Guest Broxburnboy Posted November 5, 2009 Share Posted November 5, 2009 With the current record high price in gold and the erosion of the USD against a basket of other currencies being now an ongoing trend, perhaps its time for a discussion on the effects of volatility of currencies to the value investor. Are "macro" trends now negating the accuracy of "bottom up" analysis? Here's a good summary of the currency issue: http://www.321gold.com/editorials/merk/merk110509.html Link to comment Share on other sites More sharing options...
Viking Posted November 5, 2009 Share Posted November 5, 2009 I think where you live (home currency) definitely has to be a factor in ones decision making process. I live in Canada and am of the opinion that the CAN$ should do well on a relative basis. As such I am not unhappy to hold CAN$ (currently 85%) and wait for opportunities. If I was a US investor I am not so sure I would be as happy holding a large % of my portfolio in US$ and waiting for opportunities as it appears to me that the unofficial US government policy is to devalue the currency. The 15% I have recently purchased BRK-B, KFT, JNJ & WMT. If the CAN$ continues to strengthen (i.e. to parity with the US$ or better) I will continue to look to the US for well managed, large companies selling a reasonable valuations... Link to comment Share on other sites More sharing options...
arbitragr Posted November 5, 2009 Share Posted November 5, 2009 There are a lot of global/macro hedge funds out there which are probably driving these trends. Link to comment Share on other sites More sharing options...
oldye Posted November 7, 2009 Share Posted November 7, 2009 The world mines about 3000 tons of gold a year and uses up about 300 tons while the rest is hoarded. At this rate the world has more than 300 years worth of gold in storage and that number grows by 9 years every year...Gold makes the housing bubble look like the internet bubble..its a zero coupon bond with no par value. Speculative bubbles last longer than anyone expects...but theres no reason it wont sell for less than the cost of production sometime in the future. Link to comment Share on other sites More sharing options...
prevalou Posted November 9, 2009 Share Posted November 9, 2009 and jewelry? Link to comment Share on other sites More sharing options...
prevalou Posted November 9, 2009 Share Posted November 9, 2009 I will not sell my wedding ring because gold is at a top! Link to comment Share on other sites More sharing options...
Mungerville Posted November 10, 2009 Share Posted November 10, 2009 Gold has done way better than $US cash, $ cnd cash, killed the S&P 500, and not far off Berkshire's performance in the last decade. US policy is to devalue the currency. Everybody knows it. Why do you think Buffet sold the puts on the indices? Link to comment Share on other sites More sharing options...
shalab Posted November 10, 2009 Share Posted November 10, 2009 One can buy chinese currency as it will eventually increase in value. Or one can buy commodities futures such as coffee which is consumed irrespective of the financial condition. One can also hold berkshire stock. Link to comment Share on other sites More sharing options...
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