Fund Manager Charlie Dreifus interviewed on Bloomberg shares his view of gold as an investment class. Charlie Dreifus was noted as the Fund Manager of the Year…so he’s no slouch. He discusses his “method” for picking good investments. Surprisingly, gold is missing.

He touches on NOT picking a mutual fund only by yield. He say chasing yield can end up putting you in some of the riskiest companies.

Charlie Dreifus No On Gold

The interviewer then ask if Mr. Driefus held any gold or cash…looking for position size estimates from Charlie.

Said he does not hold gold…but said by pure luck ended up late fall with about a 20% cash position.

Reasons Mutual Funds Pass On Gold

1. Gold unlike stocks and bonds pays no dividend or interest
2. Except for the recent few years, gold was either moving down or sideways
3. Gold stocks with exception of the past few years were horrible investments
4. One has to paint a “doom and gloom” economic picture to sell which impedes his ability to sell other investments…and remember mutual funds can only legally invest to the up side…no shorting.

So even though Charlie knows how to manage a successful mutual fund, he really can’t recommend or hold gold without jeopardizing the faith investor must put in the other companies in the fund.

I wonder if Charlie holds any gold bullion in his personal accounts?

Here’s the Bloomberg video…enjoy!

You guys don’t really care about a mutual fund manager…you make your own investment choices. I hope you seriously consider adding gold bullion to the mix. You’ll be glad you did.

Happy Investing!

Rio Tinto (NYSE: RTP), gold mining giant, announced the slashing of 14,000 jobs and the reduction of $2.5 billion in operating expenses. The layoffs are reported to save the company $1.2 billion dollars a year. This report comes on the heels of the failed buyout attempt by BHP Billiton.

Rio Tinto Layoffs

MarketWatch.com reports the CEO, Tom Albanese quoted as saying,

“Given the difficult and uncertain economic conditions, and the unprecedented rate of deterioration of our markets, our imperative is to maximize cash generation and pay down debt.”

Rio Tinto has mining operations all over the world including their most profitable mining operation mining not gold, but copper at the Kennecott mine in Utah. The video is a clip from local news in Utah discussing the layoffs and what it means for workers.

Enjoy the video..

Happy Investing!