Current asset allocation?

[ValueDan38]

Large positions in FFH  BRK  LUK.  Hard to resist near Book Value in this uncertain environment.  With many of you holding these, is this a case of "Great minds think alike" or "You pay a high price for a cheery consensus" ?

 

Small positions in GOOG  DELL  CNQ and others.

 

8% cash.

[biaggio]

Filling my garage up with Pork Bellies.

 

Don t laugh but I just filled my freezer with beef tenderloin the other day - (at $7 per lb I am ready for any beef supply problems). I am afraid though it won t last long however.

[biaggio]

Giofranchi: if you look in the prospectus of Xetra Gold, page 7 (link) you will read:

 

The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu with all other unsecured and unsubordinated obligations of the Issuer.

 

The proceeds fi'om the issue of the Notes will be used by the Issuer to acquire (a) physical Gold to be held in custody by the Depositary Agent and (b) Gold delivery claims, up to the Gold Delivery Claims Cap, against Umicore AG & Co. KG, Hanau (the "Debtor of the Gold Delivery Claims"), a subsidiary of Umicore s.a., Brussels, which operates several gold refineries worldwide and produces gold bars.

 

So you do not actually own physical gold, you just have an unsecured claim with an issuer who might have gold or might have claims to a gold refinery (we don't get to know anything about these claims). In other words: you are buying a bond, and you are paying monthly fees to own it.

 

It is ironic: the gold bugs want physical gold because the huge ETF's are supposedly unsecured and manipulated by the big banks. This led to scores of new issues catering to this niche market. Products like Sprott physical gold trust, issuing shares at a huge premium to net asset value. Or Xetra Gold, which is actually just a bond. These products lure retail investors by offering them the possibility to actually claim physical gold. Obviously at a cost and obviously nobody ever does this. Unless the world collapses and at that point the gold might not actually be there or other creditors have priority over you. It is just a nice marketing ploy. In their search for "extra-physical" gold the gold bugs end up buying shitty products that are specifically marketed to them. The big ETF's are actually the most safe (and the cheapest) way to own a stake in physical gold.

 

I am not sure I trust the large ETF's though I admit I have never really looked into them in detail. To me it seems a bit like a ponzi scheme.

 

I have thought of owning gold coins (buy 1 or 2 coins a year and just hold- but have never gotten around to it)-would imagine you can get ripped off here too as there is a premium over and above the actual cost of gold

[matjone]

I am with Charlie Munger on  gold.  There seems to be no way to value the stuff so there can't be any MOS to it.  The only reason to buy it seems to be if you think there's a good possibility of total chaos coming.  If that is the case I would think you'd want the actual bricks in a safe deposit box or buried in the backyard depending on how crazy you think it's gonna get. 

 

I can see the arguments for carrying a few bars to bribe people for when things get totally crazy, but when you start putting any substantial portion like 10% of your money in something that at best is going to match inflation in the long run you, then you are going to end up substantially poorer if you keep this allocation throughout your lifetime.  And if you plan to only keep this allocation only when there is a lot of panic and then get out of it when the reason for the panic is over,it seems like you are guaranteed to lose money.

 

If I really wanted a claim on some gold I think I'd rather do it through part ownership of a pawn shop.

[Viking]

Just moved to 100% cash. Been a solid year. I am happy to wait for some great bargains to show up (like they always do).

[ShahKhezri]

40% FFH, 12% MKL, 8% CHK (sold calls at 19, so thats going to be turned into cash), 7% Y, 6% VRSK, 5% FAAFX, 5% BAC & AIG Warrants, 10% L/LUK/OAK (combined), 1.5% TROX, 1% VRX, 1% AAP. 

 

Have sold SEB & IEP the past two days.  FFH, MKL and Y were purchased at significantly lower prices, they will not be sold. 

 

Looking at GLW, DLB, MIL (who I think has done an absolutely remarkable job following through on what they said they were going to do), GLRE, WTM, WRB. 

 

Short: CRM, SPG, PSA, FXI, FOSL, CNX, TIF, COH, CLH, DKS, POOL. 

 

I dont include physical gold as an allocation, but if I did, it would be over 10%.

[alwaysinvert]

~30% BRK

~65% different Swedish and Danish small and micro caps

~5% cash

 

Never quite got the conviction to buy Nintendo a couple of months ago and of course it has rallied like hell. My mistakes of omission are piling up in an unplesant way these last two years and on top of that I have made a few of comission too. Time to buckle down and start thinking harder.

[jeffmori7]

~100% equities...I still can't figure how to keep cash :)

 

BRK, AAPL, FTP, GOOG, BAC, BAM, for more than 2/3 of the portfolio.

Also some MTY, GE, WFC, HD, AIG, MKL, BLX.

[Liberty]

~100% equities...I still can't figure how to keep cash :)

 

We should form a support group for the cashless... 12 steps to build up a cash cushion and all that  ;)

[CONeal]

~100% equities...I still can't figure how to keep cash :)

 

We should form a support group for the cashless... 12 steps to build up a cash cushion and all that  ;)

 

Wish someone would.  It's my biggest weakness.

[jeffmori7]

~100% equities...I still can't figure how to keep cash :)

 

We should form a support group for the cashless... 12 steps to build up a cash cushion and all that  ;)

 

Wish someone would.  It's my biggest weakness.

 

Haha, I agree!  ;)  Is there any good book on this matter?

[Liberty]

Haha, I agree!  ;)  Is there any good book on this matter?

 

 

Ha! I doubt I need a book. What needs to be done is very simple and could fit in one sentence. It's the execution I have trouble with.  ;)

[thepupil]

10.5% 401K, 100% Company Stock (Global Megabank)

 

6.5%  Everyday "Operating" Cash

 

83%  Investment Portfolio

        23% Berkshire

        20% Loews

        11% Granite Real Estate Co.

        11% Cash

          8%  Brookfield Asset Management

          7%  Nabors

          7%  Lockheed Martin

          7%  BP

          2%  USO Puts

          2%  Safeway Leaps

 

[CONeal]

AIG/warrants.    31.52%

BAC/warrants.    43.10%

NAVB                  18.41%

Still building.          6.92%

Cash.                    0.03%

[stahleyp]

hmmmm....maybe 10% cash for me is too much.

 

"Fund managers: U.S. stock rally is over"

 

http://buzz.money.cnn.com/2012/09/19/fund-managers-stock-rally/?iid=HP_LN

[giofranchi]

Giofranchi: if you look in the prospectus of Xetra Gold, page 7 (link) you will read:

 

The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu with all other unsecured and unsubordinated obligations of the Issuer.

 

The proceeds fi'om the issue of the Notes will be used by the Issuer to acquire (a) physical Gold to be held in custody by the Depositary Agent and (b) Gold delivery claims, up to the Gold Delivery Claims Cap, against Umicore AG & Co. KG, Hanau (the "Debtor of the Gold Delivery Claims"), a subsidiary of Umicore s.a., Brussels, which operates several gold refineries worldwide and produces gold bars.

 

So you do not actually own physical gold, you just have an unsecured claim with an issuer who might have gold or might have claims to a gold refinery (we don't get to know anything about these claims). In other words: you are buying a bond, and you are paying monthly fees to own it.

 

It is ironic: the gold bugs want physical gold because the huge ETF's are supposedly unsecured and manipulated by the big banks. This led to scores of new issues catering to this niche market. Products like Sprott physical gold trust, issuing shares at a huge premium to net asset value. Or Xetra Gold, which is actually just a bond. These products lure retail investors by offering them the possibility to actually claim physical gold. Obviously at a cost and obviously nobody ever does this. Unless the world collapses and at that point the gold might not actually be there or other creditors have priority over you. It is just a nice marketing ploy. In their search for "extra-physical" gold the gold bugs end up buying shitty products that are specifically marketed to them. The big ETF's are actually the most safe (and the cheapest) way to own a stake in physical gold.

 

Well writser,

on page 8 of the Prospectus you read "Use of Issuance Proceeds", and it is clear enough to me. You doubt that the gold they claim to be under the vault is not there? You doubt that the gold which Umicore claims to deliver is not there? If so, why?

 

Anyway, I am absolutely not a gold bug! But I am neither an “Euro bug”, and, though I like USD better than Euro, Mr. Bernanke is really trying to do all he can to depreciate America’s currency!

 

giofranchi

[writser]

Not saying you are a gold bug. I was just replying to your statement:

 

I look at Xetra-Gold as the easiest way to own physical gold.

 

I think this is incorrect: you don't own physical gold, you own a claim to a holding company that holds gold and claims to a refining company. If the worst happens you have to pray that both companies stay solvent. You rely on the solvency of your counterparty, as demonstrated by press releases like this: link. The biggest gold ETF in the world is a trust fund, a form of investment in which you have no credit risk. The ironic thing is that the conspirary gold bugs don't believe this and end up buying inferior products with larger expenses, often at a premium, that are specifically marketed at their ignorance. Like the Sprott Physical Gold Trust: http://sprottphysicalbullion.com/sprott-physical-gold-trust/ . The world "physical" is mentioned 6 times on their frontpage. What they don't mention is that you buy it at a 3 percent premium.

 

Now I am not saying Xetra-Gold is a bad product, you might or might not have made an informed decision. But if your prime reason for buying this product is that you want "physical exposure" then you bought the wrong product. You don't OWN gold and the redemption feature is a marketing ploy.

[giofranchi]

Not saying you are a gold bug. I was just replying to your statement:

 

I look at Xetra-Gold as the easiest way to own physical gold.

 

I think this is incorrect: you don't own physical gold, you own a claim to a holding company that holds gold and claims to a refining company. If the worst happens you have to pray that both companies stay solvent. You rely on the solvency of your counterparty, as demonstrated by press releases like this: link. The biggest gold ETF in the world is a trust fund, a form of investment in which you have no credit risk.

 

writser, you are right. I really meant: "to own something (a note) which is backed by physical gold". Think of a currency in the gold standard, instead of Euro or USD today. Obviously, I don’t like what the gold standard caused during the 1930s, and I don’t see the gold standard coming back again… but it is just a fact of life, that any currency backed by gold was much more difficult to depreciate than a currency which is backed by nothing.

Could you please elaborate on why I might be spared from praying, if the worst happens, investing in a trust fund (I guess you are referring to GLD)?

Thank you,

 

giofranchi

[Olmsted]

50% FB

50% CRM

;)

 

Seriously though:

28% AIG/warrants

15% GKK

12% BAC warrants

10% NCT

 

20% smaller positions: CVLY, NSM, C, HIG, FIG, SNFCA, LINTA, LVNTA, ADFT, TMA.GB (scaling out of/into/price got away from me)

 

5% DBLTX

9.98% cash

.02% Pork Bellies (the bacon curing in my garage)

 

I'd probably have less cash and bonds, but I need to stash some away for my pending unemployment.

[Ross812]

Bidvest - 23%

CHKDG.pk - 11%

BAC (common, warrant, options) - 18%

INTC - 5%

JEF - 3%

LUK - 5%

ALS.TO - 8%

POW.TO - 4%

PBG.TO - 3%

MCD - 2%

UPS - 2%

RLI - 2%

 

Cash committed to Secured Puts - 7% (no margin)

Cash - 8% 

 

I'm building INTC right now selling cash secured puts. I will be ~10% in Intel by Monday.

[bargainman]

Haha, I agree!  ;)  Is there any good book on this matter?

 

 

Ha! I doubt I need a book. What needs to be done is very simple and could fit in one sentence. It's the execution I have trouble with.  ;)

 

Hmm how about a support group for those with too much cash?  I'm sitting at about 50% cash :-P 

[Liberty]

Haha, I agree!  ;)  Is there any good book on this matter?

 

 

Ha! I doubt I need a book. What needs to be done is very simple and could fit in one sentence. It's the execution I have trouble with.  ;)

 

Hmm how about a support group for those with too much cash?  I'm sitting at about 50% cash :-P

 

Send it my way and I'll take care of that for you  ;)

[bargainman]

 

Hmm how about a support group for those with too much cash?  I'm sitting at about 50% cash :-P

 

Send it my way and I'll take care of that for you  ;)

 

What was that quote about being worried about the return *of* your capital vs *on*?  ;-)

[Liberty]

 

Hmm how about a support group for those with too much cash?  I'm sitting at about 50% cash :-P

 

Send it my way and I'll take care of that for you  ;)

 

What was that quote about being worried about the return *of* your capital vs *on*?  ;-)

 

:D

 

I don't know, it seems like a good strategy! Efficient market theory says that higher risk = higher reward, so sending your money to a stranger on the internet should be extremely rewarding. In fact, you all should do exactly that! ;) ;) ;) ;)