Occasionally I think it's a good idea for a columnist to look
back at what they've written as well as putting their reputation on
the line by making new observations. This may just be a case of
cabin fever as I look out my window at a new accumulation of snow
here in the Big Apple, but this seems like a good time for
I last wrote about my lack of gold fever in a column on Oct. 28,
2010. As is usually the case when taking umbrage with gold bugs,
that column aroused some vehement comment from readers. The one
that sticks in my mind the most was the reader who thought me
foolish to stick to the equity market while they were going to get
rich with gold.
Using a couple of ETFs as surrogate-the SPDR Gold Shares
(NYSEArca:GLD) for gold and the iShares S&P 500 ETF
(NYSEArca:IVV) for the equity markets-let's compare. The closing
price for GLD on Oct. 28 was $131.24. It closed on Jan. 27, 2011 at
$127.93 and even my poor mathematical skills can see that is a
loss. IVV closed on Oct. 28 at $118.86 and on Jan. 27 at $130.49; a
gain of 9.7 percent. It's a very limited time frame I know, but I
take wins where I can.
I'm currently rereading a novel I hadn't touched since my
college days back in the '60s:Ayn Rand's "Atlas Shrugged." Ms.
Rand, I fear, didn't quite foresee the future exactly right; but
then few of us do. The United States hasn't fallen into the vice
grip of socialism or worse, though her warnings of things being too
big to fail do have a contemporary ring. While I can chide her for
her prophecy deficiencies, I now have a much greater appreciation
of her skills as a novelist. Which all brings me to another issue
I've written about recently-muni bonds.
Published reports suggest Congress may attempt to find a way for
states to declare bankruptcy. And states-even the little ones-are
pretty big. My ETF proxy for this will be the iShares New York
AMT-Free Municipal Bond Fund (NYSEArca:NYF), since my positions are
exclusively in New York State bonds. On Oct. 28, NYF closed at
$107.05 and, almost three months later, on Jan. 27 of this year, at
I would care more if I traded bonds, but I hold them for the
income, and in the last three months, not a bond payment has been
missed. There are concerns, especially if in Ms. Rand's novel,
Congress gets to meddling, but for now, the buy-low imperative
might be more relevant.
In my looking-ahead category, is now the time for a mega-yacht
ETF? The New York Times reported that recently a 257-foot yacht
with a helicopter pad, two Jacuzzis, an on-board movie theater and
a lot of other really cool stuff sold for what they thought was a
bargain price of only $100 million. If someone wanted to get in at
the bottom of the yacht market, now might be the time. I'll even
suggest a ticker symbol-"RRBB"-for
really, really big boat
. And trust me, for cash, someone will create a yacht index for
Is GLD low and a buy? Is NYF a buy at these levels? Is it a sign
of the apocalypse that big boats are selling at so-called bargain
prices? I don't think so. It seems more like usual market activity
to me. A Cop's first responsibility is to observe what's going on
in his beat. And, for now, everything looks pretty normal.
Oscar Silver, aka "The Capitalist Cop," is a Brooklyn, N.Y.
native. He was a financial advisor for more than 20 years.
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