Daily Investment Tips

Gold has swung from $328 in 2002 to over $1,400 in 2010. That rise  can be attributed to SPDR Gold Trust.

December issue of Businessweek has an article that shows the rise of gold is solely being driven by demand from ETFs.

SPDR Gold trust was created with the sole purpose of drumming up the price of Gold.

“Our primary mission was to find every button we could push to stimulate demand,” Burton, 59, said in an interview in London.

Who Benefits from the rise in Gold Price?

The Gold miners. In early 2000s the World Gold Council(a group of gold miners) were fed up with the falling price of Gold, previous attempt to stimulate demand of Gold as jewellery had failed. They came up with the idea creating a financial instrument that would drive up the price of Gold. They created SPDR Gold Trust.

The fund, SPDR Gold Trust (pronounced Spider), now holds 1,299 metric tons of gold valued at about $57 billion, more than the Swiss central bank.

Other funds have since emerged. The funds buy the physical gold and sell shares to investors.

The money flowing into these funds is what is driving the Gold frenzy.

written by Constantine Njeru \\ tags: 2000s, Attempt, Burton, Businessweek, Buy Gold, Buy Sell, Control, Financial Instrument, Frenzy, Gold Fund, Gold Jewellery, Gold Miners, Gold Price, Instrumen, Investors, London, Metric Tons, Physical Gold, Price Of Gold, Prom, Sole Purpose, Spider, Trust Fund, Trust Gold, World Gold Council

For hungry investors looking at the rising price of Gold, It feels like the good times will never end.In this frenzy it is easy to forget that whatever goes up will one day come down.

Three Signs Gold is in Bubble State

According to the classic book “Manias, Panics, and Crashes: A History of Financial Crises” by Kindelberger and Aliber, past bubbles have occurred during good economic times when interest rates are low, credit is plentiful and easy to obtain, and national optimism is running high.

One major event that has fueled the Gold frenzy is the massive stimulus programs by governments around the world. As governments try to reduce spending that could be the strike that will burst the Gold bubble. The recent Republican take over of the house could just be the beginning of the end.

written by Constantine Njeru \\ tags: Beginning Of The End, Bubbles, Crashes, Economic Times, Financial Crises, Frenzy, Good Times, Governments, Interest Rates, Investors, Kindelberger, Optimism, Panics, Price Of Gold, Running, Stimulus, Three Signs

Warren Buffet is the current CEO of Berkshire Hathaway. Buffet has led the investment company since inception. At 80, the talk now is who will be Berkshire Hathaway next CEO.

The following are some of the contenders as per internet rumour mills.

1. Charlie Munger

He has been Warren Buffet right hand man for decades. But there is a little problem of his age, at 86 he is a long short to be next CEO.

2. Ajit Jain

He is a Berkshire manager, who runs the National idemnity business.

3. David Sokol

The chief of huge Berkshire subsidiary MidAmerican Energy and recently installed CEO of NetJets, has also been viewed as a top contender.

4. Todd Anthony Combs

On 25 October 2010 Warren Buffet announced 39 Year old Todd Anthony Combs had been hired after a three-year search to “handle a significant portion of Berkshire’s investment portfolio.”. The internet went into a frenzy tipping him as Berkshire Hathaway next CEO.

written by Constantine Njeru \\ tags: Ajit, Berkshire Hathaway, Ceo, Charlie Munger, Contenders, Current, David Sokol, Decades, Frenzy, Inception, Internet Rumour, Investment Company, Investment Portfolio, Led, Netjets, Right Hand Man, Subsidiary, Tipping, Top Contender, Warren Buffet

Commodities are hot! Any investor who has been investing in commodities  in the last decade must be a happy investor. Just look every where, Cocoa, Coffee, Gold, Tin name it. All you see are runaway prices. Prices hitting new highs now and then.

Commodities Future Price Trend Report

According to an article in FT, Four Reasons Why Commodity Prices will Continue to Rise. Some traders even predict higher prices. Arguments in the article are

First, Not all commodities have seen price hikes

Second, Price hike have been caused by tight markets.

Third, Bankers say their clients’ approach to commodity markets is a long way from the buying frenzy that typically characterises bubbles.

Fourth, It is real shortage, eg Drought in Russia, that has caused price hikes

written by Constantine Njeru \\ tags: Asset Allocation Decisions, Barclays Capital, Base Metals, Bubbles, Cocoa Coffee, Commodities Future, Commodities Prices, Commodity Index, Commodity Indices, Commodity Markets, Commodity Prices, Crb Index, Drought, Frenzy, Future Price, Gold Tin, Gsci Index, Investing In Commodities, Investor, Last Decade, New Highs, Norrish, Price Hike, Price Hikes, Price Spikes, Price Trend, Runaway Prices, Russia, Scrap Steel, Thermal Coal, Trend Report

Warren Buffet is the best investor in the world, when measured by ability to accumulate money. His investment advice on the best time to sell you shares can be found on the following quote by him.

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. By Warren Buffet

By greedy he means when the market is in a bull frenzy and every Tom, Dick and Harry is buying stock. When everyone is buying prices tend to go well above their true value and that is when a smart investor should be thinking of selling.

written by Constantine Njeru \\ tags: Attempt, Best Time, Buying Stock, Frenzy, Investment Advice, Money, Quote, Sell Stocks, Smart Investor, Stocks Shares, Tom Dick And Harry, True Value, Warren Buffet