04 November 2012

Gold Symposium Trip

Back from my week long trip over East and have now caught up on the inbox/to-do. Monday and Tuesday was the Gold Symposium. Good to see a lot more bullion dealers there and a lot of people interested in the bullion investment sessions, in contrast to mining companies which has been the focus of the conference in the past.

David Evans from Gold Nerds gave the same presentation as last year but had tightened it up (click here). I think it is one of the best presentations for people new to gold or why they should be buying gold - its doesn't hype up the case or is too gloomer and is quite factual. If you have someone you are trying to convince to get into PMs, I'd recommend sending them this presentation.

Keith Weiner's presentation was also good but I can't find it on the Symposium slide share site. Other ones worth looking at are Richard Karn, Dan Denning and Rickards of course.

Funniest part was the presentation by the BetaShares guy on their USD hedged gold listed ASX product. I met him before his presentation and said I wouldn't heckle (as the Mint's PMGOLD is a competitor) but when he said that the 50% CGT discount didn't apply to physical gold purchases I couldn't let it go by with a comment/question at the end. However, I had to first wait for the inevitable questioning about his statement that physical buyers risked a 5%-10% cost for refining/assay when selling back!! He also lost a lot of people in trying to explain how the 30 forward FX hedge worked. All in all it was a Fail, as they say.

I think next year they should have one room for mining company presentations which you can drop in and out of as you see fit (plus it would give them a bit more time) with all the investment in PMs presentations in another room.

At the dinner/awards at the end Jean Kittson was very good with the mining/gold jokes. Also I think Gold Stackers should have won Trader of the Year award and got stooged on that.

Wednesday I went to the Sydney silverstackers lunch time meet up but had to cut that short because had lunch with Dirk Baur from University of Technology Sydney to chat about gold. He has done a few papers on gold, safe haven assets & seasonality - worth checking out for the academically minded, see his section on the SSRN website.

Thursday met up with BullionMark/Ainslie/Reserve Vault. Class outfits all of them and Mark will bring his usual professionalism to the Reserve Vault business providing another option for Brisbane stackers not happy with the outrageous Allocated storage fees of the Perth Mint :) Seriously the more options for investors the better for the market as a whole - its all about diversification.

Later in the day caught up with Warren from screwtapefiles blog to chat about his Bullion Bars Database project to see what we might be able to find out about the OTC bullion market. Pity Warren has a day job and can't spend all his time on that work as I think there are some nuggets buried in the data. Dinner later that night with some Brisbane PM bugs of varying ages was a treat intellectually and I was bummed to have to cut the stimulating conversion short due to an early flight out the next day.

Friday was a fly in and fly out visit to Nick of Sharelynx. It was great to meet Nick in person for the first time and we gasbagged on gold for about 6 hours straight and forgot about lunch (but not beer). The amount of data Nick has accumulated since the 1990s is invaluable. Well worth the subscription as I always say.

23 comments:

Lord Sidcup said...

The Gold Nerds presentation was interesting until it got derailed, going off on the climate change tangent.

Although plausible, the utter irrelevance of GoldNerds' ideological position on climate change, to the subject, puts doubt on their methodologies and arguments.

Justin said...

I'll also mention a recent quote from David Evans (on a certain website) that "gold is entirely useless (accompanied by some half-arsed qualification)".

Hard not to be doubtful of his methodologies and arguments when he has that mindset. Surely even the Perth Mint doesn't think gold is ENTIRELY useless?

Justin said...

Hey Bron

Did Jean crack any jokes about Norton Gold? If she didn't, she should have.

Anonymous said...

Hi Bron,

Firstly, outstanding work in helping people understand PM investing both here and around the various forums.

A couple of unrelated questions to this post, if I may...

Is there any likely cost difference to the customer of buying PMGOLD -v- Unallocated (for equivalent oz's)?

Is there then any cost difference for taking delivery of converted PMGOLD -vs- converted Unallocated?

Bron Suchecki said...

My understanding of David's climate change "tangent" was merely to show how gold is a fringe idea and will be treated the same as the fringe climate skeptics are dealt with by the mainstream.

Gold is useless and it is better to save IMO by investing in productive businesses but it is the go to asset for these times when you can't trust the system to allocate your savings correctly.

PMGOLD has a 0.15% management fee whereas Unallocated does not. Buy/sell fees probably the same after brokerage etc considered.

PMGOLD and Unallocated both use our standard fabrication premiums so no difference there.

Because of the management fee PMGOLD is really only better for those who want the convienence of trading via the ASX. If that is not important or you are likely to want physical, just easier to buy from a coin dealer or deal direct with Depository.

Anonymous said...

Many thanks. Didn't realise unallocated avoided the fee (nor did the depository service lady I spoke to this morning before going ahead and buying more PMGOLD).

Can I exercise to unallocated and avoid the mgmt fee?

Bron Suchecki said...

I'm surprised the person you spoke to didn't know about the fact that unallocated does not have any storage fee, it is one of the key selling points.

Should be no problem exercising PMGOLD into your Depository account but I would only do that if you are going to hold it long term. If short term then best to just sell PMGOLD and then buy unallocated in Depository, as the 0.15% is not much - only $15 per $10,000 held.

Justin said...

So yes Bron, you don't think gold is entirely useless.

Anonymous said...

Again, thank you. I'm looking to structure a reasonable amount of metal for long-term hold (only 1/3 way there via PMGOLD) and would value your advice. Is there some way we can have a quick chat (I have requested twitter access)?

Bron Suchecki said...

Don't use twitter, just parking my name. Easier to just call me on +61 8 9421 7379 or email me at perthmint.com.au (bron.suchecki)

Anonymous said...

Thanks. More than happy to avoid twitter. Will call you tomorrow morning (your time).

duggo said...

Dear Bron

As a man a the sharp-end of the metals market you should know the reality about shortages of precious metals. We are constantly bombarded with "conspiracy" talk, especially sites that have an interest in Silver, that there is this unbelievable shortage of Silver and that the Silver market will collapse at any moment. Is this true or just conspiracy talk?

My experience when walking through street markets is that there is tonnes of old Silverware for sale also, I never see any Cash for Silver shops.

You would think if there was such a shortage of Silver dealers would be going from house to house begging for it.

So what is the truth?

ampmfix said...

Thanks a lot Bron for the links!

Bron Suchecki said...

duggo,

The Perth Mint hasn't experienced any problems getting silver for our production. Maybe in some other regions there may be a temporary supply/demand imbalance but that would not last when it is easy to ship metal in from other locations, as the Mint did from London during 2008.

When I start seeing bullion banks or other fabricators coming to us willing to pay a premium for 1000oz silver bars, then I'll say there is a real shortage.

Anonymous said...

Bron-

What I have always liked about what you write here and other places that is clear-headed, level and based on the facts. This is quite refreshing in the sea mis- and dis-information out there, conspiracy theories etc.

The latter was on display in the nerd presentation. Whereas it began innocently enough with stock phrases about debt, money supply and inflation, it then descended into mad ravings, imo. Besides the utterly misplaced (and factually challenged) climate change ideology mentioned by others, the entire discussion of the ruling elites and conspiracy to control the world and its inhabitants would argue for investments not in gold, but rather tin foil. It do not entirely dismiss the possibility, but if you want to convince show me facts, not rants.

And therein ends my rant. Thanks for all your efforts. You're golden.

-S

Bron Suchecki said...

"ruling elites and conspiracy to control the world and its inhabitants"

I think you have read that into the 5th and last part of the presentation.

I just saw David raising the idea of a regulating class, whose ideology is one of centralisation and regulation. The existence of such attitudes in public servants and some (most?) politicans and the resulting dynamic where they reinforce their attitudes and build structures supporting it is not a conspiracy - none of those people are consciously conspiring with each other.

They are just attracting and pomoting like minded people and empire building bureaucracies because they think (incorrectly) that the average person needs to be told what to do and this is in the people's best interests, as well as in their best interest as well.

I don't consider that idea mad ravings. Possibly David needs to present it more dispassionately, but I think he is on to something with the idea of a regulating ideology as a negative dynamic and one we should focus on rather than conventional left/right ideology. If you can't identify the underlying problem, you won't be able to come up with the right solution.

Anonymous said...

Bron-

Inference no doubt plays a major role in digesting any presentation, particularly when said presentation seeks to convince you of something, and/or tries to elicit some action, but I think here my reading skills have not missed the mark. How do you interpret “Government . . . is making more decisions for us, and we have less freedom” or “[bureaucrats] [p]refer government (politics and coercion) to the marketplace (voluntary transactions)”? I think control is the most concise word to express this sentiment..

As for the tin-foilesque conspiracy elements, I would direct your attention to slides 48-51, which inform us that global warming is “manmade” in order to “control energy” and “regulate every economy.” And that this “silent coup by the regulating class” is aided and abetted by “Climate “science” is clearly flawed just an excuse” as well as a media that is threatened by and identifies with the ruling class. Does this not meet you definition of conspiracy?

I think your characterization of attracting and promoting like-minded people, as well as advancing structures to reinforce such, is spot on, but those are characteristics of society at large and pretty much any group of humans, and are in no measure unique to the ruling class, not now or in ancient Greece. Indeed, such confirmation bias probably was important when the first human societies were organized, and probably had an important evolutionary function.

Furthermore, I find many other elements that are just human nature (and are not new) but are cast in a sinister light in this presentation. We are give characteristics of the ruling class including “Prefer to pay themselves what they think they are worth,” “Core belief: they are superior to the rest of us.” Are these statements not true for all us? Or do you believe that the GoldNerds prefer to pay themselves less than what they think are worth? Do the GoldNerds think that they are inferior? (If so, why would I buy any of their products?)

I too reject the left/right theater; I’m just not willing to exchange one false ideology for another. Also, I am not saying that none of is true; undoubtedly some is, but I think your term “mad ravings” sums it up well. In any event, it has no place in an investment presentation, all the more so since if we take such statements at face value, we could easily reach the opposite conclusion, i.e., gold is a bad investment because the evil ruling class will someday take it away from you. The presence of such “mad ravings” immediately sets off warning bells in my head, but who knows, maybe I am the crazy one?

Thanks again for all your efforts.

-S

Anonymous said...

From one anon to another, great comments. :)

intuitivereason said...

Mainstream economics and mainstream climate science; peas in a pod. Economics just has a 65 year head start.

The beauty of wandering around the heretical edges of science is that you get a very clear picture where the errors are in the main flow. Whether or not the alternative theories are valid generally or not is almost insignificant.

Lord Sidcup said...

Thanks for your responses Bron.

Your interpretation of Gold Nerd's intentions seems extremely generous to him.

Your response seems to me much more intelligent and considered than anything the Gold Nerd himself is capable of.

Bron Suchecki said...

I tend to ignore the emotional or otherwise spin/taint that people put on thing and just focus on the idea, hence why I may come across as "generous".

I will concede that for a mass audience David should remove the "ravings" and emotive elements. At the moment it is the best (only?) one I've seen which discussed the political calculus driver for inflation and thus gold.

You should have seen the presentation he gave the year before - this one has been toned down.

Secret..Sauce said...

When I first looked at the presentation, I thought you put it up as a straw man, that is to show by comparison how logical and fact-based your writings are. I am sure many appreciate how you and a few others debunk various conspiracies, like massive Ag shorts, Au-challenged GLD, W bars, etc. The same rigor can be applied to political and scientific matters.

I too try to ignore extraneous elements, but it does destroy any credibility the author/speaker might have had, and raise questions as to the product’s added-value.

Now I’ll stop flogging this dead horse :)

-S

David Evans said...

Bron, looks like you have a few climate trolls commenting (though more likely only one, pretending to be several commenters). As I pointed out in my talk, their main method is to call names and discredit anyone who opposes them. My wife and I oppose them on climate change (joannenova.com.au is the 3rd biggest climate website on the skeptic in the world), so they go to ridiculous lengths to discredit us.

It’s obvious from their comments that they have no understanding or sympathy with gold.

I present facts (the Copenhagen conference really did happen, there really is a Copenhagen Treaty in draft form, it is still on the web, it really would have set up a global bureaucracy with the power to overrule, tax, and fine national governments, and our prime minister really did attend expecting to sign it), and their response is the usual pattern of smears:

- Switches topic to “climate change” asap

- The usual adjectives: ideological, mad ravings, factually challenged, tin foil, conspiracy, evil, not “intelligent”, not “considered”, lacking “rigor”, etc.

- The misquote and the quote out of context (which changes everything).


Notice that they didn’t talk about any other presenters, or indeed about anything else?

They go on and on, hoping readers will try to reach some sort of compromise with them by agreeing to their nonsense at least partially, with the implicit threat that they will continue kicking up a fuss until you agree. We call it bullying.

When gold is perceived as a threat to paper currencies and big government, they will employ these same smear tactics on sound money advocates too.