Meb Faber fund manager and analyst who runs a fascinating firm called Cambrian which boasts some of the most interesting ETFs stateside – I especially like their Tail Risk ETF. You can find out more about it here – https://www.cambriafunds.com/tail.
Anyway Faber is also hugely erudite and a real expert when it comes to investing and amongst many other things – including writing books – runs a great little podcast. I think the latest episode might be worth having a listen to – HERE
It features Meb plus Jesper Koll, Senior Advisor to WisdomTree and Jeremy Schwartz, WisdomTree’s Executive Vice President and Head of Global Research. The main subject of interest is Japan. From this discussion I’ve pulled out three fascinating quotes:
- Think Japan is expensive, think again !….”Tokyo is now the only major city in the world where if you work at a Starbucks, on that Starbucks average salary, you can afford to buy an apartment within a 45-minute commute from downtown Tokyo? That is impossible in Los Angeles, in Shanghai, in Berlin, in London, etc. So the irony is that after 25 years of the post-bubble workout, of 25 years of deflation, now, things are actually affordable, and most importantly, they’re affordable for the young generation, for the people in their 20s here in Japan. That’s the great entry point that you actually have for Japanese assets in general.
- Not all Japanese stocks are that cheap….”Japan, if you look at it, of the 1,600 companies in the big index the Topic, there’s actually now almost 15% of them are trading at new historic highs”
- That said cash payouts are high in Japan especially once buybacks are included …”I’m gonna stick with DXJ, had a 3.5% dividend yield and a 1.4% net buyback, which, for international markets, you don’t see 1% net buyback”. 5% cash earnings!
ON an entirely different theme, if you are looking for an ultra-leveraged play on gold (and silver), have a think about the Golden Prospect fund run out of CQS. Ticker GPM.L and GPSS.L (the subscription shares). This is a LSE-traded fund, launched 2006, investing in small and mid-cap precious metals miners (c.65% gold, c.20% silver at 30 Sep 2020) and was 2019’s best-performing investment trust amongst the 400+ London-listed funds (price up 77%) and is currently third best-performing year-to-date (price up 78%).
The leveraged play? Well, I would observe the following four-fold leverage….
- It is in gold equities which are already a leveraged play on spot prices
- Its invested more in small to mid-cap stocks which are leveraged plays against large caps
- It has a big weighting in silver
- Last but by no means consider the subscription shares (ticker GPSS.L, last price 8.45p). The last exercise date is 30 Nov 2020. Each subscription share gives the right to buy one new ordinary share at 46.14p, which is 11.8p / 20% below the current market price of 57.9p.
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