The WSJ is aghast, AGHAST! that Ron Paul's personal portfolio holds no bonds or bond funds, and no Apple, ExxonMobil, Procter & Gamble, Johnson & Johnson, or GE.
The WSJ analyst calls Paul's portfolio with 64% of his assets in "tiny, extremely volatile" gold and silver mining stocks 'the most extreme bet on economic catastrophe' he has ever seen, and 'a half-step away from a cellar-full of canned goods and nine-millimeter rounds'.
Personally, a $5 million + portfolio in paper looks rather risky if anything in the wake of the MF Global segregated funds theft.
Makes you wish you could see the look on the face of the WSJ analyst if he saw The Doc's portfolio of PHYZZ...
Here at Total Return, we’ve looked at hundreds of the annual financial-disclosure forms in which the members of Congress reveal their assets and trades – and we’ve never seen a more unorthodox portfolio than Ron Paul’s.
According to data available through his 2010 “Form A” financial disclosure statement, filed last May, Rep. Paul’s portfolio is valued between $2.44 million and $5.46 million.
Yes, about 21% of Rep. Paul’s holdings are in real estate and roughly 14% in cash. But he owns no bonds or bond funds and has only 0.1% in stock funds. Furthermore, the stock funds that Rep. Paul does own are all “short,” or make bets against, U.S. stocks. One is a “double inverse” fund that, on a daily basis, goes up twice as much as its stock benchmark goes down.
The remainder of Rep. Paul’s portfolio – fully 64% of his assets – is entirely in gold and silver mining stocks. He owns no Apple, no ExxonMobil, no Procter & Gamble, no General Electric, no Johnson & Johnson, not even a diversified mutual fund that holds a broad basket of stocks. Rep. Paul doesn’t own stock in any major companies at all except big precious-metals stocks like Barrick Gold, Goldcorp and Newmont Mining.
Rep. Paul also owns 23 other miners – many of them smaller, Canadian-based “juniors” whose stocks are highly risky. Ten of these stocks have total market valuations of less than $500 million, a common definition of a “microcap” stock. Mr. Paul has between $100,010 and $326,000 (roughly 5% of his assets) invested in these tiny, extremely volatile stocks.
Rep. Paul appears to be a strict buy-and-hold investor who rarely trades; he has held many of his mining stocks since at least 2002. But, as gold and silver prices have fallen sharply since September, precious-metals equities have also taken a pounding, with many dropping 20% or more. (Sorry to interrupt your nice article, but what are Mr. Paul's gains since he initiated his long term mining positions in 2002? +800%? + 1500%? You don't think that would be relevant information? Just that they are down 20% over the past few months? Ok, thank you, please proceed) That exposes the risk in making a big bet on one narrow sector.
At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.