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Brandon White: Investing is about being moral as well as right

Section: Daily Dispatches

By Brandon White
Tuesday, May 31, 2016

"Trader Dan" Norcini, to whose May 24 commentary --

-- GATA Secretary/Treasurer Chris Powell replied Monday --

-- is mistaken. Investing isn't just about being "right." It is also about being moral.

If technical analysis showed a buy signal, then presumably Norcini would buy Monsanto, or cluster-bomb maker Alliant Techsystems, or a cosmetics manufacturer that tests its products on puppies.

If there is one thing I think most members of the gold community have, it is a strong sense of right and wrong. I am proud to be part of this community and struggle for honesty, transparency, and social justice.

I am proud to encourage the gold industry to maintain the highest standards against money laundering and terrorist financing. As an associate member of the London Bullion Market Association, I am proud of the LBMA’s efforts to improve working conditions for miners and to stop the gold equivalent of "blood diamonds."

... Dispatch continues below ...


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I am pleased to see the results of the responsible investment community in Canada, where I live, and around the world, engaging in dialogue with mining companies to improve the way they do business and make their executive compensation packages reflect company performance. (Extreme compensation for executives when share prices are down is irresponsible and offensive.)

I am all over the concept of responsible investing as it relates to the gold market precisely because of the unsustainable and hazardous nature of our financial environment. The average person does not understand how precarious things are, and so I try to fight for him.

Norcini has no idea how big the responsible investing community is. (It isn’t just people of faith.) Nor does he know how big it will get. It already represents more than $1 trillion in assets under management globally and has doubled in the last two years with no sign of slowing down. In 2011 I recognized that the responsible investment community would be an excellent platform from which to present gold. I wasn't wrong.

I believe that Bullion Management Group is now the world's most responsible precious metals company. Not only is BMG engaging in conversation with the LBMA's "Responsible Gold Guidance" program; we are also an associate member of Canada’s preeminent Responsible Investment Association. Just last week we signed on to the United Nations-endorsed principles of responsible investment by becoming a signatory to the "Six Principles of Responsible Investing." We will be drafting the press release this week and presenting it at Canada’s largest responsible investment conference the following week.

Norcini's comments reflect the typical Wall Street attitude: abhorrently agnostic to the plight of the average person.

All money managers understand that diversification is necessary for steady returns with low volatility. But most money managers fail to grasp the bigger view -- that it is the government and the banking system itself that investors need to hedge against.

Adding gold to one's portfolio as a hedge (let's call it shorting big government and big banks) has been an effective way to achieve steady returns, reduce volatility, and insure against the madness of modern banking.

Gold has provided a return of more than 350 percent since 2000. What index has done that? What bank stock has done that? What bond has done that? What currency has done that?

What do all those securities have in common? They are nothing more than promises from dubious institutions that are fraught with multiple counterparty claims.

Gold is not a promise. Gold does not need a portfolio manager. Gold does not need an institution. Gold will never file for bankruptcy. Gold can never be worthless. Gold cannot be dishonest. Gold is the exact opposite of, and competition to, government-issued money -- and that is why it is disparaged.

If gold is really a "barbarous relic," then why do all major central banks own it? It’s simple: Gold is a hedge against themselves. I'd love to hear a central banker admit it.


Brandon White is an analyst for Bullion Management Group in Markham, Ontario, Canada (, and can be reached at

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