Thursday, January 31, 2013

5 Typical Mistakes with Gold Investments

Axel Merk has published a new whitepaper entitled "Fools Gold: Five
Common Mistakes with Gold Investment" that deals with poor Gold investments decision or understanding.

5 investment advices are summarized below:
  1. Gold Stocks Ain’t Gold - Gold mining stocks, on aggregate, have significantly underperformed the price of gold.
  2.  There is Only One Real Thing - Other precious metals, including silver, may not perform as well as gold in times of economic duress.
  3. Beware of Premium Over Spot - Make a note of the spot price of gold per Troy ounce, so that you can calculate the premium the dealer is asking for (be sure to include any delivery, administrative, insurance, or related fees) before making a final decision
  4. Don’t Overlook the Expenses - Before you buy physical gold, you have to carefully consider the related storage and insurance costs.
  5. Make Sure Gold is Really There -  If you buy a Gold ETF make sure to read the prospetus, and be wary of large amount of "unallocated gold", and the ability to lease gold.

The full report is available for download on Merk Funds website.

Monday, January 21, 2013

Long Term Charts Thai Stock Market - January 2013 Update

This is a repost of the article found on CNX Translation forums.

6 months have gone since our last update, and its time again to update the long term charts of the Thai stock market.

The first chart is the SET index between 1975 and January 2013. Following other indices around the world, and despite my overvaluation view 6 months ago, the Thai stock market has continued its (unstoppable) rise in the last 6 months, and now stands at about 1440, a rise of about 40% since I started to become cautious.


The PER is now around 18, mainly due to the stock market improvement. At 15, I started to be bearish, so at 18 it's extremely unusual for the Thai stock market. So either earnings have to go up substantially, either the stock market has to plunge, or a combination of the two.

The price to book value slowly crept up to 2.4 which also starts to make Thai stocks overvalued, especially compared to what you get in other markets around the world. (European stocks have a P/B ratio around 1 now)

To conclude, I believe the Thai stock market is relatively overvalued both historically, and compared to other stocks markets around the world. The dividend yield is now around 3% which is is that more than can get in a fixed deposit (Bangkok Bank now offers up to 2.65 % p.a for a 36 months fixed deposit), so why take the risk? There is also a lot of optimism around the world, which IMHO is not warranted, so I would not be surprised to see a massive correction in the Thai stock market within the next year.

Wednesday, January 2, 2013

Marc Faber January 2013 Market Commentary

Marc Faber has just released his January 2013 market commentary entitled "A Great Attitude Creates a Happy Future" on

This month, Marc Faber discusses about what may constitutes the best investment: Education of one's children in the greater sense of the word including morality, generosity,. From one investor perspective, the best returns are achieved with "boring" stocks with lower volatility., and the very best way to even lower volatility further is to hold a diversified portfolio of different assets: properties, equities, bonds, precious metals, and cash.

The monthly market commentary including one attachment:

  • “It’s time to ‘Bet the Farm’ on farming and farmland” by Coast Sullenger. founder of GAIA Capital Advisors.
I could not find the report online, but GAIA capital advisors provides GAIA farming index and GAIA/ EFG Tracker Certificate.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year