Real Wealth Society

Sunday, March 02, 2008

Shayne McGuire: The Early Innings of a Gold Boom by John Rubino


My new friend Shayne McGuire is director of global research at Texas’ $115 billion Teacher Retirement System, which means he oversees a vast portfolio of high-grade bonds, Blue Chip stocks, and cash. Not the kind of environment that’s usually hospitable to atavistic assets like gold. Yet he recently published a book—a very good book—titled “Buy Gold Now”, in which he explains his belief that the dollar, U.S. bonds and many stocks are headed south, while gold is going to the moon. Here he is on why this will happen and how best to play it:

DollarCollapse: You're a rarity: A mainstream money manager recommending gold, an asset that usually does well when bonds, your pension fund's mainstay, do badly. Why?

Shayne McGuire:
On the surface, gold makes sense in today’s environment. Gold does well when both bonds and stocks are doing badly, when there is insufficient compensation for the risks inherent in owning either asset class. In the 1970s, gold did very well in part because the stock and bond arenas were mine fields. Investors found that pulling money out of financial assets made sense. Simple as it sounds, the concern was with staying away from things that were going down, and this collective concern pushed gold up as more investors bought it, as is occurring today.



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