A Golden Mulligan

Few would dispute that the twelve year (and still counting) bull market in gold has been the opportunity of this investment lifetime. Even fewer have participated. From its 20 year bear market low in August of 1999, bullion has appreciated more than seven fold. That works out to a $US compound return of 18.0% compared to 0.7% for the S&P 500. There is a paltry $2 trillion of investment gold, approximately 1% of global financial assets. It is not main stream. It is not widely held. The rationale for investing is antithetical to mainstream thinking. The opportunity has been missed by almost every conceivable category of investor including pension funds,
endowments, mutual funds, and central banks, all of whom could be safely described as
underweight the metal, overweight dicey financial assets. Despite the headlines, gold remains under owned.

To regard the lengthy bull market in gold as an isolated fact would be simplistic and superficial. The media and most of the financial community are captivated by daily price action, but see nothing more. To most, it is a speculation, probably an overcrowded trade, and maybe a bubble. It is seen in the narrowest of terms, as an odd curiosity that will at some point just go away.

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