Disclosure:

The reader/viewer should not assume that investments in the securities identified and discussed were or will be profitable and it should not be assumed that recommendations made in the future will be profitable.

   All information is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned. Cheviot closely monitors its positions and may make changes to the portfolio’s investment strategy when warranted by changing market conditions. If a security’s underlying fundamentals or valuation measures change, Cheviot will reevaluate its position and may sell part or all of its position. There can be no assurance that Cheviot’s clients will continue to hold the same position in companies described herein, and their portfolio positions may change at any time. Past performance is no guarantee of future results. All investments involve risk including the loss of principal.

 

The reader/viewer should not assume that investments in the securities identified and discussed were or will be profitable and it should not be assumed that recommendations made in the future will be profitable.
   All information is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned. Cheviot closely monitors its positions and may make changes to the portfolio’s investment strategy when warranted by changing market conditions. If a security’s underlying fundamentals or valuation measures change, Cheviot will reevaluate its position and may sell part or all of its position. There can be no assurance that Cheviot’s clients will continue to hold the same position in companies described herein, and their portfolio positions may change at any time. Past performance is no guarantee of future results. All investments involve risk including the loss of principal.

Up and Down Wall Street

As seen in : BARRON’S

— January 14, 2013

By Alan Abelson

Darren Pollock is a manifestly bright fellow who earns his daily bread as portfolio manager and principal of Cheviot Value Management out in balmy Santa Monica, Calif. Darren dropped us a note recently in response to one of our recent scribblings on gold in which we suggested that what the yellow metal needed most was a good old fashioned shakeout that would send the hedge funds and the rest of the fast-money crowd fleeing and set the stage for a restoration of gold’s investment allure.

He didn’t quarrel with our diagnosis. Rather he wrote to point out to us that just such a shakeout was already in progress, and while gold suffered an attack of indigestion from publication of the minutes of the Fed’s December meeting, a true gold bull wouldn’t be overly perturbed because he realized that “we’re in the middle of a monetary stimulus marathon. This is no sprint.”

Darren claims that knowledgeable observers of Bernanke’s stewardship of the Fed knows that he is adamant about a few things: not repeating the premature withdrawal mistakes of policy makers during the Great Depression, fomenting higher real-estate prices via lower mortgages, and “creating a wealth effect in one’s 401k through higher share prices.”

He notes that since the Fed’s first QE four years ago, there’s a better than 90% correlation between the expansion of the Fed’s balance sheet and the price of gold. And since the Fed is on pace “to ratchet its asset base higher by more than $1 trillion this year,” if the correlation holds, gold should fetch something around $2,400 before 2013 calls it quits.

Cheviot is a completely independent firm, focused on providing objective advice to clients – always with the highest of integrity and the priority of putting the client first in everything we do.

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“Someone is sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

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Cheviot Value
Management, LLC

433 N. Camden Dr., Suite 800
Beverly Hills, CA 90210

310-451-8600