Posts Tagged ‘Jim Edgar’

What Glitters Isn’t Always Gold

Wednesday, December 30th, 2009

Gold fever seems to be on the decline as the precious metal fell $90 an ounce in just two days after the commodity reached a high of $1,226 an ounce in early December.  The lion’s share of the blame for the decline was placed on newbie investors, who got skittish in their belief that gold is an investment safety net.  Gold isn’t down and out yet.  According to Goldman Sachs’ precious metals group, if the Federal Reserve keeps interest rates at current low levels, the price of an ounce could climb as high as $1,350 next year.Newbie investors shaking up the price of gold

Dennis Gartman, a trader and publisher of the Gartman Letter investment newsletter, said “Too many naïve investors got involved in gold.  They must be taken out and given a good caning.”  Professional investors are likely to stay away from gold for a while, a move that will “inflict pain on the people who came late to the market” in coming months.

A somewhat different viewpoint is offered by Jim Paulsen, chief investment strategist with Wells Capital Management, who believes that the tumult makes it unclear why gold prices are acting erratically.  “Gold has been the answer to inflation; gold has been the answer to disinflation; gold has been the answer to too much debt and to the China bubble.  But I have never known an asset that was the answer to everything,” Paulsen said.  He believes that gold is currently overpriced and vulnerable to fluctuations.

Ibbotson Associates notes that someone who invested in gold in 1980 would have seen an average annual yield of 2.6 percent.  As attractive as gold looks now, compare that with stocks which averaged an 11.2 percent return despite last year’s slump.

Foreign Investors Like Luxury

Friday, October 24th, 2008

Volatile oil prices will minimally impact global air-freight growth over the long term, according to a Boeing Company report cited in a recent article.  The Chicago-based aircraft manufacturing giant’s Current Market Outlook 2008 predicts that growth will achieve an annualized average rate of 5.8 percent from 2007 through 2027.  Similarly, the report projects that the world freighter fleet will nearly double from 1,948 planes today to 3,892 over the next 20 years.

“The forecast is based on a number of factors, most significantly economic growth in diverse areas of the world,” said Jim Edgar, Boeing’s regional director, cargo marketing for Asia.  “Over the long term, global economic growth will drive demand for new, high-value products as well as seasonal perishables that people have become accustomed to enjoying.”

The report notes that the nature of the air-freighter fleet will change as larger aircraft increase their market share.  Currently, the largest freighters make up 26 percent of the market; in 20 years, that number will rise to 35 percent.  Fleet additions will include 863 new-production aircraft; 641 of those will be wide-body planes with the capacity to carry more than 80 tons.  The share of standard-body freighters (defined as having less than a 45-ton capacity with single-aisle body width) will fall from 39 percent to 35 percent over the next 20 years.

“We expect several trends to continue,” according to Edgar.  “Dedicated freighters will continue to provide an increasing proportion of air-cargo capacity, going to nearly 54 percent, and the industry will continue to move to larger airplanes.”