ebook essays pieces of the puzzle
Monday, January 30th, 2012
a gold bet

The puzzler is on a secret government mission in an undisclosed location, so the dispatches will be few and brief this week.

The first version of the chart above appeared in a posting from the fall of 2010, regarding a bet on the price of gold.  Here is a summary of the bet and my take at the time:

“In response to their respective appearances about gold on Nightline and the NBC Nightly News, Paul Brodsky and Barry Ritholtz made a bet about whether gold will be over or under $2,500 in two years (not whether it touches it before).  As you can see from the logarithmic chart above, to reach the gold star, the wonderful move in the metal would have to move at an even faster pace than it has during this great run.  Sure it could happen, but as a betting man, I’ll take the under.”

The metal is up 36% since the bet, a very nice move.  But it will have to go up 44% in less than eight months (and stay there) for Brodsky to win.

The lower panel shows the sum of the assets in the two largest gold ETFs, representing the amazing rise to dominance of that vehicle in the trading of this commodity.  (Chart:  Bloomberg terminal.)

the prudent fiduciary digest

The inaugural issue of The Prudent Fiduciary Digest is out.  It will appear every few weeks and provide interesting ideas and links on developments that will effect the investment choices of tomorrow.  (Yesterday and today already get enough attention.)  You may sign up to receive the complimentary newsletters via email.