CHISWICK, WEST LONDON – Welcome to another edition of the Friday mailbag. I’m in my childhood home in London with Kate and the kids, closing my mum’s estate. We still haven’t decided what to do with her home and her belongings, so for now, we’re going to leave them here and do nothing.
In the meantime, we’re preparing a trip back to the U.S. to see my father in New York and Kate’s parents in Florida. My mum’s death has made us realize how precious time with our parents is. We’re hoping that being back on the road will help give us perspective on what to do next.
So, let’s get right to it… In today’s mailbag, readers criticize my recent silver analysis and tanker trade updates… wonder how we handle cash and health insurance while traveling… and respond to my thoughts on student loans…
Reader comment: C’mon, Tom, using that one insane price spike in 1980 to argue that silver hasn’t gone up at all is just silly. That’s when the Hunt Brothers were trying to corner the market, as I’m sure you’re aware, and it only lasted for a very short time.
Why not compare to 1976? Or 1996? Using the 1980 peak is cheating.
I did consider removing the unnatural Hunt Brothers’ spike while drafting my response, but in the end, I thought the point was still valid, anyway, and I wanted to keep things simple. Silver averaged around $21 in 1976 and $8 in 1996. Even using those prices as our reference, silver has not performed well in after-inflation terms.
Reader: In May 2020, you were generous enough to share with your readers your special report titled The Tanker Trade. As your report recommended, I invested equal amounts in all four listed companies. The results have been horrible. But now, in your Postcards, we hear about your incredible results in the container carriers and bulk carriers.
I realize that I’m not a paying subscriber to Tom’s Portfolio, but I’m sure I’m not the only reader of your Postcards who’s angry about the lack of your full disclosure in The Tanker Trade. Nowhere in that report does it mention that you also had an interest in container and bulk carriers. And if this interest developed subsequent to the issuance of The Tanker Trade in May 2020, I think it should have at least been disclosed in the Postcards. My advice in the future would be to not offer free investment advice unless you are willing to provide full and honest disclosure.
My interest in shipping investments started with tankers in May 2020 and then expanded to include dry bulk, LNG, LPG, and container shipping in December 2020. I try to be as transparent as I can in these Postcards about what I’m thinking and doing without giving specific investment advice.
Oh… and I made four tanker recommendations in May 2020: EURN, FRO, TNK, and INSW. I said these recommendations would take the next “few” years to play out. It’s been 15 months and so far, these recommendations have returned 5.2%, -23.2%, -8.2%, and 10.7%. (Over the same period, the S&P 500 is up 54%.) I still have full conviction in the tanker idea… it’s just taking a bit longer to play out than I thought. While the oil price has recovered since May 2020, oil supplies haven’t responded to the higher oil prices yet. Transported oil volumes will be the main driver of tanker rates, so we need oil production to rise for our tanker thesis to work.
Reader question: I love your Postcards and appreciate the healthier, simpler, low-cost lifestyle they reflect. You may have mentioned this before, but what provision do you make for medical expenses? Seems like just one of those, if you happen to be in the wrong place when it’s incurred, could jeopardize the entire plan. Thanks again for everything.
We had a Christian health sharing plan when we were in the U.S. last year, but we canceled that when we got to the U.K., which has universal free healthcare. But you’re right, in general, healthcare in OECD (Organization for Economic Co-operation and Development) countries has been a knotty problem for us to figure out and a pain in the neck for us to always have to be thinking about…
Reader question: I really enjoy reading your Postcards. Inspiring traveling and living as you all do. I have a question. In your writings, you say you have percentages of your money in gold, silver, and steel (shipping). What about cash? Do you have a percentage in cash, say 5% or 10% or whatever? Love your photos, though I was a bit concerned to see Kate riding with Penny in London on what appears to be the wrong side of the road for the U.K.!
Yes, we always maintain a healthy cash balance. And we also have the ability to borrow against our life insurance policies if we ever need more cash.
Reader: Regarding your comments on student loans, I have a question. I can definitely see the current administration forgiving the current debts as a way to buy votes and swing the negative to the positive. But are you also thinking new student loans will not be available for future college students because of their lack of repayment?
They’ll probably create a system of student grants, where the government gives money to students and subsidizes tuition.
And that’s all the time we have for this week! Please keep your questions and comments coming to [email protected], and I’ll respond to as many as I can in a future Friday mailbag edition.
– Tom Dyson