Macro Tsimmis

intelligently hedged investment

Archive for March, 2012

Is Gold Overpriced?: A Macro View

Posted by intelledgement on Fri, 30 Mar 12

…[T]he price of gold is up sharply of late: roughly 5% so far this year, 10% in 2011, 30% in 2010, and 24% in 2009. Gold has clearly been appreciating in value faster than the dollar has been declining for the past few years. So, even taking into account the risks of a default in Europe, a war with Iran, a recession in the U.S., a growth slowdown or worse in China and India and so on…is gold overvalued here?

Published earlier today by The Motley Fool, this article graphs the price of gold versus the decline in the value of the dollar to determine how much of the former is explained by the latter. (Spoiler: probably less than you think.)

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Hedge Fund ETFs—Hedge Funds for the Rest of Us?

Posted by intelledgement on Fri, 09 Mar 12

In the last couple of years…the same folks who brought us the exchange-traded fund revolution have attempted to cash in on hedge fund mania by offering ETFs that aim to generate hedge-fund-like returns—or, at least, to follow one or more of the strategies that have generated such returns. So far, the reception for these “hedge funds for the rest of us” has been decidedly underwhelming.… But let’s take a closer look to see if there are any diamonds in the rough among them.

Historically, the average hedge fund beats the market handily. This article published by The Motley Fool earlier today evaluates the performance of hedge fund ETFs in comparison to the S&P 500 to see how well the success of their progenitors is carrying over to the new generation…or not.

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