At the start of 2016, on January 6, the respected Swiss bank UBS said “sell stocks” and “buy gold.” They warned that stocks could go down 20% to 30% this year. Investors would have been very wise to heed that warning at that time, but most investors tend to procrastinate. Many are belatedly getting into gold, but unfortunately they waited until gold gained $200 in six weeks (from $1062 to $1261) before jumping on board. They may have bought just in time to suffer a normal correction, but that’s par for the course!
On February 11, CNBC interviewed Dallas Mavericks owner and legendary investor Mark Cuban, who said that he had done what UBS recommended – he sold stocks and bought gold. When asked why, he said “People are so confused about this market. Nobody really understands what’s happening, including me. Things I thought made sense didn’t make sense and weren’t working. I just asked myself, ‘Where were momentum players going to look next?’ Gold had started to pick up. So I think when traders don’t know what to do, they go where everybody is and I thought there was a good chance that would be gold.”
On the same day, Barron’s reported that global gold ETF holdings had increased by 3.86 million ounces (about 120 metric tons) so far in 2016. About two-thirds of this increase came from the SPDR Gold Shares (GLD), which had taken in $2 billion so far in 2016, essentially replacing the $2.2 billion in net gold sales in the SPDR gold ETF in 2015. The ETF phenomenon is also spreading overseas. So far this year, investors have placed $720 million into ETF Securities, a British gold-based fund. Tuesday, February 9, ETF Securities recorded its highest ever one-day net inflow of $345 million.
Right before Phil Mickelson’s all-important 18th hole put hit the side of the cup and lipped out, CBS told the moving story of how Phil’s grandfather, Al Santos, caddied Pebble Beach when it opened in 1919. Young Santos dropped out of school in the fourth grade to caddy at age 11. He got up early to caddy 36 holes, earning just 35-cents per bag per 18 holes. It was a great day when he got a silver dime for a tip.
Al Santos kept a “lucky” 1900 silver dollar in his pocket. Although he often went hungry, he never spent that dollar. He said he rubbed the coin whenever he felt poor, gaining the comfort that he had money in his pocket. He died in early 2004, right before grandson Phil won the first of his four majors. Throughout his long career, including 42 PGA victories, the 45-year-old Mickelson has carried his grandfather’s lucky 1900 Morgan Silver dollar as his marker. It doesn’t guarantee every put will drop, but most of them do!
Last month, Mickelson said, “it’s a cool feeling to have the money that he cherished and also to see what we are now playing for in prize money, and how far the game of golf has come. It’s a great reminder for me.” Mickelson also said that his grandfather gave him an old Krugerrand that he keeps, along with some silver half-dollars, but “his silver dollar is the one I prefer to mark with,” especially at Pebble Beach.
If you would like to own a circulated Morgan Silver dollar as a golf marker, call a reputable coin dealer. We can’t guarantee you will putt as well as Phil Mickelson but you’ll have a great conversation piece for your fellow golfers.