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Christian Magoon  

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  • Mad COW? The Only Livestock ETP To Consider [View article]
    Thanks for the comments. I can appreciate the concerns about the ETN structure and for many this is a non starter. For others, the ETNs may provide a more accessible route than directly owning futures in order to execute on a tactical idea.
    Judging by asset levels in these ETNs, it is clear that investors haven't found livestock ETNs to be a very compelling investment thus far. It will be interesting to monitor their activity now that a catalyst has been released in this space.
    Apr 24, 2012. 09:45 PM | Likes Like |Link to Comment
  • A Real BRIC Breaker: EEB [View article]
    Good take PS. The long term performance has been in EEB's favor. Perhaps the ADR process has more investment merit built into it than most realize.
    Apr 23, 2012. 11:10 AM | Likes Like |Link to Comment
  • Will Gold Dodge These 2 Bullets? [View article]
    Hi Robert, thanks for the comment and welcome back.

    I think you make a good point that the ultimate value of the dollar versus gold is determined by the price of gold in dollars. The challenge is the two fold element of gold's return: the currency it is denominated in and the actual level of supply and demand for gold.

    The index I used in the chart ($USD) is the U.S. Dollar Cash Settle, End of Day. It compares the U.S. Dollar to a basket of 6 currencies including: Euro (57.6%), Japanese Yen (13.6%), UK Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%). Thus $USD shows relative movement in the value of the U.S Dollar to other forms of paper currency. Adding GLD, which is denominated in U.S. Dollars, adds another - perhaps more pure - dimension to the chart that is needed for the comparison.

    The purpose of this comparison chart was to illustrate which investment suffered and which benefited during the "risk off" period surrounding the Greek debt crisis around its peak. Viewing $USD we see that the U.S. Dollar was strengthening relative to other currencies while at the same time GLD, denominated in U.S. Dollars, was plunging. This helps to form a view of what was primarily driving GLD's price during that period. Although this comparison is not exact, it is the best way I have found so far to paint the picture.

    Kitco does a nice job of explaining the two sources of gold price movement: supply and demand for gold and in the U.S. investor case, the direction of the U.S. Dollar. Here's a portion of that piece:

    "When the US Dollar gets stronger, it takes fewer dollars to buy any commodity that is priced in $USD. When the US Dollar gets weaker it takes more dollars to purchase the same commodity.

    The price of all US Dollar denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. So it’s quite possible, in fact it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the US Dollar. Sometimes that portion is insignificant. But often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing US Dollar value.

    When the dollar gets strong, gold appears to go down, and vice versa. That accounts for part of the fluctuations that we see in the value of gold.

    The other part is an actual increase in the supply or demand for gold. If the price is higher when being measured not only in US Dollars, but also in Euros, Pounds Sterling, Japanese Yen, and every other major currency, then we know the gold demand is higher and it has actually increased in value.

    Consequently, if gold is higher in US Dollars while at the same time cheaper in every other currency, then we can conclude that the US Dollar has weakened, and that gold has actually lost value in all other currencies. But the price, because it is being quoted in $USD will be higher and give the illusion of gold becoming more valuable. In such a case the devaluation of gold, due to increased supply on the market, is camouflaged by a weakened US Dollar."
    Apr 22, 2012. 11:06 PM | 2 Likes Like |Link to Comment
  • Will Gold Dodge These 2 Bullets? [View article]
    Thanks for the lively debate and comments everyone. I think we can all agree that gold will continue to capture investor attention one way or the other.
    Apr 19, 2012. 11:45 AM | 2 Likes Like |Link to Comment
  • Gold Stock ETF Performance And Analysis [View article]
    Good questions.

    I think the "experts" cited in Barron's see another significant correction in gold - perhaps similar to the end of 2011. It seems like that could occur two ways, a stronger dollar or with sustained equity market gains.

    I don't think gold is going to crash but I lean towards more downside in the short term. I believe this only strengthens gold's attractiveness over the long term however. I do think new highs in gold are inevitable.

    Gold stocks are definitely more complicated, especially now with talk growing about hedging their exposure to gold. Perhaps gold stocks could end up being similar to oil stocks in the late 90's when investors' patience was sorely tested. (at least the price of oil was super low in that case)

    Thanks for taking time to read the article.
    Apr 17, 2012. 11:56 PM | Likes Like |Link to Comment
  • Better Gold ETF Now? GDX Or GDXJ [View article]
    Thanks for the comment.
    I wasn't comfortable using the dividend numbers for GDXJ as there is no 30 Day SEC Yield figure listed on the Market Vectors website. (at least that I could find)
    Good point on the dividend though - paid to wait, poised to rally perhaps?
    Apr 17, 2012. 12:31 AM | Likes Like |Link to Comment
  • The Best ETF For A Romney Presidency? How About FRAK [View article]
    Thanks for your comment. Fracking and unconventional oil and gas drilling definitely has its share of controversy, which you point out. FRAK is an easy way to express your opinion - long or short - on the sector.
    Mar 30, 2012. 11:14 AM | 2 Likes Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    Good point jollyannie.

    Yes, India's recent doubling on the taxation of imported gold will certainly have a negative impact on gold demand from 2011's largest consumer of gold. In addition a slowdown in China - number 2 last year - could be negative as well. Thanks for the comment.
    Mar 30, 2012. 09:06 AM | 2 Likes Like |Link to Comment
  • Are Gold Prices About To Collapse? [View article]
    Here are a few data points - lower consecutive violations of the 50 day moving average, more frequent violations of the 200 day, a recent slope downward of the gold ETF volatility index - that stuck out to me when I took a closer look at GLD.
    Mar 29, 2012. 09:48 PM | 1 Like Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    Thanks for the comment.
    I think there is a growing asset allocation crowd using physical gold ETFs. They fit right between The Geoffster (trading) and the "gold as money" crowd - who I agree should just buy some coins and not shares of an ETF.
    Mar 29, 2012. 09:35 PM | 3 Likes Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    Good points.

    I began researching this article to try to gauge market sentiment on gold given the recovery story. My thought was the recent price fade in gold could be analyzed in more detail by a combination of longer term moving average comparisons and volatility levels. Looking at both seems to confirm my gut.

    As you rightly point out, the reason might be as commonsense as the "fear factor" receding. If I could have just satisfied my curiosity on that, I would have saved myself some time!

    Thank you for the read and comments with personality!
    Mar 29, 2012. 09:29 PM | 2 Likes Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    Correction has been made to the article. All good.
    Mar 29, 2012. 09:18 PM | 1 Like Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    Hi TFL - Thanks for the comments. GVZ is interesting to me and I wonder if an ETF or ETN might be made out of it at some point. (maybe not given TVIX)

    Checked out your first link and ended up becoming a follower. Will take a good look at the 150 day.

    Keep up the insightful content and congrats on being an Opinion Leader!
    Mar 29, 2012. 09:18 PM | 2 Likes Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    I agree with your concern about paper currency - it has a very long history of not keeping its value. That reason alone is enough to make gold attractive to me over the long term. Last time I looked at the 10 year performance chart of gold vs. the USD, it read USD -30% and gold +470%.

    I don't know Frank Holmes personally but I think he provides some great insights.

    A few months back I wrote an article on Seeking Alpha which quoted a study State Street (GLD) published that estimated the price of gold if the U.S. returned to the gold standard. Answer? $6,000. Here's the link to the story and the explanation behind State Street's calculation.

    Thanks for the read and insightful comments.
    Mar 29, 2012. 09:11 PM | 3 Likes Like |Link to Comment
  • GLD ETF: 3 Red Flags To Consider [View article]
    I'm posting a correction on my gold article. GLD, is the largest gold ETF globally but not the first physical gold ETF globally. That achievement belongs to ETF Securities. You can read about it here.
    GLD was the first physical gold ETF in the United States.
    I have submitted a correction notice to the editors and my apologizes to ETF Securities - and Chairman Graham Tuckwell - for the oversight.
    Mar 29, 2012. 04:57 PM | 2 Likes Like |Link to Comment