I posted awhile back on the attractiveness of gold stocks using a very simple indicator. The Hussman model looks like it is flashing green as well (more here):
Not surprisingly, the combination of all of these is rare but extremely powerful. In the rare instances when 1) The rate of inflation has been higher than 6 months earlier, 2) Treasury bond yields have been lower than 6 months earlier, 3) the NAPM Purchasing Managers Index has been below 50, and 4) the Gold/XAU ratio has been above 4.0, the XAU has soared at an astounding rate of 123.63% annualized. In contrast, when none of these have been true, the XAU has plunged at -53.21% annualized. That’s a gaping difference.
GDX is the gold miner ETF.
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I’ve been cleaning out some old folders, and came across a great paper by Acadian Asset Management in 2005 titled, “Why Do We Do What We Do?“. A couple other good papers of theirs:
“The Final Frontier: Investing in Frontier Emerging Equity Markets”
“Is Dividend Yield Dead?”
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Want to grab lunch or buy me a beer? I added a feature on the sidebar that updates any upcoming work trips out of town. If you’re in SoCal, I’ve always wanted to goto Urasawa. . .
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Looking to hire? A good buddy of mine with portfolio management experience and a CFA is looking at jobs in SoCal. Contact me with any opportunities. . . .mf@cambriainvestments.com
