Another View on Gold

I described in an earlier post how Marc Faber argues for precious metals in an era of shaky currencies.

In contrast, the value investor Vitaliy Katsnelson expressed skepticism about gold in a post on his site, the Contrarian Edge. One of his key concerns is that:

For investors (not speculators) it is very hard to own gold, because you cannot attach a logical value to it. Unlike stocks or bonds, gold has no cash flow and has a negative cost of carry – it costs you money to hold it. It is only worth what people perceive it to be worth right now.

Since Vitaliy wrote that, in 2009, gold has more than doubled in price. That doesn’t mean he was wrong: maybe there has just been a bubble in gold. But what would it look like if the bubble popped?

Advertisements
This entry was posted in Economics, Investments and tagged , , , . Bookmark the permalink.

One Response to Another View on Gold

  1. Pingback: Gloom-Boom-Doom | The Well-Tempered Spreadsheet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s