market folly

Next up in our notes from Invest For Kids Chicago is James Grant of Grant's Interest Rate Observer.

•    Grant founded his firm is 1983 and called Japanese bubble and housing bubbles
•    Tongue in cheek legal disclaimer is that “Congress shall make no law abridging the freedom of the press”


Grant's First Idea: Metropolitan Life

•    Metropolitan Life
o    Japanese life insurers died out in long run.
o    825 billion of assets - a great franchise
o    Long due to potential for dividend.


Grant's Second Idea: Gold

•    Gold: is a “legacy monetary asset”
•    1920 there was a depression (not Great Depression). 18 months after peak then industrial production jumped significantly
•    "I'm a professional interest rate observer.  There are none"
•    Grant notes interest rates move in generational cycles

Grant is obviously not alone in his fondness for the precious metal as numerous hedge funds own gold for a myriad of reasons.  Some own it as a hedge against inflation or currency debasement, while others view it as an uncertainty hedge.


For the rest of the hedge fund presentations from the event, head to notes from Invest For Kids Chicago.