James Grant is a value investor when it comes to stocks. And a bull on gold. He explains the difference in his latest Forbes column:
Value investors buy stocks or bonds by the numbers. They compare price with value and buy if the discount is suitably deep. They turn a deaf ear to macroeconomic theorizing. Whether the gross domestic product is rising briskly or not at all is immaterial if a particular company is priced at less than its readily ascertainable net asset value.
Gold is something different. You buy it solely for macroeconomic considerations. I buy gold as a hedge against the stewards of paper money. I buy Krugerrands, the metal itself, suitable for burying in the turnip patch. I expect the price of the South African gold coins to keep going up, but I don't know how high.
Unlike Grant, I don't own any Krugerrands. Or any gold coins. But like him, I do own some Japanese stocks.
Which reminds me. With the recent (mostly) sinking action of stocks in The Land of the Rising Sun, how do you say "Ouch!" in Japanese? ;-)