WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Let's get physical! University of Texas endowment takes delivery of $1 billion in gold bullion

The nation's second-biggest academic endowment fund just took physical delivery of $1 billion dollars worth of gold. That's 5% of the value of the fund.

And they don't trust the ETFs or COMEX futures.

If major institutions like this are starting to wake up to precious metals as an investment class, watch out! As we've pointed out before, there ain't that much gold to go around. Not everybody can get to a 5% weight in gold without gold being at multiples of its current price. Do you have your 5% yet?

8 comments:

Anonymous said...

Although I have gold and am hedged against the coming currency crisis, I do not look at academia entering the market as favorable. Investment returns of all the big educational institutional endowments have been dismal. They have an uncanny ability to enter at the top. The average University is 10-15 years behind in their educational offerings. The same has held for their investment picks. Lets hope UT is an exception.

wcv said...

Fair point but apparently these guys are pretty smart and have had gold for a while. They're just taking delivery of the physical now.

Anonymous said...

i'm not too sure we need to look on this as 'academia coming late to the party'. the interwebs seem to indicate kyle bass was the impetus behind this move - and based on his track record, he doesn't spend a whole lot of time being behind the curve.

the miracle is the educrat mafia - yes, even at once-great UT - actually *listened* to a capitalist imperialist. guess they plotted out their dwindling retirements, and then had the classic liberal epiphany: "we can make money on this, so the heck with our beloved principles! this is too important!"

Anonymous said...

Well, perhaps I am wrong, and academia entering gold at this time is a good thing. I was a university finance and accounting professor for many years. If they are doing something right this time, at least in my experience, it will be a first. Even a broken clock is right twice a day lol. I would rather not see this type of mainstream news. Maybe I'll be eating crow for Thanksgiving, but I'm not plucking the feathers yet.

Anonymous said...

when taxi drivers and waitresses are telling you about a can't lose investment proposition...

W.C. Varones said...

Anon 1:48,

If that were true, I'd be concerned. I haven't had a single taxi driver or waitress mention gold to me.

The last taxi driver I had told me about how he used to own a construction company and make a ton of money. Now he's barely scraping by.

Taxi drivers and waitresses are struggling. They don't have the money to buy gold.

And those people who do have money still don't own gold much.

How many people do you know who have converted an old 401k to gold? Probably zero. How many people do you know who have more than 5% of their net worth in gold? Probably very, very few.

Most middle class folks I know still take their brokers' advice and stick to stocks and bonds.

Anonymous said...

a few years back, i read that the way to tell a bubble had crested & was on its way down was if it made the cover of 'Time'. i don't think we're anywhere near that yet. yeah, gold and silver is the talk of the financial blogosphere. but as varones points out above, most folks - like about 99% or so - don't read financial blogs "'cuz they're like, totally boring" and would rather think about american idol or rasslin' or NFL FOOTBALL, babeee!!!!!!!!!

i remember well the gold/silver frenzy of 1980. we're nowhere near close to that yet.

look around you at the next restaurant/movie theater/airport you walk into. look at the people. no, they're not idiots or morons, they're just regular folks. but ask yourself: are they gonna use the web to read dry, dire predictions of currency degradation in their few spare moments on the web? or are they gonna check out porn, or new recipes, or update their facebook status?

Anonymous said...

"I do not look at academia entering the market as favorable. Investment returns of all the big educational institutional endowments have been dismal."

Alas, when the Universities, educators and eggheads are buying, it's time to be selling to them.

Wait for them to start saying it is over for gold and silver, that will be the turning point to new highs.

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