Gold News

Gold: Anti-Dollar Cash

Nils Taube, a professional investor with 50 years experience, is Buying Gold as an anti-Dollar cash position...

Nils Taube, the London fund manager, for more than 50 years now.

   He has a unique long-term track record, starting since I first met him as a young partner in Kitcat & Aitken, a firm of London stockbrokers, before the wave of "Big Bang" deregulation in the mid-1980s. We were both members of one of Jacob Rothschild's boards at the time.

Last April, Nils, who is now in his late 70s, set up a new open-ended investment company. S&W's Taube Global Fund currently has £40 million under management. The Financial Times devoted most of Ellen Kelleher's Fund Focus column of October 24th to the current policy of the Taube Global Fund.

This is an opportunity to study the current strategy of an outstanding investor.

Nils Taube has always been particularly good at making money in difficult periods. He has a temperament which could be described as one of realistic optimism; he has never been a "gloom and doom" investor. This makes it more significant that he has structured Taube Global so that the fund is strongly defensive.

At present, almost 15% of the fund is in cash. After the fall of the US subprime lending market, it is heavily weighted in gold, with about 8% of the fund in Gold Bullion Investment and 12% in gold shares. The FT quotes Nils Taube as saying "we regard gold as an anti-Dollar cash position" – and the Gold Price continues to move higher as the US Dollar continues to fall.

There is also an exposure to Japan and to energy stocks, including BP and Shell and United Tar Sands, the Canadian tar sands group. In all, just over 30% of the fund is invested in energy stocks, including oil and gas.

Nils Taube is at present suspicious of investment in banking and financial companies. He sets a high standard of liquidity for his investments so that he can trade in and out of them quickly. He is avoiding the shares of companies which rely on credit, "no matter how sound these investments may appear on paper."

Obviously, this balance of the portfolio shows that Mr. Taube has, once again, got major trends right. He will not have lost money in financial shares. He will have benefited from the rise in oil and gas prices, as well as the rising Gold Price.

What I find significant, however, having known his investment response to the varying markets of over half a century, is that he still feels so cautious. If he is right now, then the oil price is likely to remain high, and may go much higher; the Gold Market is in a long-term bullish trend, yet the credit market will remain volatile and uneasy.

Nils Taube was getting his major calls right in the very difficult and inflationary decade of the 1970s. I suspect that he is getting his calls right again now.

Leading political editor William Rees-Mogg (1928-2012) was former editor-in-chief for The Times of London and an independent peer in the House of Lords in Westminster.

Credited with accurately forecasting glasnost and the fall of the Berlin Wall, as well as the 1987 financial crash, Lord Rees-Mogg wrote political commentary in The Times of London each week until his death.

See the full archive of William Rees-Mogg articles.

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