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Larry Berman CFA, CMT, CTA BMO S&P/TSX Eq.Wt. Global Gold ZGD-T COMMENT Feb 23, 2015

5-10k shares per day volume. He went in last November and bought a million shares. The market maker created the units, so the value traded does not matter. The individual investor needs to trade at least 50k shares to have the market maker create units and you have to call the market maker.

Larry Berman CFA, CMT, CTA

Owned

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$8.360

Stock price when the opinion was issued

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Equally weighted gold in the world. A great way to play the sector. Thinks we will get a double bottom in gold at $1175.00. If we break that then you get a sell signal. It may go 10% lower.

SELL

When gold was testing $1050 he would say yes, but we have had the strongest rally in gold in several years. He thinks we will peak out at $1300 this cycle.

COMMENT

Seasonal play? He wouldn’t say this is a seasonal play. One of the reasons people likes gold is that it is often negatively correlated to other asset classes, and does particularly well at a time of real and perceived insurrection.

STRONG BUY

A month ago it was his favourite sector. Gold plays had 40-50% upside but we have come off the lows. He now sees nothing with potential of 20-40% upside other than gold.

BUY

KL-T He loves gold as an asset class, and he expects a 20% swing upward in 6-12 months. KL has performed well, but he prefers diversification instead of a specific gold stock, like the ZGD-T ETF.

BUY

Depending on the vectors you want exposure to, these are his favourite ways to play the gold sector. He believes the world will be in a low interest rate environment for years to come. Gold will outperform.

BUY

ETF for gold producers.

XGD and ZGD are the Canadian go-to names. ZGD is equal weight, so the big caps don't run the show.

In the US, he likes GDX or GDXJ (for the juniors).

TOP PICK

Adding equities to your gold holdings adds in equity beta, so this can add leverage to the gold price both upward and downward. MER is 6 bps. Gold is a historical hedge during periods of heightened geopolitical risk. Central banks remain buyers of gold. Thinks gold price goes higher.

Wants equal weight, as large caps tend to have less leverage to the price of gold than either small caps or the juicy mid caps. Good, diversified way to start entering the sector.

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