Gold as an alpha strategy for hedge funds

ôIt's gold, I tell ya, gold.ö A hedge fund manager contemplates how to eliminate beta in a precious metals strategy.

If youÆre a precious metals investor, then invariably, the profits you want to aim at are those that come from an appreciation in the price of the bullion itself. The beta story is what drives you, and that is precisely what gold bulls get so excited about. A better way to describe the emotional range of the invariably vocal gold bug might actually be æover-excitedÆ.

Trevor Steel, CIO and managing partner of Baker Steel Capital Managers, a London-based hedge fund...

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