Freeport-McMoRan Inc. May Be Better Than Gold, But Not Under Modern Portfolio Theory

By ColoradoWealthManagementFund:

I’ll be writing this article as a rebuttal of sorts. While I agree with part of the authors premise, I felt there was substantial information that needed to be included. The author’s premise was: “the best way to invest in gold was through Freeport-McMoRan (NYSE:FCX)”. Is investing in FCX really akin to investing in gold though? For those readers already familiar with the company, the answer should be a resounding no. The operations of the company are heavily exposed to long term movements in the price of gold, copper, and oil. While an investor could short copper through (NYSEARCA:CPER) and oil through (NYSEARCA:DBO), that isn’t a practical option for most investors.

I agree with his suggestion that FCX is superior to gold (NYSEARCA:GLD) in a vacuum, but disagree that FCX replaces GLD.

For readers that are not familiar with statistics, be warned, this article will utilize ANOVA tables.

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