A testing time for gold bugs
ACE mining writer Brendan Ryan took a dig at last week’s column on the imminent absorption of the Stanlib Gold & Precious Metals fund into the asset manager’s broader Resources Fund.
I proclaimed myself pleased with the change, having exhausted my patience on gold stocks for the past decade.
To which Ryan hooted: “Oh ye of little faith. Is this the same man who wrote the following on July 11 2010?: ‘I keep a live I-Net ticker of Harmony’s share price on my screen, every day praying the blighter’s going to burst from the top of the PC, shoot up a level, whizz past the boss’s nose, punch through the fourth floor, then rocket ever onward into the bright highveld sky. My name is Jeremy Thomas and I’m a gold bug.’
“Verraier! ” crowed Ryan, going on to suggest I lacked common sense when it came to picking the right gold stocks.
“Ever heard of Pan African Resources or Sibanye Gold?”
Well, yes I have heard of those stocks, which without doubt form part of my existing Stanlib fund. I also know both were monkey-hammered in May along with my darling Harmony. So, no. Still no regrets about bailing out of gold.
However, I am intrigued by the unflinching faith in the beleaguered sector held by Investec Value Fund manager John Biccard. The poor guy has seen his unit trust’s performance plunge in recent times — mainly because he refuses to follow the herd. Will his time come?
In an interview with Moneyweb, Biccard said he avoided expensive old-man stocks such as Naspers, BAT and SABMiller that to a large extent drive the All Share index.
The poor guy has seen performance plunge in recent times — mainly because he refuses to follow the herd
Instead, for the past 18 months, he has run a very concentrated portfolio — the bulk of which is in just five shares.
Gold Fields, AngloGold and Sibanye constitute 25% of the portfolio. Platinum shares make up 13% (principally in the form of AngloPlats, which makes up 11% on its own). Together, gold and platinum shares constitute nearly 40% of the Investec Value Fund.
“And then we’ve got 10% in Steinhoff , which we’ve held for six years now. About 25% is offshore, we have 10% in cash, and the rest are smaller shares, things like Sappi, and a bit of banks.”
Wow. The gold bug in me really hopes Biccard comes good, but I would be a really nervous investor right now.
My statement last week that “I doubt any major investment house has not beaten the [JSE All Share] index over the long term” raised the hackles of reader “tinpot” on bdlive.co.za: “Extraordinary claims require extraordinary evidence. Or any evidence will do.”
I had shown that the Allan Gray Equity Fund since 1998 handily beat the index (even after deducting management fees). If other managers want to prove their credentials — and if anyone wants to dispute the virtues of active management versus index-tracking — feel free to send stuff to letters@businesstimes.co.za