Daily Archives: June 24, 2013

James Mackintosh

Okay, if you have a spare second after liquidating your portfolio, here’s a quick dive into ancient history (pre-taper, or the week up to last Wednesday).

It turns out all that selling in the build-up to last week’s Federal Reserve meeting was flooding not just back into the US, but mostly back into US equities. Here’s a lovely chart of mutual fund flows courtesy of Orrin Sharp-Pierson at BNP Paribas: Read more

James Mackintosh

Amid the post-Bernanke rubble, there are probably a few people sparing time from hedging their interest rate risk to look for bargains.

Look no further: the gold miners are cheap! I mean, really cheap. Gold has tumbled a long way from its peak, but miners have fallen much further – and are now trading at an extraordinarily low multiple of the gold price. This chart shows the ratio of the Market Vectors Junior Gold Miners index of small miners, and of the Arca Gold Bugs index of larger miners, to the gold price.

Miners and gold

Larger miners are now the cheapest relative to gold they’ve been since the aftermath of the dotcom bubble, when they proved a serious bargain. The index of junior miners only started in 2004, but their prices are testing the low relative to gold reached after Lehman Brothers collapsed – after which they offered some of the best returns of any stocks anywhere. Read more