- Hardcover: 352 pages
- Publisher: Wiley; 1 edition (July 8, 2008)
- Language: English
- ISBN-10: 0470724269
- ISBN-13: 978-0470724262
- Product Dimensions: 7 x 1.1 x 9.9 inches
- Shipping Weight: 1.8 pounds (View shipping rates and policies)
- Average Customer Review: 13 customer reviews
- Amazon Best Sellers Rank: #2,061,031 in Books (See Top 100 in Books)
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The Goldwatcher: Demystifying Gold Investing Hardcover – July 8, 2008
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"In these troubled times, the insights could be invaluable."(City A.M. Thursday 26 June 2008)
"Katz & Holmes take over where Peter L. Bernstein's modernclassic The Power of Gold left off… particularly timely."(Spectator Business July 2008)
From the Inside Flap
In this remarkably clear and accessible book, authors John Katz andFrank Holmes explain everything the independent investor needs toknow in order to invest like a professional.
Presented in two parts, Part I demystifies the gold price bytracing its history and placing it in the current context oftwenty-first century economic realities, explaining when to buygold and when gold prices do or don't make sense. As an unbiasedindependent analyst John Katz is neither a gold bull nor a bear -rather, he offers an insightful analysis of gold's role in anevolving global economy. In doing that, he pulls together andsometimes pulls apart the arguments and assessments of leadingcommentators from money management, investment banking, academia,and the financial media.
Part II gives the reader a rare glimpse into the intricateworkings of a leading gold investor. Frank Holmes is one of theworld's most authoritative voices on the yellow metal, and an awardwinning fund manager. By opening a window into his company, U.S.Global Investors, Holmes provides an insider's vantage point toexamine the many opportunities and challenges facing goldinvestors. Some of the nuggets from Holmes include:
- Here comes China - both as a gold consumer and goldproducer
- Watch oil and the dollar to understand gold as aninvestment
- Bullion as a value investment and gold equities as a growthinvestment
- Return on capital as the best yardstick to use when measuring agold-mining stock
- Think of gold as portfolio insurance, not as a way to getrich
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The fact that the book makes a great reference guide is both a blessing and a curse. One normally does not read a reference guide straight through, for instance, and that applies to this book in spades. Some sections are heavy enough going to be useful as a late-night cure for insomnia.
In my opinion the second half of the book is actually better than the first. The first half, "Demystifying the Gold Price," is authored by John Katz. The second half, "Gold Investing Strategies," is authored by Frank Holmes.
Frank Holmes is the CEO and Chief Investment Officer for US Global Investors, a San Antonio, Texas based family of mutual funds. I first met Holmes backstage when we both presented at the New Orleans Investment Conference in 2006. He is very sharp, and it shows in his half of the book.
Holmes starts by going through the details of exactly how his firm gets an edge investing in gold stocks. Early on he gives the opinion that "bullion is for value investors and gold stocks are for growth investors," clearly placing his firm in the growth camp.
In the chapter "Investing in Gold Equities," Holmes lays out the difference between "majors," "intermediates" and "juniors," and lays out the details for investing in each. In the following chapter, "Gold Mining Opportunities and Threats," Holmes digs into the five "key trends" for the gold mining industry: geography, current and future production, exploration spending, industry consolidation, and cost pressures.
Holmes also covers a range of important topics like seasonality, precious metals volatility, and gold stock mutual funds (besides his own of course).
The first part of the book, written by John Katz, offers a much more wide-ranging, top-down type view of the factors driving gold. Katz begins by asking "Why Gold?" and goes on to discuss the yellow metal's role as "stateless money" and a store of value in time of crisis.
Katz also covers the topics of supply and demand, the present state of the gold mining industry, the rise and fall of the gold standard, the economic consequences of 9/11 and the George W. Bush presidency, and more.
Some of the numbers felt a little off for a book published in 2008. To the best of my knowledge they are all correct, though, except for one glaring typo: I nearly fell out of my chair upon reading on page 10 that the Dow "closed above 23,000" at the end of 2007. (No doubt he meant 13,000, a slight difference!)
Katz also makes reference to another excellent book: "The Power of Gold: The History of an Obsession" by Peter Bernstein. "The Power of Gold" is much more of a grand, sweeping historical tale... a wonderful walk through the pages of precious metals history, all the way back to the Lydian Kings of Old.
While Holmes and Katz are clearly not writers by trade, Bernstein most definitely is -- which makes Bernstein's offering far less useful as a reference guide, but far more pleasurable as a general read.
Another difference between the two books is that, while Katz and Holmes are clearly big fans of gold, the late Peter Bernstein is not - or at least he wasn't at the time "The Power of Gold" was first published back in 2001. At the end of Bernstein's book, spanning all the ages in which gold and silver have functioned as money, Bernstein finishes by noting that "the most striking feature of this long history is that gold led most of the protagonists of the drama into the ditch."
But "Bernstein changed tack," John Katz reports, after the events of September 11th 2001. A few years later, in 2005, Bernstein went on record in support of gold as a hedge against hyperinflation. (Something that is very much on investors' minds in mid-2009.)
So, really, there are two great books to consider here.
If you want a detailed reference guide with all the possible angles one could think of on investing in gold and gold stocks, complete with hundreds of charts and data points, then "The GoldWatcher" could be a great buy.
If, on the other hand, you're more interested in the fascinating tale of gold as money, stretched out over the great arc of history from ancient times to the turn of the new millennium, then Bernstein's "Power of Gold" might be a better choice for you.
THE INFORMATION IS ALSO NOT NECESSARY FOR ANYONE FOLLOWING THE PRECIOUS METALS MARKET.
Gold is no ones liability and if the amount of Gold was measured against the amount of paper currency, credit and debt in the world Gold would be far higher then it is now. Gold isnt the bubble, debt and paper money is since governments can't print Gold as hedgefund gurus Kyle Bass and Ben Davies would say. Dont listen to the media but learn about the facts and this book has many and a blog too.