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What is the story about?
S Naren of ICICI Prudential AMC believes that Silver is one asset class where investors need to be careful. He also went on to explain how can investors still play this theme if they wish to.
In an interaction with CNBC-TV18 on Monday, Naren stated that investors should be careful of any asset class that gives investors returns of 100% or more in less than one year, and that asset class recently has been Silver.
"But people want us to guess correctly an asset class which can never be guessed correctly. Because you see the daily moves in silver, you know, it is impossible for someone at ICICI Prudential to guess daily moments in silver, which is a global commodity, and how it will move up," Naren said.
Silver has had a rough ride over the last one week as the record high levels of over $120 an ounce which the White Metal surged to last week, turned into a horror show come Friday as the prices plunged 37% in a single session, marking the biggest intraday drop in history for the previous metal. Prices continue to remain volatile even on Monday amidst a stronger US Dollar, unwinding of leveraged positions and concerns over the potential policies of the Fed Chair-designate, Kevin Warsh.
Over the last few months, Naren and his fund have been telling clients to not put their money in Silver ETFs or Silver Fund of Funds. Calling precious metals the riskiest asset class currently, Naren said that while they do not know how to value precious metals, in case people want to still put money to work, they should only do it through the multi-asset route.
"The challenge is, people want us to get the top exactly right. Its hard. It is impossible. It is impossible for us to get into a euphoric framework when that euphoric top will be exact price and then come our experience of 2007 eight was when something becomes euphoric, you decide to become cautious, irrespective of how much become, how much more it will go. And that has been our framework."
In an interaction with CNBC-TV18 on Monday, Naren stated that investors should be careful of any asset class that gives investors returns of 100% or more in less than one year, and that asset class recently has been Silver.
"But people want us to guess correctly an asset class which can never be guessed correctly. Because you see the daily moves in silver, you know, it is impossible for someone at ICICI Prudential to guess daily moments in silver, which is a global commodity, and how it will move up," Naren said.
Silver has had a rough ride over the last one week as the record high levels of over $120 an ounce which the White Metal surged to last week, turned into a horror show come Friday as the prices plunged 37% in a single session, marking the biggest intraday drop in history for the previous metal. Prices continue to remain volatile even on Monday amidst a stronger US Dollar, unwinding of leveraged positions and concerns over the potential policies of the Fed Chair-designate, Kevin Warsh.
Over the last few months, Naren and his fund have been telling clients to not put their money in Silver ETFs or Silver Fund of Funds. Calling precious metals the riskiest asset class currently, Naren said that while they do not know how to value precious metals, in case people want to still put money to work, they should only do it through the multi-asset route.
"The challenge is, people want us to get the top exactly right. Its hard. It is impossible. It is impossible for us to get into a euphoric framework when that euphoric top will be exact price and then come our experience of 2007 eight was when something becomes euphoric, you decide to become cautious, irrespective of how much become, how much more it will go. And that has been our framework."
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