Hendry: Owning gold miners is 'insane'

Eclectica's Hugh Hendry has argued there is no longer any rationality behind owning gold mining equities, as the intervention of quantitative easing in 2009 has distorted valuations across the sector.

The hedge fund star (pictured), speaking at an investment conference last night, acknowledged gold equities were a great place to invest between 2003 and 2008, but said since the financial crisis the asset class has become too unpredictable. According to Forbes, Hendry said he would not touch gold mining equities with a ten-foot pole. "There is no rationale for owning a gold mining equity. It is as close as you get to insanity," he said. "With gold miners the risk premium goes up as the gold price goes up, so there is no valuation argument that protects you against the risk of conf...