.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.
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.
I’m chairman of the Board of Directors for a company that’s listed on a stock exchange, and trust me-- the listing fees are REALLY expensive.
If you own physical gold in your own safe, you wouldn’t have to suffer the cost of paying lawyers, auditors, and investment bankers.
But GLD does. Which means that as a GLD investor, YOU are fundamentally paying those costs.
And remember that ETFs aren’t operating businesses. Apple makes money selling overpriced hardware. But GLD has no products, and hence doesn’t generate any revenue.
To continue reading, please go to the original article at
https://www.sovereignman.com/investing/heres-every-reason-to-avoid-buying-a-gold-etf-25548/
To your freedom & prosperity, Simon Black Founder, SovereignMan.com
.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.
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.
Now, there’s one special sub-category of gold and silver coins that are worth mentioning: collectible coins.
Collectible coins, just like Canadian Maple Leaf coins, have value because of their gold or silver content.
But collectibles also have additional value for their rarity.
Whereas the Royal Mint of Canada produces new Maple Leaf coins every single year, no one can go back in time to mint more Venetian gold ducats from the 14th century. There are only a fixed number of those coins in existence.
Because of that, collectible coins sell for a significant premium to the value of their gold or silver content.
This concept of ‘premium’ is an important one: ALL coins, whether a rare coin or a bullion coin like a Canadian Maple Leaf, generally sell for an additional amount above the gold price.
That’s because, unlike a gold bar which is simply poured into a cast (and rather unevenly at that), a coin has a lot of craftsmanship that goes into the minting process. It’s more expensive to produce, therefore it costs a bit more.
That premium can be between $20 and $150 per coin.
To continue reading, please go to the original article at
https://www.sovereignman.com/investing/heres-a-really-unique-way-to-own-gold-25537/
.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.
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.
The currency was in free-fall. So in mid-October 1983, the Hong Kong government stabilized the currency by fixing the exchange rate to the US dollar.
It has remained that way for the past 36 years.
This ‘pegged’ exchange rate provided a lot of benefit to Hong Kong back then, helping cement its status as an international financial center.
And I’ve been writing about this for years: the pegged exchange rate means that the Hong Kong dollar has all the benefits of the US dollar, without any of the baggage.
The US dollar has international recognition and stability. Hong Kong’s currency is pegged to the US dollar, so it shares those benefits too.
But while the United States is drowning in debt with $50+ trillion in unfunded pension liabilities, Hong Kong has massive financial reserves, positive cash flow, and a healthy current account surplus.
To continue reading, please go to the original article at
https://www.sovereignman.com/trends/think-about-this-if-you-own-hong-kong-dollars-25532/
To your freedom, Simon Black Founder, SovereignMan.com
.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.
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.
Even his official music video has over 100 million views on Youtube - the envy of most professional YouTubers.
Imagine getting paid hundreds of thousands of dollars per year for something you created over thirty years ago!
It’s rare, but it’s possible… and one of the best ways to do it is with royalties.
Royalties are cash payments you receive from assets you’ve created or own. Millions of people worldwide earn royalties every year - on assets as diverse as books, songs and movies-- but also from lesser-known sources like oil wells, gold mines or real estate.
Royalties are an all-time favorite of investors around the world - including Warren Buffett.
That’s because once you own the asset, all you’ve got to do is collect your cash every month or quarter.
I personally love royalties. To me, they are real assets - and generate income no matter what’s happening in the economy.
In times of inflation, the value of your asset goes up, protecting your savings.
In a deflationary period, the cash that the asset produces becomes even more valuable.
And the cash flow can be incredible…
To continue reading, please go to the original article at
.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.
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.
And following in the footsteps of WeWork, Peloton formally filed paperwork yesterday to go public on the NASDAQ under ticker symbol PTON.
The company anticipates a share price that will value the company at roughly $8 billion.
Yet according to its filing, the company lost $195 million in the fiscal year ending June 30, 2019. That’s four times worse than the company’s $48 million loss in Fiscal Year 2018.
It’s normal for early-stage businesses to lose money at first. Rome wasn’t built in a day. But usually management can provide guidance about the light at the end of the tunnel.
Not Peloton.
Just like WeWork, Peloton expects to continue losing money for the foreseeable future, and acknowledges that they may never achieve profitability.
Peloton also provides the most absurd statements as its company mission. Just like how WeWork aims to ‘elevate the world’s consciousness’, Peloton claims that it “sells happiness”.
It’s SEC filing also contains a bunch of fluffy graphics showing off their diversity, community, and interconnectedness.
To continue reading, please go to the original article at
https://www.sovereignman.com/investing/how-to-become-a-billionaire-in-five-easy-steps-25518/
.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.
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.
In fact, when priced in gold, a room at the Motel 6 has actually gotten cheaper.
Back in 1962, an ounce of gold would buy you about 6 nights at the motel. Now, despite the 12-fold increase in the price of a room, one ounce of gold will buy you 21 nights there.
That’s because the price of gold has largely outpaced the rate of inflation and the decline in the purchasing power of the US dollar.
Gold is a fantastic long-term store of value. It’s also an insurance policy-- a hedge against paper currency, systemic risk, and uncertainty.
And there’s plenty of those in the world.
But there’s also a number of catalysts emerging right now that could send gold prices substantially higher in the near future, so it may be worth considering gold right now as a speculation.
There have been several times in history where gold has experienced wild swings in value against paper currency. And some people got very rich from it.
In the coming days and weeks, I’ll be writing a series of articles on different ways to own gold.
And it’s my hope that you’ll use the information to as part of your Plan B, not only to hedge against looming risks, but also to potentially profit from uncertainty in the system.
To continue reading, please go to the original article at
https://www.sovereignman.com/trends/heres-a-dirty-secret-few-people-know-about-gold-25505/
To your freedom, Simon Black, Founder, SovereignMan.com
.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.
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’.
WeWork owns no real estate. It has almost no assets. In fact, WeWork’s primary asset is the office space it currently leases (i.e. does not own).
And to be fair, they’re leasing a LOT of space. WeWork hopes to eventually lease 40 million square feet of office space.
But at $50 BILLION, investors are essentially paying $1,250 for each square foot of office space that WeWork is LEASING.
That’s almost as expensive as what it costs to BUY in New York City.
Talk about overpaying.
Then there are the ridiculous shenanigans of WeWork’s co-founder/CEO Adam Neumann, who has a history of unethical behavior.
Neumann charged his own company nearly $6 million for the “We” trademark earlier this year. He borrowed money from the company to buy real estate that he immediately leased back to WeWork.
And now he’s selling shares in this IPO to investors which have dramatically diminished voting rights… further cementing his power over the company.
So not only are investors dramatically overpaying for a company that has very few assets and burns cash with no end in sight, but they’re willingly giving up control to someone who has a history of enriching himself at their expense.
2) Yikes! Interest rates
But perhaps even more insane than WeWork (if that’s even possible) is what’s happening with interest rates.
To continue reading, please go to the original article at
https://www.sovereignman.com/investing/4-compelling-reasons-to-be-thinking-about-gold-25490/
.Just When You Think You Own Your Own Private Property
.Notes From The Field By Simon Black
August 20, 2019 San Juan, Puerto Rico
Just When You Think You Own Your Own Private Property. .
The year was 1967. Ronald Reagan had just become governor of California. Aretha Franklin was belting out R-E-S-P-E-C-T on the radio. Marxist revolutionary leader Che Guevara was captured and executed in Bolivia.
And a restaurant chain called The White Spot opened its newest location in Denver, Colorado.
It was a popular diner; the White Spot served pancakes and milkshakes to customers for decades, and ownership of the Denver location eventually changed hands when an entrepreneur named Tom Messina bought the diner in 1999.
Notes From The Field By Simon Black
August 20, 2019 San Juan, Puerto Rico
Just When You Think You Own Your Own Private Property. .
The year was 1967. Ronald Reagan had just become governor of California. Aretha Franklin was belting out R-E-S-P-E-C-T on the radio. Marxist revolutionary leader Che Guevara was captured and executed in Bolivia.
And a restaurant chain called The White Spot opened its newest location in Denver, Colorado.
It was a popular diner; the White Spot served pancakes and milkshakes to customers for decades, and ownership of the Denver location eventually changed hands when an entrepreneur named Tom Messina bought the diner in 1999.
He changed the name from the White Spot to Tom’s Diner, and he’s been serving Denver customers for the last 20 years.
But Tom turned 60 recently, and he’s thinking about retirement. After two decades of cracking eggs and frying bacon, he’s ready to spend more time with his family.
And fortunately for Tom, he’s sitting on an extremely valuable asset: his real estate. Tom’s diner is located in downtown Denver in an area that has been heavily redeveloped.
Decades ago the land wasn’t worth very much. But in recent years, Denver became one of the fastest growing cities in the country. Property prices skyrocketed.
In fact, a local real estate developer offered Tom nearly $5 million for his land; it’s an ideal spot to build condominiums given how popular downtown Denver has become.
$5 million is a good chunk of money for anyone, and certainly more than enough for Tom to retire comfortably.
And that’s when a handful of whiny activists stepped and stomped all over Tom’s retirement dream.
After hearing about the deal, five local residents filed an application with the city to have Tom’s Diner declared a historic landmark.
And, if granted, historic status would mean that the diner would be frozen in time forever… and could not be demolished or redeveloped into condos.
Historic status would effectively render Tom’s land completely worthless; no real estate developer would ever pay him top dollar for land that couldn’t be redeveloped.
And that’s tantamount to theft-- the city, and a handful of idiotic activists-- stealing nearly $5 million worth of value.
This is pretty remarkable when you think about it.
To continue reading, please go to the original article at
https://www.sovereignman.com/trends/just-when-you-think-you-own-your-own-private-property-25477/