We have to ask ourselves what’s going on in the world today, and the answer is pretty simple. Central banks have pushed so much liquidity into the system that everything looks great since technology plus huge investments thanks to low borrowing costs has kept prices down.
Introduction
It will soon be nine years that we have been enjoying a rising economic tide. Economic policies around the world are still accommodative, and corporations really don’t have difficulties in finding financing.
However, if you have been through economic kindergarten, you know that the only thing sure in economics is cyclicality. Therefore, it’s important to see who will be swimming naked when the tide shifts, how to be protected from such a possibility, and perhaps even how to take advantage of it. More →
Introduction
In today’s article, I’ll discuss the financial environment we are living in.
It’s very important to see the fundamental trends and forces surrounding what looks like a stable and strong financial system. The fundamental forces are crucial because in the long term, those forces eventually prevail and have a huge impact on all financial assets. More →
Introduction
Hedging is a very important, but an often-omitted investing strategy.
The principle of hedging is to own something that will go the opposite direction of everything else in the case of a market crash, protecting your portfolio from potential losses. For example, if you own an S&P 500 portfolio, buying a put option on the S&P 500 gives you security in the event that the market falls as you won’t lose anything as the value of the put option should appreciate at the same rate the S&P 500 declines. More →
Introduction
Buffett and Munger praise themselves for never taking out loans for Berkshire and one of the most famous Buffett quotes is:
“If you’re smart you don’t need debt, if you are not smart, you better stay far from debt.”
However, this is another half-truth that he tells the world. More →
Introduction
Yesterday, we discussed how the economy is in the late part of the economic cycle and everything is leading toward a recession.
No one knows exactly when the next recession will start or what the trigger will be. So the only thing to do is to be prepared. More →
Introduction
Yesterday, we discussed the reasons it’s a good idea to have gold miners in your portfolio now. The goal of today’s article is to show you just how different gold miners are and how carefully you have to chose those to include in your portfolio.
Just as every mine is different, each miner is even more different. There are huge differences in potential future output, mining costs, debt structures, political risks, etc. All of these factors have to be assessed to provide you with the best hedging option for your portfolio according to your risk appetite and portfolio orientation.
In this article, I’ll discuss the top 10 holdings of the iShares MSCI Global Gold Miners ETF (NYSEARCA: RING) to give you insights into what to watch for and how that affects the risks and potential rewards for your portfolio. More →
Introduction
Lately I’ve been mentioning in a few articles how gold, especially gold miners, are a good hedge for a portfolio. My idea is that if you own gold miners with 5% of your portfolio, you are relatively well protected against whatever surprises we might see coming from the economy. More →
Introduction
We’ll continue with the analysis of Seth Klarman’s book Margin of Safety. Today we’ll discuss chapter 13, Portfolio Management and Trading. More →