As it tends to do in tumultuous times, gold is once again shining brightly.
There was a sort-of Mea Culpa recently by one of my favorite financial authors, Jason Zweig, in the Wall Street Journal. Reflecting back on a comment made five years ago disparaging gold as an investment, he admits that the 10.5% annual return has since enjoyed made a hash of that prognostication. And while still urging caution he also offers up some valuable insights. Most important is a reflection on how diverse – and often contradictory – theories on why gold is being recommended at any given time.
At the opposite end of the “why buy gold” spectrum today was exemplified by a recent note from a less informed and more fanatical newsletter writer suggesting Now is the time to buy gold. As it tends to be in these politically extreme publications, the lack of logic is stunning. In the middle of July, a warning is sent about a bill introduced into the House of Representatives in March but now “redacted” (the correct word is “retracted”). But the bill could be reintroduced at some undefined time in the future, and if passed could cause the dollar to crash in value: so, Buy Gold Now. Why was there no recommendation to buy gold in March at less than $1,500 an ounce when there was actually a possibility of the bill passing? Why Buy Gold Now at $1,900 an ounce with that threat/justification gone?
“You can buy stock in companies that mine gold, or companies that sell gold. You can buy futures contracts and gamble on the direction of gold prices without ever taking ownership of anything physical. And, of course, there are mutual funds and exchange-traded funds – some own real gold, others just paper proxies and still others holding both.”
More worryingly over the short term is the simple statistic that one year ago exchange-traded funds held $118-billion in assets and today those same gold ETFs hold $215-billion. That represents a lot of new gold owners buying at a time of record-high prices. Now, just for grins, I offer up a couple of paragraphs from an Invest-Notes blog post on August 4, 2014, discussing some thoughts around asset allocation. This was prior to Zweig’s disparaging comments on gold as an investment:
Perhaps the easiest way to demonstrate this concept is gold.
You can just buy physical gold as bars, coins, or jewelry. You can buy stock in companies that mine gold, like Newmont (NEM) or companies that sell gold, like Tiffany’s (TIF). You can buy futures contracts and gamble on the direction of gold prices without ever taking ownership of anything physical. And, of course, there are mutual funds and exchange-traded funds – some own real gold, others just paper proxies and still others holding both.
However, when gold finds itself out of favor, all of these “diversified” assets will decline in value. In the last ten years, the price of an ounce of gold has been as low as $400 and as high as $1850. Gold has lost nearly a third of its value in the last 18-months. TIF was clearly an outlier in the list above, yet it has seen its share prices move between $19 and $100 over the same time.”
(A quick update; last ten-year pricing for an ounce of gold $1000 to $1,900. For TIF the stock price has been $38 to $138.)
Gold is simply a diversifier that can easily fit into most portfolios in a number of different forms but should be kept to a single-digit percentage of your overall holdings. Personally, I’ve got a couple of dozen gold coins purchased over the last twenty years, and there’s usually a junior gold mining stock somewhere in my equity portfolio. In fact, gold coins like the $20 Saint Gaudens are gorgeous as a physical object and could be classified as either a commodity or an artwork – depending on how specific you get with your asset allocation preferences. More important is knowing that successful portfolios tend to be built over time and rarely by making big additions (or sudden reductions) based on the latest shout-out from the crowd.
Finally, for your consideration, in Investnotes #5 from November 13, 2007:
One of the most successful family dynasty’s of all time, the Rothschild’s, have followed a very simple formula for diversification that has proven robust for over 400 years. There is a benefit to working with this model, even if just as a mental exercise, because it allows for considering the bigger picture. It is too easy to look at a stock portfolio or collection of rental houses while overlooking the many other things of value that are owned, or that can help create a truly diversified collection of assets.
1. One-third in cash; this includes equities, bonds, mutual funds, foreign currencies, certificates of deposit, and pretty much everything else represented by paper.
2. One-third in real estate; this includes a primary residence(s), vacation home(s), income-producing property, and raw land.
3. One-third in art and antiquities; this includes not just paintings and Greek pottery, but jewelry (think gold, precious gems, wedding rings, and wristwatches), furniture, fine china and flatware, and pretty much any object that has a market value.”
|Chick Corea was on my turntable decades before I knew who he was. Albums like The Leprechaun and Romantic Warrior have been staples of my jazz soundtrack since critical listening became a treasured habit.|
A keyboard player who worked with all the greats and pretty much played it all, Corea has spent the last couple of years revisiting bands and compositions from across a full career. This article is far from comprehensive, limiting discussion of his vast output and talking about only a handful of his music. Having seen Corea play live in numerous settings, most of the albums reviewed here have been savored both at home and in concert.
Kicking off his career in the early 1960’s Corea played across jazz genres; Latin, straight ahead, west coast. His debut album as a leader was released in 1968 (actually recorded in 1966). At the same time, he began recording and then touring with Miles Davis until 1972. A couple of free-jazz albums followed as Corea simultaneously began recording duets with vibraphonist Gary Burton and started the ensemble Return to Forever. By the time The Leprechaun was released in 1976 Corea already had a full catalog of albums both as leader and sideman.
Okay, during his early years as a leader I didn’t catch any concerts. In fact, much of this music from the 1970s still doesn’t do much for me. But The Leprechaun did, and it is only recently that I began to appreciate why. In the liner notes Corea says making this recording was, “…a way of working that was unusual for me at that time.” It is more than just a tuba and cello mixed with Moog synthesizers that shine on this jazz album. It is a surprisingly coherent blend of the many influences Corea had been exposed to over the first decade of his career.
Another release from 1976 was Romantic Warrior by his band Return to Forever. Granted, I didn’t see Return to Forever live until just a few years ago at the Portland Jazz Festival. But the original band – Corea, Al DiMeola, Stanley Clarke, and Lenny White – played the entire album and it sounded wonderful. Yet Romantic Warrior is distinct from The Leprechaun and the follow-on albums for Polydor that have been described as “belonging together.” In contrast, albums by Return to Forever, both preceding and following Romantic Warrior do not form a cohesive sound.
Herein lies the magic of Corea’s oeuvre; much like Miles Davis, Corea is a musical chameleon whose compositions cannot be constrained by traditional labels. His art needs different forms of expression, a variety of musicians, and distinct themes. Whether derived from the formal, lowkey sound of Crystal Silence duets with Burton, the bombastic recasting of books by L. Ron Hubbard, or the classical jazz sound on Like Minds with an all-star cast of jazz giants, Corea is a consummate tour guide of very different musical landscapes.
I have seen Corea and Burton perform live on two occasions. Corea on the piano (mallets bouncing off metal wire) and Gary Burton on the vibraphone (mallets bouncing off metal plates) with this instrumentation creating a sound unlike any other. Crystal Silence (1973), Duet (1979) and Native Sense (1997) are all thoughtful albums. Crystal Silence is a special favorite, with its cerebral, lyrical music. Like Minds from 1998 is another remarkable recording with Pat Metheny, Dave Holland and Roy Haynes joining Burton and Corea, and features original compositions by both. Here we have more strings – guitar and bass – with one of the hardest working men in jazz keeping the beat. To my ear, this album is neither traditional nor contemporary, but simply timeless. A must-listen for any fan of any of the band members.
The Ultimate Adventure from 2007 is a very good album, but it was the live performance that caught me by surprise and upped my appreciation. The flamenco dancing was a particularly entertaining segment of a show filled with visual surprises. Jazz shows as a theatrical enterprise are not something I’ve much encountered (Jason Moran’s tribute to Fats Waller being another outstanding example). Along similar lines, and my preference of the two albums, To The Stars featuring Corea’s Elektric Band, is also based on an L. Ron Hubbard book. As Corea has reportedly said, Hubbard was a very good science fiction writer, and these albums do a great job of describing the narratives musically. Both remind me of The Leprechaun, a sound of summation after much experimentation.
The latest addition to my collection is Chinese Butterfly, a double album from Chick Corea & Steve Gadd in 2018. Gadd has recorded with Corea for decades and appears on a couple of the albums listed above. One of the best journeyman drummers, and a true jazz gadfly who can play smooth, straight ahead, Avantgarde and all jazz in between, Gadd is joined here with a group that includes guitarist Lionel Loueke, sax man Steve Wilson and even former Earth, Wind & Fire vocalist Phillip Bailey. Hopefully, there’s still time to catch this one live. A playful album full of surprises, Corea is still the chameleon 50-years after his first recording as a leader.
Finally, check out the DVD Miles Electric; a different kind of blue. Released in 2004 it features the live performance of Miles Davis and band at the Isle of Wright Festival from 1970 in front of an audience estimated at 600,000 people. While Corea is featured playing electric keyboards during the performance, more interesting is the interview he gave. All surviving band members of the concert performance were asked to talk about their time with Davis while sitting with/at/around their respective instruments.
In the early 1980’s I was heading to a concert and spotted Chick Corea crossing Broadway, also on his way to the venue where he would shortly be playing. I pointed him out to my friend Paul, who had joined me for the show. Seeing us point in his direction from the opposite side of the street, he raised his eyebrows, then made a break for the theatre entrance. That’s as close as I ever got to being able to tell Corea just how much joy his music has brought me over so many years. No hard feelings, but it would have been nice to tell him personally.
|“Those who understand art only by what it looks like often do not understand very much at all.” -Sol Lewitt|
In 1965 Bridget Riley made a trip to New York City to participate in a show titled, “The Responsive Eye.” Her black and white works were already well known with one having been purchased by a dressmaker who just happened to be on the board of the Museum of Modern Art. He used the painting as the basis for a dress design, other designers quickly followed and suddenly Riley’s work was not only on dresses but lampshades and sofas. She was equally surprised and appalled by this use of her work – and received absolutely no compensation. Returning to her home in England, Riley assumed it would be decades before she would be taken seriously again. Fortunately for us, she was wrong.
Riley was asked about the earliest paintings, “Were you an angry young woman?” She responded, “I don’t think it was so much that.”
Today these early works – mostly synthetic emulsion on board then soon after simply oil on canvas – are too quickly labeled as Op Art. But Riley’s intention has never been about visual tricks to entertain spectators. In fact, Riley has described her early work this way, “I think they were beautifully aggressive.” When one of the grand old men of art criticism, E. H. Gombrich, inquired about her use of ‘the pure physics of the behavior of light’ Riley simply replied, “I haven’t studied the pure physics of the behavior of light.” The paintings are primarily intended to stimulate the brain, not the optical nerves. Her work is instead grounded in the long history of painting. In Riley’s intelligent conversations concerning artists, she has studied and admired we hear the importance of Titian, Poussin, Delacroix, Seurat, and Mondrian, among others. Her observations are quite sophisticated, “Titian takes two blues and an off-white from the colors in the sky – the farthest distance – and moves them down into the foreground as a skirt, a cloak, and a dress.”
“… color is wholly relative. Every hue throughout your work is altered by every touch you add in other places…” John Ruskin
Riley also discusses her progression as an artist by reflecting on the decision to move from black-and-white, to gray and then on to the color paintings for which she is now best known. She mentions the shift from black-and-white to gray was far more challenging than that when moving to color. Interestingly, many of the color paintings retain visual forms similar to some of those early black-and-white works. Despite the similarity in design, the color works have a startlingly different impact on this viewer. A trip to Egypt inspired both paintings and prints where the organization of colored stripes would influence later colorwork. Like her observation of how Titian uses colors to create “air” and cohesion in his works, Riley is very thoughtful in how she uses color in hers. Whether simple vertical stripes or wavy horizontal lines, these compare favorably to the later works featuring a mash-up of curves fragmented and interlaced diagonally.
“If you think of a square, or a circle or triangle, no matter what size it may be, you know exactly what form you can expect to see. But if you say red, yellow or blue you do not know at all what shade of colour you will be looking at.” Bridget Riley
The relationship between music and painting is another interesting topic Riley discusses. She said the impact of Stravinski’s lectures from 1939 that she read in book form became a sort of ‘bible’ to her (her word, her quote marks). Kandinsky also played in this space, but on a more esoteric level, “…we see the color green in the Key of D, only less dogmatically”. Again, for Riley color is more than something to stimulate the visual cortex. Like music, color can create feelings and emotions that are physical. Classical music, like classic paintings, can be studied across a spectrum of ideas and concepts.
“To treat them as historical documents or evidence of past concepts is wrong – they are particular solutions to continuing artistic problems…” Bridget Riley
A recent review in the Wall Street Journal (1-7-2020) was effusive in praise for an impressive Riley retrospective at London’s Hayward Gallery at the end of 2019. Yet, there remains a tendency to emphasize the visual over the cerebral. Over the top comments in the review included: “walking into a snail shell and discovering a turbulent seascape”; “the furious waves of Cataract 3” and; “the furious Indian reds” (are we allowed to use the word furious twice in one review?). It was a stunning show, but more because of the ideas and art history her paintings embrace, not just the optical effects. Today Bridget Riley is still making artwork that is more cerebral than visual, more lyrical than literal.
A series of interviews originally recorded in 1992 and reprinted in 1995 have been collected in an excellent new book, Bridget Riley Dialogues on Art, 2019. Most of the quotes here – hers and others – came from that book.