The Warren Buffetts Next Door: The World's Greatest Investors You've Never Heard Of and What You Can Learn From Them

Chapter 8. Mexican Gold

Investor: Andrew Swann

Date of Birth: April 26, 1954

Hometown: San Miguel de Allende, Mexico

Personal Web Site: None

Employment: Full-time investor

Passions/Pursuits: Fishing, tennis, and history

Investment Strategy: Junior gold stocks, oil, gas, hard assets

Brokerage Accounts: E*Trade

Key Metric: Cash flow

Online Haunts: www.valueforum.com, www.SmartInvestment.ca

Best Pick: Desert Sun Mining, Up more than 1,000 percent

Worst Pick: Oilexco Inc., Down 92 percent

Performance Since September 2004: Cumulative return of 237 percent versus 11 percent for the S&P 500^[35]

Never underestimate the importance of good timing. Even the most accomplished investors will admit to this truism. The subject of this chapter, Andrew Swann, is an outstanding investor because his specialty has been gold and other commodity stocks like oil. In fact, gold and energy stocks have represented more than half of his investment portfolio for the last decade. During that time the price of one ounce of gold has soared from $300 to more than $1,100. Oil has also skyrocketed, rising from under $30 per barrel to a high of $147 in 2008.

Swann started investing in gold in 1996, but he became convinced that he should sell most of his other investments and become more fully invested in gold by January 2003. Since then he says his stock portfolio has risen nearly 600 percent in value. An investment in the SPDR S&P 500 ETF (NYSE: SPY) over the same period would have yielded a total return of 39 percent. I have ...