As 2014 draws to a close, providing hard asset investors with yet another desultory and depressing year of investment performance, we are hard-pressed to make a bullish case in the near term for nearly any commodity. Longer term, without a doubt, cash will still be trash, however for now the Central Banks have the upper hand and are firmly in control of the steering wheel guiding the markets. Gold remains in a trading range between 1240 and 1120, and does not appear to have the momentum or determination to break out meaningfully. Risks most likely remain to the downside. Gold stocks started the year on a bullish tone, only to once again savagely reverse course and dive downwards. Agricultural prices collapsed across the board, shadowed by weaker copper, silver, cotton and sugar. And then there’s oil.
Gold has finally suffered a major correction, which we have been waiting on for far too long. Technicians see this as a broken down market, meaning it is not likely to trade back up through its prior peak in 2011 any time soon. Prior support at about the $1530 level has now become upside resistance, and gold’s long term uptrend is not likely to resume until gold punches back through and closes convincingly above that level. There will most likely be a lot of backing and filling around current levels for quite some time. Longer term, we remain quite bullish on the upside prospects for this “barbarous relic” and this is our reasoning.
We thought it would be fun to put together a virtual round table discussion featuring three hypothetical investors spanning the globe-- one Asian based (Asia), one European based (Euro), and one US based (USA). Each jurisdiction has its own particular set of local issues, and we thought it would be fun to try to compare and contrast how a hypothetical sophisticated institutional investor from each of these jurisdictions might look at the world, in terms of both similarities and differences. Here is our attempt to do so, we hope you enjoy!!
The presses are rolling, money creation is in full swing, and all that lovely paper is chasing hard goods six ways to Sunday. In short, our primary thesis here at Tano, is being rung from every bell, and shouted from every rooftop. “The dollar is sinking, the dollar is sinking......”
Those of you who actually read our email updates may remember we penned a fairly bullish piece back in February. We reference our (in hindsight) fortunate call to go long--not to thump our chest proudly, for telling fortunes and forecasting markets is a slippery business at best—but to inform you that we have of late begun to develop yet another conviction that leans very much in the opposite direction.
As 2008 wound to a close, we heaved a collective sigh of relief here at Tano Capital. While we are not certain at all about what 2009 will bring, the one certainty we do believe is that it cannot be any worse than 2008. Sadly, we feel victorious over sweating out a positive 15.59% gross and 6.21% net return on the Tano Global Hard Assets fund for the year ending December 31, 2008.
Mark Twain apparently once said something like, “History doesn’t always repeat itself, but sometimes it does rhyme”. Global stock markets have had another absolutely horrendous month, adding significant more downside to their prior “waterfall” decline as the technicians so aptly are wont to frame it. We have been thinking much of markets and recent global developments, and in the process surveying the opinions of those more capable than us at discerning future potentialities from the entrails of past movements. At first glance, it certainly would be hard to argue that we are in the throes of another market crash the likes of which we have not seen since 1929.