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Frank Trotter on Wealth Disparity, and More Top Quotes from a San Francisco Investment Show

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Frank Trotter on Wealth Disparity - and More Top Quotes from a San Francisco Investment Show

Frank Trotter on Wealth Disparity – and More Top Quotes from a San Francisco Investment Show

Weeks ago we were delighted to attend an investment conference in San Francisco called The Silver Summit & Resource Expo.

Speakers included well-known voices in the investment community such as Grant Williams, Frank Holmes, Frank Trotter, and Rick Rule. The show was also supplemented with people that have helped to build multi-billion companies: precious metals pioneers such as Ross Beaty, Rob McEwen, and Keith Neumeyer, or mine-finders such as David Lowell.

After attending the show, we reached out to some of the speakers that had piqued our interest. We asked them to send us a key talking point along with the data to back it up.

Jeffrey Christian, from CPM Group, supplied us with a quote and data on the silver market. In his analysis, he’s found the price of silver is highly related to the net additions and net withdrawals in the silver market. When investors buy silver, the price rallies. When net inventories are dropping, the opposite happens. He noted, “If investors want to buy 100 million oz per year, as they are in 2015, prices will decline from current levels. If they want to buy 150 million oz or more, as they did a few years ago, prices will rise back to $20-25/oz.”

Frank Holmes of U.S. Global Investors, in his note to our team, focused on the depreciating currencies of economies that heavily rely on commodity exports. After showing how these national currencies have fared against the U.S. dollar, he added that it is important to see some stabilization in these currencies before investors can expect to see any bounceback in resource demand.

Frank Trotter of EverBank showed us a chart on less-examined effects of the Fed’s policies since the Financial Crisis affecting wealth disparity. Specifically, he is looking at total household financial assets – in other words, who is holding the wealth in the United States. Frank writes, “The Fed policy has created an asset owners bonanza. From 2008 to 2014, Total Household Financial Assets have grown $19.5 trillion; our estimate is that $15 trillion, or 80% is enjoyed by the top 8% of households.”

This last point brought up by Trotter is something that we’ve talked about regularly. Specifically, in this chart of the week we showed that the top 10% of earners are the only group that has fully recovered since pre-crisis levels of income, and that the amount of Americans below the poverty line has increased by 9.4 million since 2007. The Philadelphia Fed, for example, has admitted that these policies have likely contributed to income equality, but this information is still not talked about enough by the public.

The next two Cambridge Shows are in mid-January: Vancouver Resource Investment Conference 2016 (Jan 24-25, 2016) and the Cantech Investment Conference in Toronto (Jan 26, 2016).

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Markets

40 Stock Market Terms That Every Beginner Should Know

Getting a grasp on the market can be a daunting task for new investors, but this infographic is an easy first step to help in understanding stock market terms.

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40 Stock Market Terms That Every Beginner Should Know

Understanding the stock market can be a daunting task for any new investor.

Not only are there many concepts and technical terms to decipher, but nearly everybody will try to give you conflicting pieces of advice.

For example, if a stock in your portfolio falls in price, should you be accumulating additional shares at a lower price or should you be strategically cutting your losses?

Some experts will tell you one thing, while others will tell you precisely the opposite.

A Place to Start: Terminology

Before you drift into the many debates that the investing pundits are weighing in on, perhaps the most proactive step for a beginner is to simply learn to talk the same language as the pros.

Today’s infographic comes to us from StocksToTrade.com, and it covers the most important stock market terms that every new investor should know and understand. It’s enough to get any beginner on the same playing field, so they can start toying with the more nuanced or complex concepts in the investing universe.

While we don’t agree with the exact definitions of all of the terms, the list is adequate enough to get any new investor off the ground. It covers basic order terms like “bid”, “ask”, and “volume”, but it also goes into concepts like “authorized shares”, “secondary offerings”, “yield”, and a security’s “moving average”.

What’s Next?

Already got a handle on 40 of the most important stock market terms?

Visual Capitalist has a ton of other powerful visual resources for new investors, or anyone else hungry to learn about how markets work:

Crush the above resources, and you’ll be market savvy in no time!

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Gold

A Brief History of Jewelry Through the Ages

Jewelry has been coveted for centuries by many different cultures. Here’s a look at the history of jewelry, and how it’s evolved into a $348B industry.

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Jewelry has been an integral aspect of human civilization for centuries, but it was the discovery and subsequent spread of precious metals and gemstones which really changed the game.

In today’s infographic from Menē, we visualize how the uses and symbolism of jewelry have evolved across time and space to become the industry we’re familiar with today.

Antique, Yet Ageless

There isn’t a single corner of the world that’s untouched by the influence of jewelry.

  • Ancient Egypt
    Gold accompanied the affluent into the afterlife – the famous 1922 discovery of King Tutankhamun’s tomb was filled to the brim with gold jewelry.
  • Ancient Greece and Rome
    Jewelry was used practically, and as a protection against evil. The gold olive wreath design was highly popular during this time.
  • Mesopotamia
    Both men and women in the Sumer civilization wore intricate pieces of jewelry, incorporating bright gems like agate, jasper, or lapis lazuli.
  • Meso-America
    The aristocracy in Aztec culture wore gold jewelry with gemstones to demonstrate their rank. The jewelry also doubled up as godly sacrifices.
  • Ancient India
    The Mughal Empire introduced the combination of gemstones with gold and silver. Today, pure gold jewelry is often gifted to new brides for financial security.
  • Ancient China
    Both rich and poor wore jade jewelry for its durable and protective properties. Pure gold jewelry is making a fashion comeback, doubling as a form of investment.

Modern Jewelry: At a Crossroads

Today, jewelry is at once the very same and vastly different from what it used to be.

The industry is worth upwards of $348 billion per year, and it’s not hard to see why. As an alternative asset, jewelry has grown 138% in value over the last decade – only outperformed by classic cars, rare coins, and fine wine.

However, perceptions of jewelry vastly differ. It’s not a stretch to say that Western jewelry buyers are enamored with diamonds, given their enduring association with special occasions – but it’s interesting to note how that ideal was fabricated.

The Invention of Diamonds

The De Beers Group is well known for making diamonds great again. In the early 1900s, the company had already monopolized the diamond trade and stabilized the market, but they faced the challenge of marketing diamonds to consumers at all income levels.

The average American considered diamonds an extravagance, preferring to spend money on cars and appliances instead. The concept of engagement rings existed, but weren’t widely adopted. The #1 slogan of the century – “A Diamond is Forever” – transformed all that.

Even as more companies like Tiffany and Co and Cartier entered the playing field, De Beers had set a successful industry standard. But there’s a catch – diamonds are actually:

  • Not all that rare in nature
  • Intrinsically low in value
  • Easily replicated in a lab
  • Decreasing in sales

Despite these caveats, the popularity of diamonds illustrate how Western consumers do not approach jewelry in the same way as Eastern economies, where its function as a store of wealth persists.

The Eastern Gold Standard

In Eastern economies, jewelry often takes the form of pure gold. The reasons behind this difference are surprisingly pragmatic: gold is considered a secure and innate store of wealth that maintains its purchasing value over decades, allowing families to pass wealth from generation to generation.

The rich history of the precious metal has made it a sought-after commodity for centuries, and China and India drive more than half of global gold jewelry demand every year:

YearShare of Demand (India + China)Total Global Jewelry Demand (tonnes)
201457%2510 tonnes
201558%2426 tonnes
201655%2068 tonnes
201757%2201 tonnes
201858%2200 tonnes

Source: Gold Hub – Values have been rounded up to the nearest tonne.

Why are Eastern cultures so attracted to the properties of pure gold?

Part 2 of this series will show why gold is the world’s most incredible metal, and why it’s coveted by billions of people.

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