G-khan
04-14-2003, 07:27 AM
Posted on Mon, Apr. 14, 2003
O'Higgins tip: Buy gold-mining stocks
By Harriet Johnson Brackey
KNIGHT RIDDER NEWSPAPERS
Michael O'Higgins manages money for the wealthy.
But there are ways to mimic his moves, if you're inclined to follow his view that stocks are overvalued and that the economy is entering a depression.
A simple way to mimic his approach would be to sell short the major stock market indexes and buy gold-mining stocks.
For some of his accounts, he's using the Rydex inverse mutual funds to bet against the market. For example, the Rydex Tempest 500 fund (RYTPX) has as its goal to produce twice the inverse of the return on the Standard & Poor's 500. The Rydex Venture fund (RYVNX) aims to do the same thing with the Nasdaq 100. Rydex's minimum initial investment is $25,000.
The one stock he holds at the moment is Newmont Mining. Although he sees it as cheap, relative to the price of gold, Newmont is the most expensive of the commonly traded gold stocks with a price-to-earnings ratio of 103.
As an alternative, O'Higgins says the smaller investor can buy the Tocqueville Gold fund (TGLDX). The minimum initial investment is $1,000.
Or, in perhaps the easiest way of all to preserve cash in the coming market decline and depression, "You can just buy Treasury bills," he said. "If I'm correct and the market goes down a lot, then hanging on to your money will increase your purchasing power."
As he points out, if you'd hung on to your money during the 1929 to 1932 market crash, you'd have ended up with almost 10 times more cash than someone who invested in the broad market.
http://www.bayarea.com/mld/cctimes/business/5629541.htm
O'Higgins tip: Buy gold-mining stocks
By Harriet Johnson Brackey
KNIGHT RIDDER NEWSPAPERS
Michael O'Higgins manages money for the wealthy.
But there are ways to mimic his moves, if you're inclined to follow his view that stocks are overvalued and that the economy is entering a depression.
A simple way to mimic his approach would be to sell short the major stock market indexes and buy gold-mining stocks.
For some of his accounts, he's using the Rydex inverse mutual funds to bet against the market. For example, the Rydex Tempest 500 fund (RYTPX) has as its goal to produce twice the inverse of the return on the Standard & Poor's 500. The Rydex Venture fund (RYVNX) aims to do the same thing with the Nasdaq 100. Rydex's minimum initial investment is $25,000.
The one stock he holds at the moment is Newmont Mining. Although he sees it as cheap, relative to the price of gold, Newmont is the most expensive of the commonly traded gold stocks with a price-to-earnings ratio of 103.
As an alternative, O'Higgins says the smaller investor can buy the Tocqueville Gold fund (TGLDX). The minimum initial investment is $1,000.
Or, in perhaps the easiest way of all to preserve cash in the coming market decline and depression, "You can just buy Treasury bills," he said. "If I'm correct and the market goes down a lot, then hanging on to your money will increase your purchasing power."
As he points out, if you'd hung on to your money during the 1929 to 1932 market crash, you'd have ended up with almost 10 times more cash than someone who invested in the broad market.
http://www.bayarea.com/mld/cctimes/business/5629541.htm