After drifiting for a long period of time, the gold price has risen by 50% in dollar terms since the inauguration, reaching $4000 per ounce today. This tops even the 31% rise, ytd, in bitcoin.
I followed gold mining companies as an analyst during the first decade of my career on Wall Street. I found the firms, large and small, to be very interesting, nuanced and secretive entities. But gold itself I rsee as a special kind of dirt that is used as a medium of exchange in places where people don’t trust the government in general and the banking system in particular. And I’ve kept an eye on the industry since.
I’m not a fan of gold as an investment, particularly outside the areas where it’s a common medium of exchange and where, in consequence, there’s an apparatus for the easy exchange of gold for goods. Nevertheless, central banks have been stockpiling gold this year as a substitute for dollars. And it appears private investors around the world are doing the same–although we haven’t (yet) seen an explosion in popularity of investment vehicles backed by caches of physical gold, as happened in the inflation of the early 1980s.
I regrd this as another, strong, sign that the world no longer considers the US to be that shining city on the hill. For us as investors, though, it seems to me that the gold rise just underlines the continuing attractiveness here of the third-world-investor strategy of finding companies that have costs in the US and revenues outside.
Suggest a method to search for those types of companies
Sorry to take so long to reply. For US-based companies, the SEC requires that all publicly traded companies disclose the geographical breakdown of sales in the 10-k. There may also be useful information in the annual report. Two things to remember: –the annual report is a more or less a marketing document. It does contain the audited financials, but companies have some leeway in the written portion to portray their businesses in the best possible light. So there’ll typically be a lot of potentially useful color, but usually fewer hard facts. –in the 10k, on the other hand, companies are legally bound to make specific disclosures, like the extent of foreign sales, but they tend to say as little as possible. In today’s world, getting more than this is probably a good job for AI.