Got Gold and PPI Hot Markets Not

We had to give John Paulson some credit for his recent interview, in fact this quote pretty much sums up the mantra that the “American Dream” exhibits and one which has some how gotten lost in today’s world,

“The traditional American values are based on thrift, hard work, savings, and re-investment. That’s what leads to success.” -John Paulson

A link to his interview where he talks about the value of holding gold and why in the future he believes this is the proper thing to do. One point we read and we didn’t take it to much in account but when he was asked about cryptocurrencies he felt that it is a product of the Federal Reserve money printing and that’s what caused its meteoric rise and now with liquidity being reduced he feels this is why the complex has been hurt. We like that he mentioned the supply as a good feature of the complex and we also like that he did not mention Bitcoin specifically…we probably know why. (He probably owns some)…

Anyway here is the link to the interview, John Paulson Interview

With Gold in mind, we wanted to share this chart, where we compare the annualized return of Gold vs the SP500. We love data, we love structuring it in ways that we believe many can then understand what narrative we are trying to convey. In this case we present the rationale for not only owning Gold, but in fact on a volatility and drawdown basis, it might even be better than owning the SP500. This data does include the “Dividends Return” as well, because I know some dopes will say…yeah but what about the dividends! Well we added them so that base is covered:

Well in reality, since 1999 The SP500 has had multiple double digit drawdowns and two -37%+ years, while that old relic Gold, on an annualized basis since 1999 has outperformed the SP500 by 1.16%.