- Royalty companies receive a stream, which is an agreed-upon amount of gold, silver, or other precious metal that a mining company is obligated to deliver in exchange for up-front cash.
- From 2008 to 2016, Franco-Nevada produced the best returns of all royalty companies, and better returns than GLD or SPY.
- When compared to GLD as the benchmark, the iM-Rating for FNV is A(A), indicating that the most recent one- and five-year Rolling Returns for the company were higher than for
- Additionally, the one- and five-year rolling return graphs for FNV are sloping upwards near the end, indicating possible further excess gains over the benchmark ETFs, GLD and SPY.
Blog Archives
Franco-Nevada Better Than Gold: Evaluating Royalty Companies With iMarketSignals’ Fund Rating System
TIAA-CREF Actively Managed Equity Funds Did Not Add Value For Investors!
The iM Fund Rating System rates a fund’s return relative to a benchmark fund by comparing the terminal values from periodic $1.00 monthly contributions to both funds over the same period. Ratings can range from a grossly underperforming ‘E’ to a good outperforming ‘A’. The ratings are derived from the most recent past 1-yr and 5-yr Rolling Performances, shown as ‘1yr(5yr)’ e.g. A((B)).
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The Dynamic Linearly Detrended Enhanced Aggregate Spread: A Long Leading Recession Indicator
- The DAGS, short for Dynamic Linearly Detrended Enhanced Aggregate Spread, is a derivative of the Enhanced Aggregate Spread (EAS) recession indicator which comes from Robert Dieli.
- The DAGS can signal, as much as nine months ahead when a cycle peak (recession start) is likely to take place.
- Armed with that information, investors can make appropriate plans. As of writing (May 2016), it signals, at least to the end of January 2017, a continuation of the expansion phase of this business cycle.
The Dieli Enhanced Aggregate Spread: A Long Leading Recession Indicator
- The Enhanced Aggregate Spread (EAS) comes from Robert Dieli, and most of the following description of this indicator, and why it works, is from personal communications.
- The EAS can signal, as much as nine months ahead, when either a cycle peak (recession start) or a cycle trough (recession end) is likely to take place.
- Armed with that information, decision makers can make appropriate plans. As of this writing (May 2016), it signals that it is highly unlikely for a recession to begin before the end of 2016.
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A 0.3% Rise in the Unemployment Rate Will Signal an Oncoming Recession.
- A reliable source for recession forecasting is the unemployment rate (UER), which can provide signals for the beginnings and ends of recessions.
- Recently Gundlach warned if the UER moves up a couple of tenths in the next couple of months, “we will be on recession watch.”
- The latest UER (March 2016) is at 5.0%, signifying that no recession is imminent. However, should the UER increase to 5.3% then a recession will be signaled.
- Investors should carefully monitor the unemployment rate, because if it moves up a few tenths of a percent from where it is now, then high recession probabilities prevail.
iM-BestogaX-5(SDS) System (Long Hedging Strategy)
This model is similar to our iM-BestogaX-5 System which is partially hedged by shortening SSO. But the underlying component models of the iM-BestogaX-5(SDS) System use a long SDS hedge instead of short SSO.
The iM-BestogaX Index of the Russell1000 and related Trading Systems
- The iM-BestogaX Index of the Russell1000 holds the so called “Vice” stocks (excluding Gaming stocks), plus the stocks from the GICS-sub-industries: Restaurants, Soft Drinks, and Internet Retail.
- This capitalization weighted index outperformed SPY by about 4.5-times from Jan-2000 to Mar-2016.
- Over down-market periods the iM-BestogaX Index lost on average 87% less than SPY, and over up-market periods gained on average 24% more than SPY.
- Trading systems which periodically select a small number of highest ranked stocks from the Index produced simulated annualized return as high as 34.4% with maximum drawdowns of about -20%.
iM-BestogaX-5 System
- The BestogaX universe of the Russell1000 consists of the so called “Vice” stocks (excluding Gaming stocks), plus the stocks from the GICS-sub-industries: Restaurants, Soft Drinks, and Internet Retail.
- A discussion on the merits of investing in the stocks of the BestogaX universe is available here.
- The iM-BestogaX5-System is a combination of the partially hedged BestogaX-5 Investor and Trader models, each of which periodically select five of the highest ranked stocks from the Russell1000 BestogaX universe.
- No market timing in the stock buy- and sell rules. During adverse market conditions it is hedged short SSO, with hedge ratios varying from 20% to 50% of current holdings.
- This system has a low turnover, because the specified minimum holding periods are one year, and three months for the Investor and Trader component models, respectively.
Please refer to the relevant model descriptions for performance curves of the two equal weight component models BestogaX-5 Investor partially hedged and BestogaX-5 Trader partially hedged.
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iM-BestogaX-5 Trader
- The BestogaX universe of the Russell1000 consists of the so called “Vice” stocks (excluding Gaming stocks), plus the stocks from the GICS-sub-industries: Restaurants, Soft Drinks, and Internet Retail.
- A discussion on the merits of investing in the stocks of the BestogaX universe is available here.
- The iM-BestogaX5-Trader model periodically selects only five of the highest ranked stocks from the Russell1000 BestogaX universe, and holds them for at least three months.
- There is no market timing in the buy- and sell rules. The model is rebalanced weekly, resulting in small weight adjustments, and dividends are re-invested when available.
- Backtesting was done on the web-based trading simulation platform Portfolio 123.
In the Figure-1 below, the red graph represents the performance of the model and the blue graph shows the performance of the benchmark SPY.
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iM-BestogaX-5 Investor
- The BestogaX universe of the Russell1000 consists of the so called “Vice” stocks (excluding Gaming stocks), plus the stocks from the GICS-sub-industries: Restaurants, Soft Drinks, and Internet Retail.
- A discussion on the merits of investing in the stocks of the BestogaX universe is available here.
- The iM-BestogaX5-Investor model periodically selects only five of the highest ranked stocks from the Russell1000 BestogaX universe, and holds them for at least one year
- There is no market timing in the buy- and sell rules. The model is rebalanced weekly, resulting in small weight adjustments, and dividends are re-invested when available.
- Backtesting was done on the web-based trading simulation platform Portfolio 123.
In the Figure-1 below, the red graph represents the performance of the model and the blue graph shows the performance of the benchmark SPY.
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