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Brad Zigler

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  • Finding Order In (Commodity) Chaos [View article]
    Thanks, Filip.

    If you'll look back at the inclusion criteria for the universe, you'll see a match with the Credit Suisse Managed Futures Hedge Fund Index required funds to have 12-month track records and at least $50 million in assets. FMF was launched in August 2013 and has just $5 million under management. It didn't pass the screen.
    Sep 26, 2013. 10:56 AM | Likes Like |Link to Comment
  • Increasing Correlation Between Gold And Stocks: What Are Investors To Do? [View article]
    A short analysis of VIX-related products can be found in "Uncorrelate Me" (, republished here in July, 2011.

    In it, you'll see a trade favored by professional traders: spreads of VXX against VXZ that are designed to capture the decay at the short end of the VIX forward curve.

    To quote the article: "A short VXX/long VXZ trade has been a real alpha snagger for institutional portfolios and sophisticated traders. Begun with equal dollar weights, the spread has produced an average annual gain in excess of 9 percent since 2009. Now, that may not seem very attractive, given the 31 percent return obtained by the SPY portfolio, until you consider the spread's standard deviation. The volatility of daily spread returns, at 6 percent per annum, is a third of SPY's, making the spread a much more reliable source of gains ...

    [T]he spread's trajectory versus SPY ... spells out the compelling nature of the trade — excess annual returns of 7 percent against a beta-adjusted SPY investment. That's why the notes get so much traffic."
    Mar 20, 2012. 10:53 AM | 2 Likes Like |Link to Comment
  • How Metal Spreads Make More Money [View article]
    The spread is margined as a unitary trade, so the mark-to-market has been keyed to an average daily gain of 1.5% since February. I don't understand what you mean by "your loss."

    This is a directional trade, so yes, a loss could have been sustained if the ratio bounced back -- that is, if gold advanced more (or declined less) than silver.

    The ratio has actually been in steep decline since September, so it's not an overnight phenomenon.

    Spread traders' motivations are manifold. One shouldn't ignore the obvious one -- that, in this case, a trader would simply want to capitalize upon an anticipated decline in the gold/silver ratio.

    I'm not advocating the trade. Comments made in my previous columns on the gold/silver ratio spread, however, indicated that many investors didn't know how the trade really worked. This is merely an explanation of the trade's mechanics.
    Apr 12, 2011. 02:14 PM | 1 Like Like |Link to Comment
  • How Good Is Your Hard Asset Investment, Part 2 [View article]
    Simple answer: broad-based commodities, gold and oil are the more common metrics of inflation.
    Apr 7, 2011. 11:00 PM | 1 Like Like |Link to Comment
  • Inflation Speaks Many Languages [View article]
    But there's a "private measure" of inflation provided right here.

    The HAI Monetary Inflation Index is updated in real-time (daily) and shows the diminution in the dollar's global purchasing power --reflected in the gold and forex markets -- over the past 365 days has been 2.2%.
    Mar 31, 2011. 03:32 PM | Likes Like |Link to Comment
  • Is Palladium Overdone? [View article]
    Yes. As stated above. On futures.
    Mar 25, 2011. 05:54 PM | Likes Like |Link to Comment
  • Is Palladium Overdone? [View article]
    Option trading is now on.

    Contracts deliverable into NYMEX palladium futures are now available. The most active expiration is June.
    Mar 25, 2011. 01:03 PM | Likes Like |Link to Comment
  • Inflation Scorecard: Gold Clubbed by Currencies [View article]
    The point? Think for yourself.

    I supply the week-to-week data points. You can use them to bolster whatever theory you like.

    You might try looking at the primers for explanation of the various indicators.

    One thing, though:The notion about "printing money equals inflation" holds true only if there's DEMAND for money. Without demand, there's no velocity to the currency stream.
    Mar 18, 2011. 05:21 PM | 2 Likes Like |Link to Comment
  • Oil MOOving Ag Stocks Lower [View article]
    Natural gas prices have been tracing an entirely different price arc compared to crude oil and distilled fuels.
    Mar 9, 2011. 04:11 AM | 1 Like Like |Link to Comment
  • Bailing Out of Gold Miners [View article]
    "As the chart indicates, juniors are slumping, but established producers have been positively (or, more accurately, negatively) languid COMPARED WITH BULLION."

    The miners' behavior is illustrated relative to gold, not as a depiction of their absolute price performance.
    Mar 5, 2011. 01:52 PM | 1 Like Like |Link to Comment
  • Bailing Out of Gold Miners [View article]
    At issue here isn't KGC 's liquidity.

    It's not about selling the subject stock at ANY price. It's selling at a price that's lower than the investors' original cost basis without suffering a loss.

    It's still selling.

    Mar 5, 2011. 09:53 AM | Likes Like |Link to Comment
  • Bailing Out of Gold Miners [View article]
    No such contention (that ALL miners are "not doing well") was ever made.

    The numbers -- and the graphic -- speak for themselves.

    In the graph, the performance of the miners is pegged against that of bullion. Juniors started outperforming gold itself last fall, -- that is, their relative performance became positive -- but they've recently backed off. Their compound return is still better than bullion's.

    At the same time, producers underperformed bullion. Their collective gains have been less than that of gold.

    The article illustrates a tactic that an investor may use to exit a poor performer in order to replace it with a stock with better prospects.

    It's a perfectly valid way to depict sector performance.
    Mar 4, 2011. 03:13 PM | 1 Like Like |Link to Comment
  • Bailing Out of Gold Miners [View article]
    I'm crushed that you're bored. Absolutely crushed.

    You seem so savvy, too. How is it we missed Kinross' issuance of a "quadrillion shares"?

    This article isn't meant to ponder the fate of Kinross but, rather, to offer a potential solution to an investor predicament.

    Here, a strategy is illustrated that permits an investor to exit a laggard stock like KGC sooner, without additional capital risk, so that he/she might seek more fertile ground.

    As mentioned in the response to Reserved above, it's a money management tactic.You have something against money management?

    What of the investor that has his/her gold miner allocation tied up in KGC? Where are they going to find the capital for investment in a "better" mining stock? Without first exiting their KGC commitment, they'd have to raid another allocation.

    The first graph doesn't "prove" your contention at all. It only illustrates the relative price performance of producers (GDX) and E&D companies (GDXJ) versus bullion.

    The trade-off for "better" relative perrformance is volatility. Juniors are plainly more volatile than producers. Yes, the E&D outfits' stocks tend to zoom higher than than those of producers, but they also tend to fall harder.

    Volatility has a portfolio impact. Not all investors need that much beta.
    Mar 4, 2011. 02:58 PM | Likes Like |Link to Comment
  • Bailing Out of Gold Miners [View article]

    Look again at the article's penultimate paragraph. It's capped thus: "You have to possess faith in the stock's near-term upside for this trade to make sense."

    What's presented here is a money management strategy for investors who've knocked on the wrong door in the gold miners' neighborhood and may be hoping to redeploy their capital more favorably.

    All that's accomplished with the call spread is lowering the investor's effective cost basis.

    That's not doubt. That's just good business.

    Taking advantage of the market to bail out of a laggard allows investment in other assets -- perhaps even those you tout.
    Mar 4, 2011. 02:23 PM | 2 Likes Like |Link to Comment
  • Inflation Scorecard: More Dollar Erosion [View article]
    The strength of each currency vs gold.

    You'll note, at times, the MII rate of change and the EUR/USD cross rate diverged.

    The longer-term history can be viewed at a recent Desktop column at HAI (www.hardassetsinvestor...).
    Feb 26, 2011. 08:44 PM | Likes Like |Link to Comment