I decided to take a look back at columns from one year ago as the pandemic was rearing its ugly head. It was a bit painful; I was sanguine at the time in thinking that it would be all be over more quickly than the reality. Call it being hopeful, naïve or just plain stupid; I'll admit to all three at times.
I will own the fact that I booked a Royal Caribbean (RCL) cruise just after the pandemic started, for May of last year. Yes, I knew about the pandemic (although I'm not sure we yet had applied that term to it), but booked the cruise anyway in the belief that Covid would blow over quickly. It was more hope than anything; I knew we'd get our money back if it was cancelled, and that ended up being the case. Not taking advantage of the discount Royal Caribbean offered for a future cruise was a wise move, at least.
Some moves during that time definitely paid off, including a foray into microcaps via the Royce Micro-Cap Trust (RMT) , a closed-end fund. Last April, RMT was trading at a 15% discount to net asset value (NAV), well above its three-year average of 10.5%. Since then, RMT has paid out 45 cents in dividends and is up 120%. It still trades at a 14.2% discount and yields 5%.
Argentine farming name Cresud (CRESY) has made a nice run since my late March 2020 column on farming names, up 81%. However, that does not tell the whole story. Just months earlier, at the start of 2020, I'd named it as my top pick for 2020. Between that column and the one mentioned earlier, just a 10-week span, CRESY fell 60%. Yes, my "top pick" made a nice run later in 2020, but for the entire year it was down 32%. (CRESY, by the way, is in the midst of a right-offering, which I am currently reviewing.)
One of the more interesting situations was the precious metals market, specifically silver. The spot price of "poor man's gold" fell from about $19 an ounce in late February to just below $12 in mid-March. However, demand for physical silver skyrocketed, creating a huge disconnect between the spot price and silver you can hold in your hand. Since bottoming, the spot price has risen 127%, closing Tuesday at $27.03. While the spread between spot and physical silver (as measured by the price of junk silver -- non-numismatic value dimes, quarters and half-dollars minted before 1965) has narrowed considerably, a $1,000 bag of junk silver containing 715 ounces will now run you about $26,300, or nearly $37 an ounce. That's still a 36% premium to spot, but below the 68% premium we saw in late March.
Why look back at what you were thinking in the past in terms of investments and the markets? It's simply because you can learn something from both the successes and failures. I figure by the time I hit 150, I'll have it all figured out.
