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Moving in the Right Direction?

    April 13, 2009

While in London last week, I appeared on CNBC Europe to discuss commodities and the global market outlook.

During the interview, I was asked why markets are moving upward despite such low expectations for first-quarter 2009 earnings.

“What we’re seeing is massive reflation around the world and in mid-March, what we saw out of the U.S. was this $1.2 trillion push, which is a massive monetary stimulus. That was the turning point.  Two other factors came out: a change in the uptick rule … coupled with ‘Let’s reassess mark-to-market [accounting]’. So having all this cash going into the system, I believe that we’re in a sustainable run here.  There will be some whipsaws back and forth, but the wind is now at our sail.”

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Mark-to-Market Makeover: Why It’s Important

    April 03, 2009

TV Frank Holmes 040309One of the week’s big events was the Financial Accounting Standards Board’s changes that add necessary flexibility to the FAS 157 mark-to-market rules.

This week I spoke on Bloomberg TV on why FAS 157 needed a tune-up.

“The mark-to-market [rule] basically took all long-term investments and distilled them down to where they’re only good for three months and whatever takes place in three months is the life of that investment, and that created a huge spike in volatility and that prevented banks from [being] able to go out and lend money … What [banks have] been doing is basically getting out of any type of lending.”

*Watch the Full Interview

*By clicking the link you will be redirected to the Bloomberg website. U.S. Global Investors does not endorse any information supplied by this website and is not responsible for any of its content.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Gold funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The price of gold is subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in gold or gold stocks. R-squared is a statistical measure that represents the percentage of a fund or security’s movements that can be explained by movements in a benchmark index. For fixed-income securities, the benchmark is the T-bill. For equities, the benchmark is the S&P 500. The following securities mentioned in the interview were held by one or more of U.S. Global Investors family of funds as of 12/31/08: AngloGold Ashanti, San Juan Basin Royalty Trust, Tesoro, Valero.

 

The Largest Commodity Hedge Fund in the World

    March 11, 2009

Frank TV 031109I had the privilege of speaking at the Reuters Global Mining and Steel summit yesterday in New York. After the presentation, I sat down for a short discussion on gold and commodities with reporter Jen Rogers. We also discussed China’s commodity shopping spree which I highlighted a couple of week’s ago [China’s Shopping Spree ->].

“I love Mark Faber’s line that the largest [unleveraged] commodity hedge fund in the world is China, and there’s an expression, ‘whatever China needs, get long and whatever China has extra of, get out of the way!’ So you’re seeing that the Chinese right now with their huge US dollar surplus and the dollar being such a strong currency against the euro and the pound, etc. They have been buying outright commodity companies. Buying oil, buying chemicals. I think they are going to continue because they have as a first move a $600 billion infrastructure spending project. Now we’re going to spend under $200 billion in the infrastructure budget and the big difference, not only is the dollar amount greater in China, but they pay wages of $3 a day and we pay $30 an hour. So that means that demand for commodities is going to be much stronger, more sustainable in China and that will be the backdrop…”

*Watch the Video

*You are leaving U.S. Global Investors, Inc's site. You are now being redirected to the Reuters Website. U.S. Global Investors does not endorse any information supplied by this website and is not responsible for any of its content.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Gold funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The price of gold is subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in gold or gold stocks. The Baltic Dry Freight Index is an economic indicator that portrays an assessed price of moving major raw materials by sea as compiled by the London-based Baltic Exchange. The following securities mentioned in the interview were held by one or more of U.S. Global Investors family of funds as of 12/31/08: Freeport-MacMoRan. 09-191

 

Uncertainty Fueling Gold’s Rally

    February 13, 2009

Brian Hicks TV 021309Global Resources Fund (PSPFX) co-manager Brian Hicks appeared on Bloomberg’s “Starting Bell” this morning to discuss the current rally for gold.

During the interview, Brian explained that the increase in demand for physical gold is a reflection of how concerned investors are becoming about the ongoing volatility in the equity market.

“We think that gold can push higher from here because we really aren’t seeing a speculative element at this point.  It’s really investors looking to hedge themselves. It’s not a speculation move just yet.  We’re still below prior highs and we feel like gold is still undervalued… We feel like we still haven’t seen the big moves in gold as of yet.”

*View a Replay of the Interview Here

*By clicking the link you will be redirected to the Bloomberg website. U.S. Global Investors does not endorse any information supplied by this website and is not responsible for any of its content.09-133

Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

Holdings in the Global Resources Fund as a percentage of net assets as of 12/31/08: Goldcorp (3.17%), SPDR Gold Trust (GLD) (3.91%), Newmont (0.00%), Barrick (0.00%), Kinross (0.00%).

 

A Forward-Looking Market Catalyst

    February 05, 2009

John Derrick TV 020509John Derrick recently appeared on CNBC’s “Closing Bell” to discuss current market trends.

During the interview, host Maria Bartiromo asked what catalyst investors can look for to move the market given the low expectations for earnings from the fourth quarter.

“Well I think what I’m looking at is going to be the credit conditions and improving credit conditions of the market. We’re already starting to see some improvement in that. Also, I think we’ve already gotten a couple of good indicators, the PMI numbers out of both the U.S. and China have rebounded here in December and in January and I think those are the kind of indicators you want to look at as early signs or leading indicators that things are starting to improve. So I think we’ve gotten some very early signs there but definitely not out of the woods yet.”

*View the Replay

*By clicking the link you will be redirected to the CNBC website. U.S. Global Investors does not endorse any information supplied by this website and is not responsible for any of its content.

The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

None of U.S. Global Investors family of funds held any of the securities mentioned in this interview as of 12/31/08. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

 

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