But Ron Paul’s portfolio isn’t merely different. It’s shockingly different.
Yes, about 21% of Rep. Paul’s holdings are in real estate and roughly 14% in cash. But he owns no bonds or bond funds and has only 0.1% in stock funds. Furthermore, the stock funds that Rep. Paul does own are all “short,” or make bets against, U.S. stocks. One is a “double inverse” fund that, on a daily basis, goes up twice as much as its stock benchmark goes down.
The remainder of Rep. Paul’s portfolio – fully 64% of his assets – is entirely in gold and silver mining stocks. He owns no Apple, no ExxonMobil, no Procter & Gamble, no General Electric, no Johnson & Johnson, not even a diversified mutual fund that holds a broad basket of stocks. Rep. Paul doesn’t own stock in any major companies at all except big precious-metals stocks like Barrick Gold, Goldcorp and Newmont Mining.
Rep. Paul also owns 23 other miners – many of them smaller, Canadian-based “juniors” whose stocks are highly risky. Ten of these stocks have total market valuations of less than $500 million, a common definition of a “microcap” stock. Mr. Paul has between $100,010 and $326,000 (roughly 5% of his assets) invested in these tiny, extremely volatile stocks.
Rep. Paul appears to be a strict buy-and-hold investor who rarely trades; he has held many of his mining stocks since at least 2002. But, as gold and silver prices have fallen sharply since September, precious-metals equities have also taken a pounding, with many dropping 20% or more. That exposes the risk in making a big bet on one narrow sector.
At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.
There are many possible doomsday scenarios for the U.S. economy and financial markets, explains Mr. Bernstein, and Rep. Paul’s portfolio protects against only one of them: unexpected inflation accompanied by a collapse in the value of the dollar. If deflation (to name one other possibility) occurs instead, “this portfolio is at great risk” because of its lack of bonds and high exposure to gold.
Running an investment portfolio that protects against only one bad outcome is like living in California and buying homeowner’s insurance that protects only against earthquakes, says Mr. Bernstein. You also want protection against fire and wind and theft and the full range of risks that houses are prone to. Likewise, he adds, investors should hold a broad mix of assets that will hold up under a variety of good and bad scenarios.
oh I just noticed this one ..dated Mar. 6, 2013, 9:14 AM
The Ron Paul Portfolio Has Been Getting Crushed
Former Texas Congressman Ron Paul is known for his full-throated endorsement of gold as money. And he's put his money where his mouth is by investing in a lot of it.
Last year during the presidential election, The Wall Street Journal reported on Paul's financial disclosure.
The Congressman's portfolio was heavily weighted with precious metals. Last year we learned that a shocking 64 percent of Paul's $2.4 to $5.5 million portfolio is tied up in precious metals like gold and silver.
At the time, people were gushing at how smart of a move that was in that market.
But today, gold is getting massacred — it's been said to be in a "death cross," the market rally means prices are sliding, and sellers are getting desperate — and Paul's investments seem to be tanking too.
Via Google Finance, here's what has happened to three of Paul's largest holdings — Barrick Gold, Goldcorp and Newmont Mining — in the past 6 months. Losses of over 20% on each:
Paul has investments in 23 other miners — many of them small Canadian risky "juniors" — so it's doubtful he's doing much better with the rest of the portfolio.
Of course we don't know for sure that he hasn't -- since leaving politics -- taken his money out of gold and put it all in Google. But that seems unlikely.
THEN:__If You Thought Ron Paul's Investments In Big Gold Miners Were Doing Badly, Check Out His Investments In 'Juniors'
Mar. 6, 2013, 10:12 AM
Paul is one of the most famous advocates of gold as an investment, so we took a look at how his 64 percent precious metal portfolio was handling the recent crash in the price of gold.
We took a look at the three major mining stocks that the Wall Street Journal described as the largest of Paul's holdings. Here's what has happened to them in the past six months:
While those were reported as his largest holdings, Paul did report owning shares of a swathe of "junior" mining companies, considered smaller and riskier bets.
We took a look at how those mining companies performed in the past six months. The result is a series of brutal losses:
Agnico Eagle Mines : –20.6% Allied Nevada Gold Corp: –49.03% Alumina Common: +51.28 % Anglo Gold Ashanti Ltd. –29.55% BrigusGold Corp. Com MPV: –23.39% Claude Research Inc: –46.67% Coeur D'Alene Mines Corp: –24.92% Hecla Mining Co: –26.94 El Dorado Gold Corp: Not Listed IAM Gold Corp: –54.54% Kinross: – 17.42% Lexam Explorations Inc: – 29.41% Mag Silver Corp: –17.39% Metalline Mining Co: Not Listed Pan American Silver: –17.55% Silver Wheaton Corp: –15.57% Virginia Mines Inc: +5.15% Vista Gold Corp. –48.32% Viterra Inc +0.62% Wesdome Gold Mines Ltd: –38.21%
Looking at the twenty-one publicly listed mining companies in the Ron Paul portfolio, the average return on investment was a dismal –22.62% over the past six months.
Given that the Wall Street Journal reported that Paul's portfolio was worth between $2.44 million and $5.46 million — and that 64 percent of his assets were in these precious metal stocks — a very loose estimate is that Ron Paul has lost between $353,204 and $790,366 over the past six months, based on the average loss of his mining holdings.
The moral of the story: don't just be in gold related assets.
And remember, it's WORSE today. I don't want anyone to lose money and I know you don't either! ... maybe if he hangs on .. who knows? ... sheesh! if he had just bought S & P efts or anything like that .... he'd be in the 1% now!
AI
