Never stand in line to buy an asset

"Well, my first misadventure with gold was standing in a queue in front of the Nicholas Deak currency and coin shop, which was on lower Broadway. And it might have been January of 1980 at the very peak but if not then, it was late 1979. I almost top ticked it. That was before I learned never to stand in line to buy an asset. You always want to go where nobody else is in line."

Jim Grant, May 20th 2011

Below are articles/reports I have found interesting over the last week:

1. Jim Grant – Q&A: refutes the fallacy of counterfactual statements that the world would end if the Fed had not intervened to prevent a systemic collapse in 2008, why a gold standard in our lifetimes is coming, on whether he is buying gold currently, on inflation, on corporate valuation, and where (and more importantly when) investors should be putting money to work. Here is also a 30 minute interview with Jim on Gold Money with James Turk.

2. “The Hidden State Financial Crisis” - by Meredith Whitney. After 25 weeks of consecutive and material outflow from municipal funds, Whitney doubles down focusing on state finances.

3. “Straight from the Horse’s Mouth” – May commentary from Ice Cap Asset Management. Page 4 is a nice touch.

4. “Commodity Prices, Inflation Measures, and Inflation Targeting”: presentation by James Bullard of the St. Louis Fed. To contextualize his views on core inflation, here is his latest speech given recently in New York: “Measuring Inflation: The Core is Rotten”.

5. “Why Facebook Needs Sheryl Sandberg”: profile of Mark Zuckerberg’s COO. Coincidentally, she is a cousin of David Einhorn.

6. “Now is not the time to raise interest rates”: superb article by Adam Posen (external member of the BOE MPC) in the FT. Note you need to be subscribed.

7. Ira Sohn Conference Notes: Hedge Fund Manager Presentations: Part 1 (Sabretooth, TPG, Centerbrige, KKR, Harbinger and Kynikos) and Part 2 (Frontpoint, Pershing Square, Gotham, Greenlight, Icahn, Corriente, DoubleLine, Marc Faber, Cerberus and Trian). Here is David Einhorn’s speech where he goes through his investment thesis for Delta Lloyd and Microsoft. Please send on any presentations or speeches from this conference you come across.

8. Here is a recent Bloomberg interview of Mark Faber: “in front of far too many luxury hotels there are far too many Ferraris, Maseratis, Bentleys... I see a boom everywhere, except for the working class, except for the lower, middle class. But among the well to do people the wealth that is floating around and the prices you pay for high end properties is incredible, and I think that will come to an end, and a lot of people will lose a lot of money... I was in La Jolla, Laguna Beach, Newport Beach, I was in front of a restaurant smoking and I've never seen so many Ferraris, Maseratis, Bentleys and fancy cars anywhere in the world, and this is in America. I am not saying this is wrong, but there is an opulence among a small group of people that is huge when there are lots of people that are struggling. This gives me a bad feeling because I've seen so many emerging economies when they were booming, that was the time to get out." This week's must watch.

9. “Update After PCAR, Troika Visit and SPU” - Bank recapitalisation an important watershed in recovery from crisis; focus will be on fiscal aggregates from now on – a recent NTMA presentation on Ireland. Attachment available on request.

10. “President's Fine Words May Not Address the Middle East's Real Needs”: Robert Fisk discusses what Obama should have said in his recent speech.

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