Home » Silver

Texas Fund Manager Predicts Gold At $10,000!

3 November 2010 105 views No CommentEmail This Post Email This Post

Shayne McGuire is not crazy, nor is he peddling any merchandise. Instead he runs a $330 million gold fund at the Teachers Retirement System of Texas. In his book, Hard Money: Taking Gold to a Higher Investment Level, he lays out the reasons why he expects gold to soar to $10,000 an ounce, as well as the optimal way to construct a gold portfolio using ETFs, gold and stocks to get the best diversification among the 4 precious metals. He also details how to buy physical gold without getting ripped off, and why rare gold coins are an attractive investment option inaccessible to fund managers. Hard Money is not a book about a financial crash, the end of civilization, or storing up food and a mysterious form of wealth for a long, dark financial winter. Rather, it offers an investment strategy to deal with the reality of present financial conditions, conditions that could lead to a dramatic rise in the price of gold.

According the the WSJ:

With gold prices surging this year, his fund is up about 25% since its inception a year ago. For its fiscal year ended in June, the Texas pension fund was up 15.6% overall. The gold fund has half its assets invested in a gold exchange-traded fund, SPDR Gold Trust, and the rest invested in gold stocks.

Gold’s historic run-up was spurred by uncertainty about currencies, fears of inflation and continued monetary easing by the Federal Reserve. Like dot-com stocks in that bubble, which were difficult to value because many companies generated no earnings, gold is hard to value because it produces no earnings or revenue and costs money to store.

“It doesn’t do anything but cost you charges and stare at you,” billionaire investor Warren Buffett said in a recent interview.

There are other gold bulls, of course, including prominent hedge-fund manager John Paulson, who has predicted gold could go to $4,000 an ounce by as early as 2013.

For his part, Mr. McGuire says gold is no longer only for those who think financial Armageddon is near. He expects gold to soar amid rising inflation, among other things. “The world does not need to end for gold to go hyperbolic,” he says.

In his book, Mr. McGuire reasons that $10,000 gold is possible if enough other pension funds and big investors jump-start buying and move as little as 1% of total global stocks and bonds holdings into the metal. Such a migration into gold would equal enough demand to push prices up tenfold from their current level, he calculates.

Of course, the same argument would be true for nearly every other investment class. Mr. McGuire has confidence in his argument, however, because he believes inflation will return, which typically pushes gold prices higher.

Related Posts
  • University of Maryland Professor Calls for $3,000 Gold With the failure of Italy and the European Union imminent, Dr. Peter Morici, professor of economics at the Richard Smith School of Business at the Univesity of Maryland is calling for gold prices to hit $3,000 per ounce. “With the implosion of Italy,” says the University of Maryland’s Peter Morici,......
  • money-to-burnHyperInflation In The US: Possibility Or Reality? Here's an exceptionally well made video by the National Inflation Association. If you don't believe in hyperinflation (or even if you do) this eye-opening video will entertain and educate you regarding the historical currency devaluation that several other countries have faced and the total break down of economies like Zimbabwe.......
Related Websites
  • The Real Wealth Expert PanelQuestions To Ask Your Financial Planner..... Greetings from the metropolis of Cedar Crest, NM! Today's post comes from a question from a friend of mine.  It is a detour from real estate, but like most of us, we have investments in different types of vehicles....stocks and mutual funds for example.  So...I thought this may be......
  • Sunday Money Madness - Veterans Day Edition It's a little late coming, since Veterans Day is celebrated on November 11th, but I wanted to take a moment and give thanks to all the Veterans out there whose bravery and courage have kept us safe and protected. Frugal | Money Saving Tips: Am I Frugal? How I Balance......
  • property largeResidential Property vs. Shares in a Self Managed Superannuation Fund The process of assessing the optimal mix of assets within a Self Managed Superannuation Fund (“SMSF”) is far more complex than this question alone. The appropriate asset allocation for an individual is dictated by factors such as age, tolerance to risk and objectives and will often be a spread of......
  • cubicalChoosing the Right Types of Investments If you have a regular, traditional type of pension plan, then your employer is responsible for making all of your investment decisions in your place. With most other types of retirement plans that are out there, however, you are the one that is in the driver's seat. Some people believe......
  • It's Easier Becoming an Infopreneur Entrepreneurs thrive during periods of rapid change, and we are living in such a time right now. The good news is that the more rapid the change, the greater the opportunities available to entrepreneurs. The explosion of new technologies make this an unprecedented period in economic history for entrepreneurial opportunities:......
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

Leave your response!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.