30 January 2013

10 Common Investing Mistakes

10 Mistakes that turn Investors into their own worst Enemies (Business Insider)

Swiss Banks client Gold to allocated accounts

The banks are reported (Financial Times) to suggest to clients to move their physical gold holdings to allocated accounts. These gold holdings then are no longer part of the bank's balance sheet and do not require costly equity capital to back it up. To a certain extent this increases the safety of the client's gold holdings as any bankruptcy of the bank would no longer have any detrimental impact on the client's claim to ownership of the gold (assuming the physical gold is segregated properly - which is not always the case as several recent cases in the UK demonstrated where client holdings of various assets were not properly segregated). Investors should be aware, however, that banks (and other custodian institutions) might at any moment be prevented from giving access to gold that is in their custody if the governments/regulators order them to do so.

24 January 2013

Honest Rating Agency punished by regulators

It is possible that rating agency Egan-Jones has not followed regulatory guidelines (themselves of questionable value) but to be banned from a large sector of the market for what is the equivalent of a parking offence seems to go to far - even if one never can underestimate the deviousness of regulators and the financial establishment that seems to dictate its actions. So readers are warned if they think that bond ratings  are anything they should pay attention to.

23 January 2013

Who will drive Lamborghinis?

Interesting paper extolling the advantages of Gold (or hard currency) in times of (Hyper)Inflation

10 January 2013

Where should you hold your Gold?

Still convinced that Gold is always a safe haven? then look at this

Turkish banks are pushing their customers to deposit physical gold in 'gold deposit accounts'. While that may seem to be a convenient - and above all secure - option it negates one of the main reasons why people want (and should) hold a proportion of their wealth in the 'barbarous relic'. This is the fact that gold is not anyone's liability (like all bank deposits, bonds etc) and is not just a blip in some distant computer (as most holdings of shares and bonds are after paper certificates have fallen victim to 'rationalisation' and 'modernisation'). Physical gold - as long as it is held in secret and away from the prying eyes of governments - is the only asset that can survive in stormy times and depositing it in any institution or vault - even if anonymous - means that its main advantage in uncertain times is lost.
12 Jun 2012

3 January 2013

Heads I win, Tails you lose

A potential source of fraud that most investors do not know much about concerns the allocation of trades. It is critical that investment advisors or fund managers are not able to allocate winning trades to favoured accounts or funds - or even to their own investment accounts. A recent example is found here (Los Angeles Times)