The larger a fund is the more visible it is because they can affect markets. Institutional funds are required to disclose their holdings to the SEC 45 days after the quarter. As a smaller investor you can see what they were doing or trying to do – sometimes the institutions have done well, sometimes they have not or most of the time they are similar to all investors. Large institutions can make a wide variety of investments under the theme of what they believe will happen in the future. The biggest individual investor is George Soros who runs the Soros Fund Management LLC for the past year he made investments in gold. As reported by Rachelle Younglai in the article Soros cashed in his Barrick stake, the Soros Fund had bought gold shares, SPDR Gold Trust, gold futures and other investments. Last quarter the fund sold some of its investments including Barrick Gold shares at 3 times what he paid.

As a smaller investor, it is impractical to duplicate what institutions can do, because you would not be buying enough shares to reward yourself, however it is possible to try to understand what themes the institutions are doing. Then picking one company or investment in that area. In the terms of Barrick Gold – they paid down some of their debt as well as the price of gold has risen and the stock went up from $7 to $ 21. This was a classic case of buy low and sell higher. Barrick has some of the best low cost gold mines in the world located in Nevada; it also owns some great mines in Chile which are expensive to get to operations but once operating will deliver great results. The company had a lot of debt which was caused by buying non gold companies at their highs and similar to individuals with a lot of debt, it presents problems. Unlike individuals the company had numerous properties to sell or not to concentrate on. When the price of gold rose, its profits rose from existing gold mines and it was easier to sell some assets to pay down debt.

Linking to dividend paying companies when commodity prices fall, it is a great opportunity to use some of your dividends to buy the best companies in the field. Eventually prices rise, and you will have bought low and sell high but often you need patience, foresight and ability to take a very calculated risk. Your dividends allow you to do this for similar to institutional money, you have money coming into your account on a regular basis and you can do something with the money. Your homework is to find the best company with the best assets to minimize risk and maximum reward and then buy.

There are more questions than answers, till the next time – to raising questions.