market folly

Thanks to a reader in Toronto for sending over the latest from the Sprott camp as they seek to emphasize that markets are 'surviving' on investor sentiment rather than cold hard facts. We like how they chose to end their letter: "Keep it simple, stupid - investing is and has always been about the real economy, and this market is ignoring the hard data. You can invest in sentiment if you want to, but as we have said before, we prefer to invest in real things." The phrase 'real things' obviously has multiple meanings here. First, they mean using the real, raw economic and earnings data as a guideline. But, at the same time, one can't help but note that they most likely want 'real' to mean 'real assets'... as in commodities, and specifically, precious metals. And, even more specifically, gold. Sprott has a big weighting in precious metals as we have previously noticed when we covered their portfolio. Obviously they are skeptical of the market being able to hold itself up on 'hope' and 'green shoots' (and rightly so). Additionally, you can download Sprott's June performance data .pdf here.

Enjoy their commentary below in embeddable .pdf form. RSS & Email readers will have to come to the blog to view it.

Sprott July 2009