Stocks Down, Time to switch to Gold Investment -For six months the price of gold falls, but Cyprus and the comeback of the euro crisis have made the demand last rise again. The Boston Star investor Seth Klarman continues to focus on the precious metal - and explain the reasons.
The investment bankers were united. "The gold rush is over," wrote Societe Generale 28 February. "Gold: The Beginning of the End of an Era" Credit Suisse titled a report of 1 February. Goldman Sachs Chart show also stated that the boom years of the precious metal was over.
The market seems rather to analysts: Since an ounce in 2011 reached a record of $ 1,920, the price has dropped by nearly 20 percent, to less than $ 1,600. Since October 2012, when the nervousness declined markedly in the euro zone, it was continuous for the gold price down.
For long-term investors, however, the price decline mainly offers the chance to buy some coins or bars, if they have not been gilded five to ten percent of their possessions. Because gold chart is showing no bet on rising prices, but insurance for the property. Such protection is especially valuable now, in the worst financial and economic crisis since the 30s.
Therefore, it is not surprising that one of the most successful investors of all time has recently been investing in gold mining companies: Seth Klarman (55), founder of the Baupost Group in Boston, which has $ 17.5 billion assets created for its customers in the 30 years of its existence . This makes it one of the most successful hedge fund managers of all time (see also the portrait of Seth Klarman in the current manager magazin).
"The real danger is the end of 'free lunch'"
In the last quarter of 2012, Baupost has increased its share of the gold mining company NovaGold. With the small gold mining companies Carpathian Gold and Guyana Goldfields Baupost are around one fifth of the equity. These companies have large undeveloped gold deposits, whose development is expensive and fraught with risks. Therefore Klarman an ounce located in the floor here buys far below the current market value.