Posts in Simon Black
The Price Of Gold Just Hit A Record High

.Notes From The Field By Simon Black

September 12, 2019  San Juan, Puerto Rico

The Price Of Gold Just Hit A Record High

A few hours ago, the European Central Bank announced a bonanza stimulus package: interest rate cuts, money printing, quantitative easing, the whole nine yards.

Europe’s economic growth has ground to a halt. The German economy actually shrank last quarter, according to official statistics.

So the European Central Bank is throwing everything including the kitchen sink at this problem. Their stimulus package is like a monetary defibrillator trying to shock Europe’s economies back to growth.

It’s pretty amazing when you think about it: interest rates in Europe are already NEGATIVE. They’ve been cutting rates for years, and it hasn’t worked.

Back in July 2008, the European Central Bank’s main interest rate was 3.25%.

By the end of 2008, it was clear the global economy was slowing down, and the central bank had slashed interest rates to just 1%.

But they kept going.

By 2013, the ECB had reduced its primary interest rate all the way to zero.

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Simon Black, Misc.DINARRECAPS8

Here’s Every Reason To Avoid Buying A Gold ETF

.Notes From The Field By Simon Black

September 9, 2019  Bahia Beach, Puerto Rico

Here’s Every Reason To Avoid Buying A Gold ETF

Buckle up, this one’s going to be entertaining… because I should have called this note “Why you should always read the fine print.”

This morning I read through the prospectus and annual reports of the most popular Gold ETFs in the world.

First, some background:

ETF stands for ‘exchange-traded fund’. It’s sort of like a mutual fund that’s listed on the stock exchange, meaning investors can buy/sell shares of an ETF just like they would buy/sell shares of Apple, Ford, or (God help us) Netflix.

But unlike Apple, which is an operating business with employees, products, revenue, etc., an ETF is NOT an operating business. It’s a fund that merely pools capital to own assets.

The benefit for investors is that ETFs can be an easy and convenient way to invest in certain assets which would otherwise be difficult to buy.

If someone wants to buy Egyptian stocks, for example-- they could open a brokerage account in Cairo… or buy an Egypt ETF that’s listed on the New York Stock Exchange.

The ETF is a LOT easier for most investors.

But there are also ETFs for gold and silver. And I find this mystifying.

We’re not talking about Egyptian stocks. Gold and silver are easy to buy. You could have Canadian Maple Leaf gold coins delivered to your home with a few mouse clicks.

So gold ETFs provide no added convenience.

Yet there’s an enormous amount of downside.

First off-- it’s important to know that if you buy an ETF, you’re paying for a ton of unnecessary expenses.

The ETF has to pay custodian fees, marketing fees, listing fees to the New York Stock Exchange, audit fees, management fees, etc

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Misc., Simon BlackDINARRECAPS8

Here’s A Really Unique Way To Own Gold

.Notes From The Field By Simon Black

September 5, 2019   Bahia Beach, Puerto Rico

Here’s A Really Unique Way To Own Gold

Last week we dove into a series about different ways to own gold. And I explained in that first article why it’s a great idea to own physical bullion-- gold you can hold in your hand.

With physical gold, there’s no middleman standing between you and your wealth. And when properly stored, it’s very difficult for some frivolous creditor or out-of-control government agency to steal it.

When it comes to physical gold, I explained that I prefer gold coins over gold bars.

Gold bars are completely non-uniform. A typical 400-ounce gold bar (like the ones you see in the movies, or that you imagine are stacked up in Fort Knox) could weigh as little as 350 ounces, or as much as 430 ounces. They’re all different.

On the other hand, 1-ounce Canadian Gold Maple Leaf coins are generally all the same. They’re uniform… minted and crafted to the exact same standard.

The uniformity of gold coins like the Canadian Maple Leaf makes them much easier to buy/sell.

If you want to buy or sell a gold bar, it has to be weighed and assayed with special equipment first. But if you want to buy or sell a Maple leaf, it’s simple-- because the coins are pretty much all the same.

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Simon Black, Advice, Misc.DINARRECAPS8

Think About This If You Own Hong Kong Dollars

.Notes From The Field By Simon Black

September 3, 2019   Bahia Beach, Puerto Rico

Think About This If You Own Hong Kong Dollars

On January 20, 1841, after delivering a series of military defeats to Imperial China in the First Opium War, British forces landed in Hong Kong and took control of the island.

Hong Kong was hugely important for the British economy because it ensured access to the Chinese market. And they went to war multiple times to keep control of the island.

In 1898 the two empires signed a lasting peace treaty whereby Britain agreed to turn the island over to China in 1997. And Hong Kong prospered for decades under British rule.

But by early 1980s, Hong Kong started experiencing more turbulent times.

International businesses, bankers, and traders were becoming concerned about the Chinese handover that would take place 15 years later.

And when China’s Deng Xiaoping expressed his desire to hit the gas pedal on Hong Kong’s return to China, investors panicked.

Between September 1982 and September 1983, the Hong Kong dollar lost 25% of its value against the US dollar. Within a week, by early October, it had lost another 15% of its value. And it continued losing ground by the day.

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Misc., Simon BlackDINARRECAPS8

How To Invest Like Paul McCartney and Michael Jackson

.Notes From The Field  By Simon Black

August 29, 2019  Bahia Beach, Puerto Rico

Here’s how you can invest like Paul McCartney and Michael Jackson

In 1978, a scruffy-looking Frenchman named Patrick Hernandez signed his first-ever recording contract.

He had spent the better part of the previous decade touring ballrooms in France, backing b-class singers without any real success to show for himself.

But in late 1978, he released his very first single, “Born to Be Alive.”

The song was an instant hit. It hit the number 1 spot in France, and within a few months, sold over a million copies in the US alone.

And Hernandez became a sensation. By the end of 1979, he had amassed fifty-two gold and platinum record awards from more than fifty countries.

 Just like that, he was set for life.

And 40 years later that same single still earns him around 1,200 euros per day...roughly 438,000 euros per year.

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How To Become A Billionaire In Five Easy Steps

.Notes From The Field  By Simon Black

August 28, 2019   Bahia Beach, Puerto Rico

How To Become A Billionaire In Five Easy Steps

Every morning here in Puerto Rico, I wake up around 6am as the sun rises over the ocean in front of my house. And I pretty much head straight to the gym.

Once there, one of my favorite medieval torture devices is a fairly new exercise bike called a Peloton.

In case you haven’t used one before, a Peloton is like any other stationary exercise bike. You pedal a lot, and it sucks.

The key difference is that Peloton bikes are connected to the Internet, and the company live streams classes directly to the integrated monitor on your bike.

So instead of going to a spinning class, you can simulate being in a class and having someone yell at you from thousands of miles away.

You might be thinking-- can’t you get the same experience on a regular stationary bike while watching some YouTube videos?

Why yes, that would pretty much be the same experience.

But Peloton prides itself on building wellness, connectedness, and happiness-- all the ‘ness’s’ that Millennials love. So it’s pretty popular.

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Misc., Simon BlackDINARRECAPS8

Here’s A Dirty Secret Few People Know About Gold

.Notes From The Field   By Simon Black

August 26, 2019   San Juan, Puerto Rico

Here’s A Dirty Secret Few People Know About Gold

In 1962 in a picturesque setting in Santa Barbara, California, two local entrepreneurs opened a low-cost, roadside inn where the nightly room rate was just $6.

They called it Motel 6.

And today the chain has grown to over 1,400 locations.

If you want the most straightforward explanation for why you should own gold, consider your local Motel 6.

It’s noteworthy that, today, the very same Santa Barbara location now rents its rooms for nearly $90 per night.

That’s a 15x increase in 57 years, an average increase of roughly 5% per year.

Are the rooms 15x bigger, or 15x nicer? Not really.

The reason the price has increased so much is because of inflation-- the gradual erosion of the US dollar’s purchasing power over the past several decades.

This is why it’s important to have a conversation about gold.

Unlike paper currencies, gold has a 5,000 year track record of keeping up with inflation.

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4 Compelling Reasons To Be Thinking About Gold

.Notes From The Field   By Simon Black

August 21, 2019   San Juan, Puerto Rico

4 Compelling Reasons To Be Thinking About Gold

From time to time it’s important to take a giant step back and take a fresh look at everything that’s going on with a big picture perspective.

The last few weeks have been nothing short of incredible… so many important things happening that have never happened before ever. Let’s take a step back together:

1) $50 Billion To “Elevate Your Consciousness”

As we discussed on Monday, WeWork filed its formal IPO paperwork in the United States last week, indicating that the company will be worth nearly $50 BILLION when it goes public.

 WeWork has never turned a profit. It doesn’t expect to turn a profit. It doesn’t have a plan to turn a profit. And it claims its mission is to ‘elevate the world’s consciousness’.

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Misc., Simon BlackDINARRECAPS8