An exclusive interview with Tocqueville Fund’s long-time portfolio manager Robert Kleinschmidt. The contrarian value investor explains why commodities are key to the market and what they are telling him now.
Tocqueville Fund’s Robert Kleinschmidt: Exclusive Strategy
Listen to the audio only version here:
U.S. bears are coming out of hibernation. Despite the fact that the U.S. economy is still chugging along, “slow but solid”, as exclusive WEALTHTRACK guest Ed Hyman described it a few weeks ago, the markets are showing increasing signs of stress.
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
According to this week’s guest, the signals have been there for months. Contrarian value investor Robert Kleinschmidt has been tracking what he considered to be an unsustainable divergence between the global decline in commodity prices, which signal economic slowdown and world stock market behavior.
Kleinschmidt notes that in the U.S., the majority of stocks in the S&P 500 are already in a bear market, having declined more than 20% from their recent highs.
Were it not for large market cap stocks like McDonalds, AT&T and Google parent, Alphabet, Inc. the damage in the index itself would be far greater.
It already is in many overseas markets. According to a recent count by Bank of America Merrill Lynch, at least 33 out of 45 major country stock indexes are in bear territory.
These conditions mean more opportunity for this week’s exclusive guest.
Robert Kleinschmidt is the President, CEO and Chief Investment Officer of Tocqueville Asset Management, a value oriented wealth management firm devoted to capital preservation for its global high-net-worth clients and institutions.
A small portion of its $11 billion in assets is in its Tocqueville mutual fund, which Kleinschmidt has been managing since January of 1992. The fund has delivered average annualized returns of nearly 10% since then, beating the S&P 500 in the process, although it has lagged the market in recent years.
I asked Kleinschmidt why commodity prices, above all other indicators, are key to understanding the global economy and markets, and why he believes that stocks of commodity companies could be at a turning point.
Have a great weekend and make the week ahead a profitable and productive one.
Think Like A Contrarian For A Portion Of Your Portfolio
- Look at most beaten-up markets, industries and stocks
- Find highest quality companies or funds in them
- Battered areas to consider nibbling in:
- Commodities: metals and mining
- Emerging markets such as China
- High-yield bonds: especially energy firms
Robert Kleinschmidt: Mining For The Future
- SPDR S&P Metals and Mining ETF (XME)
- Price: $14.09 on 2/3/16
- 52-week range: $11.38 – $30.00
More Robert Kleinschmidt from the WEALTHTRACK archives:
Robert Kleinschmidt: Election Bonus?
In this week’s exclusive interview with Tocqueville Fund’s veteran value investor, Robert Kleinschmidt he once again takes a contrarian view, this time on the investment impact of the presidential election.