Layups In a Melt-Up

I’m as serious as a three piece suit this morning, so don’t mess with me.

When the market was collapsing, I was shorting Legg Mason, Inc. [[LM]] , Pzena Investment Management, Inc. [[PZN]] and Calamos Asset Management, Inc [[CLMS]] , mainly because they were idiots of the first order, victims to all things sinister. However, the inverse is true today, with the market 60% off its lows. Buying good asset management firms, instead of the actual mutual funds, has proven to be a better strategy, mainly because the asset managers know how to use glossy brochures to lure new investors into their “investment vehicles,” which in turn leads to greater earnings.

Big firms like BlackRock, Inc. [[BLK]] , Ameriprise Financial, Inc. [[AMP]] , Janus Capital Group Inc. [[JNS]] , Franklin Resources, Inc. [[BEN]] and Invesco Ltd. [[IVZ]] have been killing it this year; and it shows in their stock price performance.

Sometimes I like to get niche, so here goes. Take a look at U.S. Global Investors, Inc. [[GROW]] —small asset management firm out of  Texas, specializing in commodities—specifically gold. They are not a big firm, which is why I like them. Their biggest fund (PSPFX) has $681 million under management and is up 54% year to date. They have three other funds worth noting (USREX, UNWPX, EUROX), with year to date gains of 33%, 64% and 63% respectively.

Some of their top holdings include: PetroChina Company Limited (ADR) [[PTR]] , Petroleo Brasileiro SA (ADR) [[PBR]] , PartnerRe Ltd. [[PRE]] , Freeport-McMoRan Copper & Gold Inc. [[FCX]] , Rio Tinto plc (ADR) [[RTP]] , [[GOLD]] , [[JAG]] , Royal Gold, Inc. [[RGLD]] , Agnico-Eagle Mines Limited (USA) [[AEM]] , AngloGold Ashanti Limited (ADR) [[AU]] , Gold Fields Limited (ADR) [[GFI]] , Goldcorp Inc. (USA) [[GG]] and Silver Wheaton Corp. (USA) [[SLW]] .

The stock, U.S. Global Investors, Inc. [[GROW]] , has been an underperformer, due to some investment mishaps in the past. However, looking at their roster of holdings, coupled with their impressive, albeit non-space alien magician like, returns, the stock may continue its upward path, providing the market remains healthy.

For a small capper, it’s not a bad investment.

In other news, the market is melting up again and I have some trades to do.

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