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July 19, 2010
The New Normal: Lower Returns From Equities, Bonds And Property Make Investing In Metals All The More Attractive
Bill Gross runs Pimco, the biggest bond fund manager in the world. He has coined the phrase “New Normal” to describe the current environment of ongoing low economic growth while the world collectively repays the debt it incurred to finance the boom. Essentially he is saying that equity, bond, and property investors have to get used to the much lower returns these asset classes are now delivering, and forget about the great returns that they used to deliver.
Metals and mining analysts can be excused a little schadenfreude about this state of affairs. For decades in the 1980s, 1990s and early naughties, this benighted group were made to suffer the derision of drug, telecom, technology and derivative analysts as metals prices languished and new technologies flourished. Or at least the valuations of new technologies flourished. Now, though, commodity producers generate half the earnings of the London stock marke
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