Gold miners take the lead (among ETFs)

Micron is macro

It is time to revisit investments and update recommendations since my last investment post. Remember, though, that I am not a financial advisor, and prior results do not guarantee future returns.

In that previous article, I mentioned a metric I have been using: Sharpe ratio divided by PEG ratio. This prioritizes several desirable traits: steady price growth without too much volatility; and healthy earnings growth combined with affordable valuations.

After I sent out the previous article, I realized I could apply the same principles to individual stocks as well as ETFs. On that basis, I bought MU (Micron Technologies) as well as ARGT (Argentine stock index fund). ARGT is almost unchanged, unfortunately, year to date. MU, in contrast, is up about 83% year to date.

I planned to repeat the analysis at the end of each quarter. However, my metric involves earnings, so I decided to wait one month into the next quarter to get all the information from “earnings season”. I also decided to include a third dimension emphasizing consistently respectable returns across 13-week, 1-year, 3-year, 5-year, and 10-year time frames (using the geometric mean of returns).

Running the new screen, MU remains the best performing stock, so I am happy to hold onto it. Among ETFs, things have changed. ARGT has slid in the rankings, and I will sell it.

The top four ETFs in the new ranking are all gold miner ETFs, and the leader of the pack is RING, offered by iShares. I am buying this with some hesitation. It is a potentially volatile offering. In February 2012, it opened close to $50 per share, falling gradually over the next few years to close to $10 per share, down about 80%. It did not recover its original price until August 2025, thirteen and a half years later. RING got close to $100 in January and February of this year, falling to about $75 per share. Thus it must be watched very closely.

There is a sobering reason for optimism about commodities, especially gold, and that is the explosion of US government debt, now at $39 trillion and counting. There is no willpower in the White House or Congress to bring that under control. This makes an argument for gold as the ultimate store of value.

I don’t know if it is appropriate to compare stocks with ETFs, but for the record, MU has the better value for my investment metric. You could have made 545% returns if you bought MU exactly one year ago. Well, better late than never!