industry, he has made some incredible bets through Dundee, but after having sold his mutual fund business to Scotia he has decided to focus almost entirely on the resource sector. He now has $2B in cash to play with. Dundee Corp. http://www.dundeecorp.com/pdf/2010-Annual-Report.pdf - Great Annual Report

Turar, they can become worth less but not worthless, because under gold-standard system aggregate demand would only be derived from true economic activity. You would be surprised how much demand even for COKE and Gillette shavers would decline in a hard money system. Thats why it'll never happen. The system we are in today is truly frankenstein money travels so fast, its absolutely crazy. I sit with people every day and nobody is content, nothing is ever enough. Long gone are the savers, this generation has produced very little households that have acted in a fiscally responsible manner. And I blame that solely on the system that rewards debtors and punishes creditors.

I know ive posted this before but it's just so "poetic" that I have to again: http://www.fame.org/pdf/buffet3.pdf I hope we see the day, where someone asks buffett point blank about this article, and it is televised. Buffett thus far has been able to escape the question and answer with half arse answers, by comparing gold to equities and such. The people posing the question have been too stupid to know what to ask. The question I would ask buffett would be: 1) Do you prefer a fiat money system to a gold standard system? 2) Don't you agree that gold has intrinsic value as a currency and medium of exchange, as it has served as such for thousands of years. 3) If not explain the position of your father and where you disagree with him? 4) When you buy and sell shares of Exxon and Walmart would you rather have the proceeds priced in fiat money or gold-backed money?

Scorpion, that is incorrect. The 16.5mm fully diluted share count assumes the exercise of 5.0mm warrants outstanding at levels that are substantially higher (5,10,15,20) so under that scenario NRH would have an additional $17mm in cash. There are currently 9.38mm shares outstanding. And also with resource companies the way to compute intrinsic value is not based on the balance sheet where assets are carried at cost, rather some type of a DCF on their proven resource wealth. In this case you have to ask yourself what are comparable companies being valued at per tonne of iron ore or ounce of gold in the ground.

Eric I really don't want to engage in another gold argument because we have already been there and done that, and at this point everyone surely knows I am biased, and where I stand on this topic. But I just wanted to point out a major flaw in your post, (there are others but will point out the major one). Under scenario #1 you assume the world will just go on and you can still buy bread and butter etc, it'll just be priced in gold. What you are missing here sir, is that under this scenario all your previous wealth will have been significantly eroded. Sure if you have an occupation that is in demand you will continue to earn a salary that will provide you with comparable purchasing power (Think Buffet response to african student) but all the wealth you had accumulated under the fiat money system that was not fully invested in assets which, under a gold standard system would command the same valuations, would be basically worthless. There are no free lunches, this is a zero sum game and if we went back to the gold standard, a significant portion of the world's current wealth would be erased. But don't worry: We won't go back to the gold standard. Western Society does not have the discipline to do so. There are also major flaws in your argument of not having enough gold to support a gold standard but I plan on enjoying this Labor Day and will just leave it at that, just remember a gold standard is a system based on ratio's. What is going to happen under the most optimistic scenario is that we get QE3 here, and thing's chug along until we are back to growing again. We will see some type of inflation but it will be contained and the world goes on. This is the scenario I am hoping for and have invested in equities accordingly. But even under this scenario, I see gold as fundamentally transformed in terms of a financial asset. Many people are not realizing that gold rising from $250 to 1,800 has done something from a historical perspective that is much more meaningful than whatever happens next (even a drop back to 250, which is highly unlikely as only jewellery demand is 2,000 tonnes vs 2,500 tones of mine supply). It has proven to all the doubters that gold is in fact, an alternative currency. And as a financial asset, it is an extremely useful and important tool for investors. How many value investors who would have never touched gold will be all over it on a decline to 500 an ounce. In my opinion, a lot. You can already see in the arguments of a lot of value investors today lines such as (@ 250 I thought it was great, @ 500 fairly valued, but now it's crazy) I think those lines are nonsense and that the guys writing stuff like that never liked gold or had a meaningful portion of their assets in gold even @ 250 or 500. But you can bet your arse, that if gold ever goes back to 250 or 500, a lot of new value investors, contrarian or not will think of it as a potential buy. What I am saying here is that even in the most rosy world scenario where things get back to normal ala 2004-05-06... and gold is less than 1,000, there will be substantial investor interest and rightfully so. Mathematically, even if it does what it did from 2001-2011 once every 3 decades, it's worth holding 1-2% of your aum in it. Under a pessimistic scenario, Gold becomes 5-10% of an investors portfolio because of a global eruptions of hyperinflation. But after sustaining significant losses in my european portfolio today, I do not feel like exploring the pessimistic scenario any further :( A little anecdote is in order: My father owned bullion for many years, my grandfather left him some, and he had accumulated a few hundred ounces in his lifetime as well. Two weeks ago we were having dinner and got to speaking about the 1970-80's gold market. I asked my father if he ever felt like selling his gold back then, or how he felt after the gold price collapsed in the late 80's and early 90's. His answer really put everything into perspective. He said something like this: "When gold was rising, the economy was truly in bad shape, so as business slowed it was great to know that I owned gold and was somewhat shielded from the macro environment. And when thing's picked up business wise, the value of my gold declined but things got better in terms of the real fiat-based economy so I enjoyed the fruits of my labor." You see, there is simply no other asset, that functions like that, so perfectly and is completely removed from the financial system. You sit down and talk to any human being that owns physical gold, and you will get the same response. Nobody likes to sell gold, because nobody buys gold with all their money. I am absolutely sure that if yout ake the average household that owns physical gold and compare the cost basis to the value of their vehicles. The vehicles are worth more. Here is another interesting statistic. Annual Gold Supply is 93mm ounces. Of which industrial demand (including jewellry) is 70mm ounces. So we are left with 23mm ounces a year of available investment supply. That means 23 million people can buy one ounce a year. This is not a bubble. Last month the US Mint sold 160,000 ounces of gold, it was their highest month since january 2011. Do you think that 160k ounces were purchased by one person each on average? Heck no, one multi-millionaire or billionaire may have purchased 1k ounces each. I bet those 160,000 ounces went to less than 20,000 end users. This is not a bubble, this is an investment for intelligent, able, and historically conscious gentleman.

Scorpion, a very interesting company. It's still small but we own it. I suggest you read about the Owner/Manager as well, former Value Fund Manager who got into natural resources 3 years ago, and decided to focus on that full-time. He personally owns 60% of the shares and has been increasing his stake on the open market. The current market their listed on does not understand the business, but they have announced a listing on the NYSE AMEX. We are looking forward to that as a major re-rating event. The financials are too difficult for us to find on that site, since its in hebrew a language I do not speak. But I have attached the Bloomberg snapshot of the financials as it parses it in english. This is a low market cap company so I don't want to say too much but I will say this, with what I have seen thus far, I am VERY impressed. Roy has purchased ounces in the ground at absolutely amazing valuations. We own about 4% of the company. At the current valuation of $11mm, there is very little relevance between the market cap and the intrinsic value in my opinion. That being said you are buying shares in an Israeli listed company, which we personally have viewed as a big pain in the butt. 00150675.pdf

Mungerville, fantastic post and reconcilliation of Precious Metals (Gold) as it relates to the value investor. In reality, when adjusting for the price of gold over the last decade, almost every manager has underperformed. That is why many intelligent managers are now using a gold-class for their fund.

Along the lines of what we discussed on the BAC Board, Ericopoly check these facts out: http://www.businessinsider.com/scary-facts-about-finding-a-job-2011-9#if-you-lose-your-job-today-theres-a-70-chance-you-wont-find-a-job-in-the-next-month-1

http://blip.tv/wealthtrack-portable/robert-shiller-5501303 Parsad, I think you should maybe start a section called "Videos" or "Interviews" and we should all add some our favorite videos/investor interviews. It would be amazing to have such a repository of media contributed by members of this board. Without this board, I would have never found the Charlie Munger University Interview for example...

No Scorpion they are worth zero because they have not reached the stage of resource definition. 90% of the market are exploration companies with greenfield projects. Again, Natural Resource Holdings has done some good research here cataloguing the ones with actual defined deposits over 1mm ounces: http://www.nrh.co.il/i/pdf/NRH_Research_OneMillionOunceGoldDepositsMay2011.pdf

Biaggio Rick rule is talking about all the exploration co's out there which account for 90% of the market but in terms of market cap account for less than 10%. Read my post about the industry from a few weeks ago, in I categorize the industry into 3 groups of companies. Relating to PineTree it definitely seems cheap but I don't think the quality of companies he holds are the kind I like, I see PineTree as more of a leveraged option on the exploration side of the business, with good diversification. The way we see it is either you are investing in a proven deposit that has been defined based on diamond-drilling, or you are investing in an ore body that has already been intersected where you know the assay grades, length of intersection and locations on a map, but has yet to be computed into an initial resource estimate. Investing before is a crap shoot Roy Sebag does a good job of explaining this in his annual letter here: http://www.nrh.co.il/i/pdf/NRH_2010_Annual_Letter.pdf As does Bill Martin here: https://www.americancentury.com/pdf/Gold_Investing_Core_Explore_Approach_Retail.pdf