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January 28, 2015 at 05:30 AM
Investors are ever seeking to discover what the smart money thinks, but typically obtain the information from legally mandated portfolio holding disclosures that are out of date.
Financial advisors at ETF.com’s Inside ETFs conference got some of that info in real time Wednesday morning in a well-attended morning session mistakenly titled “The Great Fed Debate.”
The two panelists, Dennis Gartman and Mark Yusko, could not have been more cordial, and disagreement was nary to be heard.
But because the dynamic duo were brimming with investment insights, the session did have the feel of listening in on the thoughts of particularly astute investors.
Readers can form their own judgments as to whether their ideas are of value. Even smart people make poor portfolio decisions. But few would question the two men’s intellect. Subscribers pay handsomely for Dennis Gartman’s Gartman Letter, whose alpha-seeking author runs his own money and manages some AdvisorShares currency funds. And followers of Mark Yusko’s tactical strategy are apt to pay up for his AdvisorShares Morgan Creek Global Tactical ETF (GTAA).
Herewith, some of the issues the two men discussed, and generally agreed on:
The Dollar
Yusko called the greenback “the most important decision that anyone has to make.”
The key data point, as Gartman put it, is that “we’re just in the third inning of a nine-inning game on the strength of the dollar.”
While the stock market took a huge beating Tuesday as corporate profits fell, largely on the greenback’s strength, the two investors were unbowed by the might of the dollar.
“Strong currencies make manufacturers more efficient,” Gartman said, pointing to the experience of Japan in the 1980s.
What’s more, he added, corporate treasurers from around the world will be keeping the vast majority of their funds in dollars.
Yusko, for his part, said he is 100% sure the yen and euro are going down, concurring with Gartman that “we’re just the least bad of developed country markets, which are in a race to debase.”
Gold
In an environment of currency debasement, the investors like gold. But the smart money says there’s a smarter way to buy it: buy yen-denominated or euro-denominated gold rather than the typically dollar-denominated commodity.
“You want to be long gold and short the currency that will fall,” said Yusko, puting in a plug for his interlocutors, Gartman Gold/Yen ETF (GYEN) and Gartman Gold/Euro ETF (GEUR).
“The yen will be lower the rest of your life,” Yusko said, predicting it wil be at 140 to the dollar by the end of the year.
