Two things we usually don't do on Behind the Idea are talk about big picture macro-economic ideas, and delve into asset classes outside of stocks. We've focused on individual investing ideas through the vast majority of our episodes over the last 18 months, and that's where we've made our bones.
But Mike Taylor rejoins the podcast this week after paternity leave (congrats Mike!) and he's jazzed up about Ray Dalio's recent argument that a paradigm shift is coming. So jazzed up that he invested in GLD, GDX, and GDXJ itself, based on Dalio's article.
Gold leads to a lot of psychological analysis and self-consideration, and to considering the philosophical basis for an investing strategy. Without spoiling it, I have the more skeptical, 'what is behind the results that gold has achieved it in the past' orientation, while Mike has the more instrumental, 'gold has proven to be a ballast to many a portfolio, so why not' approach.
Topics covered: 2:30 minute mark - Introduction to Ray Dalio and his recent article
5:45 - What stands out in the argument
11:30 - Whether these shifts can really explain the market's direction over the decades
16:30 - The trade-off between higher pricing and lower future returns
26:30 - Discussion of "gold bugs" and the historical reasons for owning gold.
31:30 - What makes gold the way it is?
37:30 - The difference between owning gold and indexing (or is there one?)
50:30 - Why will this time not be different?
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