At some point, someone's purchases have to matter, to facilitate a clearing price vis a vis those who wish to own more gold and those who are willing to part with some. There are countless ways to look at the question; one could argue, for example, that E.M. demand from CBs and aspiring middle class individuals is a sort of proxy for inflation protection and inflation / crisis expectations -- financial sunscreen for those with too much sun exposure. Just thought it was interesting is all. There are plenty of potential implications / food for thought questions (too many to go into as I spend too much time on this thread anyway).
http://www.athensnews.gr/portal/8/56296 Be careful if there is a silly panic in a Syriza win. They are not likely to be able to form a government at all
Even assuming other things being equal (a false assumption in the real world, just look at the historical data for high beta stocks), the asymmetry only presents value if the price premium for the higher beta asset is lower than the asymmetry merits. If this were not that case then there would never be a case for owning low beta assets in favour of higher beta assets, and high beta assets would thus deserve an infinite premium over their lower beta cousins. Since this is obviously absurd, then the asymmetry does not always make the higher beta asset the better trading vehicle - as successful value investors note, it all depends on the price you pay and the value you get. Hence my comment about value in the original question. As for the market factoring things in...ah, suddenly now you want to move away from theory into real world assumptions? Make you mind up! Either we're debating theory or the real world, you can't legitimately flip flop between them just to suit your argument. If stock A has beta 1 and stock B has a beta of 2, then you yourself admitted you would bid for stock B if everything else was the same, to take advantage of the free put offered by limited liability, and the greater upside. So, your own position claims that it's an obvious buy at that price - yet you claim the market won't recognise this? The onus is on you to prove that market participants would consistently make such an oversight. I don't see any reason they are more likely to underprice high beta 'leverage' than any other factor. P.S. I was referring to permanent capital loss also - something which high beta stocks suffer more often than their low beta cousins.
Historical data doesn't help much -- you don't buy "high beta stocks" as an asset class, you select for quality. There are significant reasons why, say, higher beta small-cap value stocks have more embedded potential (if one knows how to dsicriminate) -- a large one being that institutional investors often face size and liquidity restrictions that keep them out of the higher beta small cap arena. Re, case for owning lower beta assets: Dividend yields, safety, and size will always be arguments in favor (though again, you don't seek out these stocks as a class, or actually maybe you do if you passive index). Futhermore, one can imagine a goal continuum: Maximization of compound gains at one end, preservation of capital at the other end. High beta vs low beta as a general rule tend to distribute across the poles, if you include dividend yields as a prime reason for investing in the low beta group. Then add into the mix that the higher risk of temporary capital impairment on the beta side (through volatility) can be mitigated through the application of skill. All of this is nutshelled by Buffett (again) in his statement that he is confident he could make 50% per year managing smaller sums... he wouldn't do that buying sleepy names for 3% yields. Market participants DO make such oversights for the reasons I just mentioned. There is a class of stocks that tends to be higher beta in aggregate -- small cap value, stub stocks, spinoffs, OTC pink sheets etc -- that the institutional world deems "too small to mess with" for structural logistical reasons. This creates a powerful case for persistent higher returns in this area -- the field of competition is much reduced. (BUT not higher returns "in aggregate" -- rather higher returns in the best-in-class selection of opportunities from this group - the top decile let's say.) Also as a general rule, the less followed the stock (in terms of analyst coverage etc), the greater the likelihood that something important may not be priced in / valued correctly, thus increasing profit potential. This tends to be a higher beta realm vs the stuff that the Fidelity manager buys for your Aunt Doreen's 401K. Probably true in aggregate, but again I don't see much value in perceiving the world this way. There are countless strategies out there, value and growth investing prominent among them, that come up somewhere between mediocre and terrible if you judge them by taking the skill out, e.g. trying to extrapolate across thousands of stocks. A truly skilled investor in the small cap value realm will be picking stocks with higher volatility in their share prices, but with real world odds of bankruptcy being near zero (because they are deliberately and obsessively focused on the underlying drivers and risks of the business). Not coincidentally this is why so many academic studies wind up with bad conclusions; some egghead declares that "technical analysis doesn't work" because he ran a simulated version of a head and shoulders pattern across 5,000 instances over a 10 year period, taking zero account for vehicle selection, position sizing, environmental factors, and so on (skill-based inputs with no chance of being replicated).
Greek election Q&A: http://ftalphaville.ft.com/blog/2012/06/15/1046611/10-questions-on-the-greek-election-answered/
Potential curveball coming out of Switzerland: http://www.cnbc.com/id/47814396 If the big Swiss banks were to get into trouble the state would have a really big problem bailing them out - though at the moment there seems to be no downside to printing unlimited amounts of CHF.
Am I the only one hoping for a clear ND victory on Sunday to set off a major fadeable risk rally on Sunday night? I remain long EURCHF, well-aware a clear Syriza victory on Sunday could overwhelm the SNB floor. I think it's a rather small chance, though.
I would like to see a ND victory. Probabilities from secret polls and Intrade seem to favor it. Euro/USD would soar, which would initially cause correlated SPX to soar as well. No Grexit any time soon. Der Deutschmen to boot them out for that to happen because the Greeks are not leaving voluntarily when they can keep milking the system.
I own a stock (GBG) and Google finance and Yahoo bizz give all different closings. Its listed in the US and Canada. On google finance it says for the US listing 0.630 -13.58% On yahoo bizz it says After Hours: 0.7490 Up 0.1190 (18.89%) The Canadian listing says 0.800 +0.080 (11.11%) on Google finance On yahoo bizz it says 3.71 Up 2.99(415.28%) I hope the last one is the real one since I own quite a bit of them.... Probably an error of some kind no?