MILLBROOK, NY – May 23, 2022
Since the beginning of year through mid-May 2022, the stock market has been volatile, and declining, with the S&P 500 Index down over 17%. Bond prices have also declined as interest rates have risen, and yields on the 10 year U.S. Treasury have risen to levels not seen since 2018. The economy is strong, however, and the labor market continues to be tight – employers posted 11.5 million job openings in March 2022 and 4.5 million Americans quit their jobs, both record numbers. Meanwhile, U.S. inflation measured by the Consumer Price Index fell slightly to an 8.3% year-over-year increase in April 2022 versus 8.5% the previous month, partially due to lower energy prices. However, supply chain issues remain. For instance, according to FleetMon, a tracker of shipping vessels, one out of every five container ships worldwide is waiting outside a Chinese port as a result of Chinese COVID lockdowns in cities such as Shanghai. During this broad market selloff, Midas is pursuing its disciplined approach of seeking to include in Midas Magic some of the world’s strongest companies with global operations in finance, technology, and other industries. Likewise, Midas Fund is seeking to discover opportunities to invest gold and other natural resource companies offering financial strength, expanding production profiles, increasing cash flow, or other special features.
Midas Fund The Fund’s holding of of Fresnillo plc, one of the largest silver producers in the world, performed well in the past month. Shares of Sandstorm Gold Ltd., a precious metal royalty company, a Canadian mining company with operations in Namibia and Bulgaria, underperformed in the past month..
The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income The Fund seeks primarily capital appreciation and protection against inflation and, secondarily, current income through investments primarily in precious metals mining and other natural resource companies, as well as gold, silver, and platinum bullion. The Fund currently is invested in a global portfolio of primarily large and medium gold and diversified mining companies, precious metals royalty companies, and ETFs holding gold and silver bullion.
Midas Magic The Fund’s position in MarineMax Inc., a recreational boat and yacht retailer and services company, performed well in the past month. The Fund’s holding of Enova International Inc., a provider of financing and credit to borrowers, hindered the Fund’s performance in the past month. Each of Mastercard Inc. Class A and Alphabet Inc. Class A currently comprise more than 10% of the Fund’s net assets.
The Fund seeks capital appreciation. Relative to the S&P 500, the Fund’s portfolio currently is more weighted in economically sensitive sectors, such as communications, and cyclical sectors, financial services, and is underweight in defensive industries, such as utilities.
How to Invest in Gold?
Three alternatives investors often consider when seeking the advantages of gold are gold bullion, stocks of gold mining companies, and funds that invest in gold and gold-related securities, such as Midas Fund. Using a disciplined approach, Midas Fund seeks to emphasize gold and other natural resource companies offering financial strength, expanding production profiles, strong free cash flow, and promising exploration potential. The Fund’s portfolio is focused on what we believe to be some of the best companies in the sector and so we view Midas Fund as currently well positioned to seek capital appreciation and protection against inflation.