The Dow Jones index suffered a steep decline last Tuesday. At the end of the week, stock markets closed at about five percent lower than at the start of October (yesterday, stocks have recovered a bit). Gold, in response to this recent stock market decline, rose by more than two percent, to a level exceeding $1,200 dollar per troy ounce. What is going on?
... »Stocks Dropped 5 Percent: What Happened?
October 17 2018
Olav Dirkmaat
An Attempt to Value Gold (Update!)
September 27 2018
Earlier this year, I did a first attempt to value gold. The problem with gold is clear: it is incredibly difficult to value an ounce of gold, because we have no yardstick or underlying value to measure gold against. Better put: we can value a company by estimating the future discounted cash flows that the company is able to generate. Subsequently, we can compare our valuation (the company’s “underlying value”) against the current stock price (the “market value”), with the knowledge
... »Olav Dirkmaat
Dow Jones Index Closed Eighth Day in a Row with a Loss: Here Is What It Means
June 26 2018
Reality is finally dawning on investors: we are on the verge of a global trade war. As a consequence, last week, the Dow Jones Index closed on Thursday for the eighth day in a row with a loss. A rather rare event, since such persistent losing streaks do not occur often. Both in 2008 (during the
... »Olav Dirkmaat
Three Mistakes That Markets Are Currently Making
June 13 2018
Financial markets are currently, according to my judgment, committing three important mistakes. These three mistakes imply that asset prices currently are – again, according to my judgment – also mistaken. Some asset classes are rather expensive, whereas other asset classes seem to offer better opportunities. The three mistakes that I want to highlight this week, are leading to (a) too high stock market prices, (b) too low gold prices, and (c) too high debt levels.
... »Olav Dirkmaat
