- The Idea Farm
- Posts
- Go for Gold 🥇
Go for Gold 🥇
+ Bridgwater, Research Affiliates, Apollo, Vanguard, UBS, WisdomTree & More
The Idea Farm
May 04, 2025
“Activity is the enemy of investment returns.”
Research
Kathryn Kaminski analyzes past drawdowns in the S&P 500 and highlights that trend following tends to struggle at the onset of new trends and it tends to thrive in their extension. She says the key question going forward is whether this current crisis is going to extend or whether this is simply a short and sharp reversal that will correct quickly.
As of April 7, 2025.
Research Affiliates - Gold $5,000? (11 pages)
Professor Campbell Harvey says gold’s recent price surge is largely driven by current economic uncertainty as well as a wave of new investment sources, including gold ETFs and China’s de-dollarization efforts. He says contrary to common belief, gold’s high volatility makes it an unreliable short-term inflation hedge, and its current high price levels and historical patterns suggest that future returns may be limited.
Sources: Research Affiliates and Bloomberg. Performance shown is simulated. Note: S&P 500 represented by continuous full-sized S&P 500 futures contract (SP1 Comdty) switching to the more liquid S&P 500 E-mini futures (ES1 Index) 9/1997. Puts by the inverse of the CBOE S&P 500 PutWrite Index. Bonds by 10-Year U.S. Treasury Futures (TY1 Comdty), and Gold by Generic 1st Gold Futures (GC1 Comdty). The figures reflect local market peaks to troughs. Tariffs run to a local trough on 4/8/2025. Dates follow Harvey et al. (2019).
Bridgewater covers the policy shift towards energy security over climate leadership, which they argue will steer investment towards the most economical energy sources.
zSource: Bridgewater. As of March 19, 2025.
Bonus Content
Apollo shared a chartbook on how companies and consumers are responding to tariffs. Link
A key factor in determining a university’s resilience to Federal funding cuts is the liquidity of its endowment. Link
What exactly is US exceptionalism and is it ending? UBS explains. Link
Vanguard expects active fund managers to fare much better if the concentration of the U.S. stock market continues to decline. Link
Sources: Vanguard and FactSet. Notes: Overall period shown is from December 31, 1990, through December 31, 2024. Impacts shown are as of the end of each calendar year. Weights shown are as of the beginning of each calendar year.
Podcasts
 4/18/2025 - 75 minutes | The WisdomTree group highlights bullish sentiment on non-U.S. markets, especially Japan, Mexico, and India, and debates long-term investment themes, including the resilience of AI and tech despite tariff concerns, the resurgence of gold, and more. |
 3/24/2025 - 74 minutes | Ed Grefenstette walks through The Dietrich Foundation’s approach to illiquid investments, with 90% of assets invested in venture capital and private equity, and its thematic focus on innovation and emerging markets. |
What Else Is Happening
Meb Faber looked back at the most memorable investments from Jeremy Grantham, John Arnold & Sam Zell. Apple | Spotify | YouTube
Did you miss last week’s email?
Deal of the Week
YCharts is a web based financial research and analysis platform for asset managers and advisors. Click here to receive 20% off of YCharts Professional (new users only).*