Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Economist’s valuables index, which tracks coins, stamps and violins, is up 54% since the first quarter of 2009, close to gold’s gain of 60.2% right after the financial crisis.
The admittedly illiquid and often subjective index is weighted according to the types of assets a rich individual would typical hold.
Out of the seven luxury items tracked, classic cars were up the most, up 53% since July 2011.
Gold started 2009 at US$853 per ounce. It is now trading just under $1,400 per ounce.
Luxury items are a tricky asset class. Art can fall out of favour. Carrying costs are higher. There is storage, insurance and high transaction fees.
However, an old Les Paul guitar or a vintage Lamborghini can be a lot more fun to own than a stock certificate.
Image by John Nuttall
