Mental exercise

When I was a kid, it was knowledge acquisition that drove me to spend time reading. In Tangkak, Johor, Malaysia, there was nothing to read. But somehow, I acquired enough general knowledge to know more facts than most youths of today with the Internet at their disposal, including the huge knowledge bank in wikipedia. My wife and I played Trivial Pursuit a few years ago against a bunch of young people, and they knew so little of what we know.

I have no need for additional wealth other than to keep my wife in the life she is accustomed to. My margin lending is small and easily serviceable even if the market enters into another GFC. My mental challenge is to beat the big city boys with finance background.

One avenue today is to ponder why so many stockbrokers are recommending blue chips when it is so blatantly obvious where investment money should go to.

Biotechs are extremely difficult to pick because research/development/marketing cost is phenomenally expensive. If you have a good product (like a cancer cure, a common cold/flu cure, heart attack prevention, diabetes cure), you will be rich. But it takes a long time before you can be rich. And mankind expects you to be benevolent. Then if someone else produces something a bit better or your product has an unexpected side-effect, all your expenses are wasted.

But gold? This has been around since biblical time. If AUD is stable, if POG is stable at its high, if you are producing gold and not hedged, if your cost of producing is low, if your tenement is in a stable democracy, then voila! I have yet to see a good set of report on this issue. In the meantime, the stock markets around the world are experiencing a downturn in gold stocks due to market sentiment. For those reading my thoughts, the gold producers are my current El Dorado. I have recently bought SBL and ADU. These are starting to produce and have fallen in share price. Next year, I will know whether I am a foolish buyer or I can say that finance background does not make you money wiser, especially those employed by big broking firms earning bigger incomes than me.