GOLD 0.51% $1,391.7 gold futures

"I like to know more about the type of metrics you are looking...

  1. 7,423 Posts.
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    "I like to know more about the type of metrics you are looking at from stock sectors to the state of the economy going forward."

    When analysing a company I look a number of quantitative and qualitative factors. Low or no debt levels is always preferred. Dominance in a market with high barriers to entry is important. Managers with high levels of ownership is good.

    The trick then is to make a high confidence estimate of future earning on which to judge relative cheapness.

    With respect to the "state of the economy going forward", try and pick survivors - companies that with scalable operations that can absorb a drop of income in a down turn.

    "As a matter of interest, when did you start looking at investment opportunity along that cycle post GFC low?"

    I had been sitting cash coming into the GFC and watched on in genuine horror during September-October 2008. It was much worse than I had expected. Then I was offered a contract and went to work in Jakarta between November-February 2009 and did nothing.

    When I got back to Australia the state of the market was so bad I found myself reasoning that if things got any worse I was as likely to lose my cash in a bank as in the market, so I might as well be in the market. Also a good friend told me that the Fed was "printing" money, which I though technically impossible, but helpful if people thought they were.

    After I had gone in with both feet, the market proceeded to drop another 5%. Then March came and the rest is history.

    I did some weird stuff in the distressed debt market that I could write a book about in '09-'10 and even rode the gold rally for a while owning miners.

    I did lighten up for a while in 2010-11 as the distressed debt opportunities dried up, but when I figured out that the Fed had helped bail out DB in December 2011, it was time put the peddle to the metal again.

    What to do now? There is still plenty of value out there if you dig. Even the banks are worth a look. (I don't believe I wrote that.)

    My view on gold? I think that holders of gold and gold stocks will make money over the next couple of years. The reason I won't invest in them is that I have no idea what the upside is.

    All the best.
 
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