Comments on: Gold shares or krugerrands - Which is the better investment?

Addleson, M. A icle Commen s on: Gold sha es o k uge ands - Which is he be e in es men ? Sou h A ican Jou nal o Business Managemen P o ided in Coope a ion wi h: Uni e si y o S ellenbosch Business School (USB), Bell ille, Sou h A ica Sugges ed Ci a ion: Addleson, M. (1986) : Commen s on: Gold sha es o k uge ands - Which is he be e in es men ?, Sou h A ican Jou nal o Business Managemen , ISSN 2078-5976, A ican Online Scien i ic In o ma ion Sys ems (AOSIS), Cape Town, Vol. 17, Iss. 2, pp. 117-, h ps://doi.o g/10.4102/sajbm. 17i2.1043 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/217930 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen (insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en, gel en abweichend on diesen Nu zungsbedingungen die in de do genann en Lizenz gewäh en Nu zungs ech e. Te ms o use: Documen s in EconS o may be sa ed and copied o you pe sonal and schola ly pu poses. You a e no o copy documen s o public o comme cial pu poses, o exhibi he documen s publicly, o make hem publicly a ailable on he in e ne , o o dis ibu e o o he wise use he documen s in public. I he documen s ha e been made a ailable unde an Open Con en Licence (especially C ea i e Commons Licences), you may exe cise u he usage igh s as speci ied in he indica ed licence. h ps://c ea i ecommons.o g/licenses/by/4.0/ s. A . J. Bus. Mgm . 1986, 17(2) Le e s Commen s on: Gold sha es o k uge ands - which is he be e in es men ? The abo e-men ioned a icle in ol es he applica ion o a s anda d po olio selec ion model o da a on gold-sha e and k uge and p ices as well as yields on easu y bills (S. A . J. Bus. Mgm . 17: 1 - 00). The da a co e a pe iod o h ee yea s (May 1980-Ap il 1983). The pu pose is o de e mine whe he o e his pe iod an 'e icien (gold) po olio' would ha e included k uge ands. The i le o he a icle is misleading in ha he e idence p esen ed does no , and canno , o m a basis o ex-an e o ecas s o e icien po olios. A mos he s udy p o ides insigh in o he ela i e pe o mances o di e en asse s o e a limi ed pe iod in he pas . I o e s a iew on he much mo e es ic ed ques ion o wha would ha e been he be e in es men . The s udy is echnically compe en , ye i only amoun s o an applica ion o a ela i ely simple model and does no o e any insigh s in o he na u e o he ma ke s in ol ed. No a emp is made o gene alize abou he implica ions -pe - haps wisely in iew o he limi ed scope -bu , in his sense, i does no ep esen a con ibu ion o knowledge in he a ea o po olio selec ion. The ac ha gold- ela ed asse s a e in ol ed does no disguise he na u e o he exe cise. M. ADDLESON G adua e School o Business Adminis a ion, Uni e si y o he Wi wa e s and, P.O. Box 3JJ70, B aam on ein, 2017. No embe 1985 Au ho s' esponse The majo c i icism o he a icle conce ns he ac ha he analysis is an ex-pos s udy. I is co ec ly poin ed ou ha 117 in es o s make ex-an e decisions and hus one has o be cau ious in making conclusions abou ex-an e beha iou on l.ie basis ~ ~-pos esul s. Indeed, we ag ee en i ely wi h hese VIews which JS why we included a sepa a e sec ion in he a icle en i led 'Ex-pos s ex-an e A gumen s'. In his sec ion we di ec ly add ess he issues aised. Howe e , al hough ag eeing wi h hese sen imen s in gene al we canno ag ee ha his p oblem ende s he a icle wo hleM. I empi ical s udies, which a e by necessi y based on ex-pos da a, a e o be conside ed alueless, one would ha e o c~nclude ha highly espec ed jou nals such as he Jou nal o Finance, he Jou nal o Financial and Quan i a i e Analysis, he Accoun ing Re iew, he Jou nal o Accoun ing Resea ch, e c. ha e had in e io academic s anda ds o e he pas 25 yea s. Indeed, mos o he majo ecen wo ks in Finance ha e been empi ical s udies and one only needs o lis he names o men such as Fama, Jensen, Roll, Bea e , and Sha pe o ealize ha empi ically based esea ch is uni e sally accep ed. The key o cou se is o ind a consis en esul . The e o e, in unde aking an analysis such as ou s i is ue ha i only one pe iod we e examined, his would cons i u e a one-obse - a ion s udy. Howe e , whe e se e al pe iods a e independen - ly examined and a consis en esul is ound, hen su ely his mus p o ide some in o ma ion which migh cause in es o s o modi y hei cu en (ex-an e) beha iou . In his a icle, wha we a emp ed o show was ha o e all pe iods examined, on a isk-adjus ed basis, k uge ands we e ne e a desi able asse o SA in es o s o hold in hei po olios. I his was a well known and accep ed ac hen i is ue ha ou s udy has no alue. Howe e , ou belie based on he olume o sales in k uge ands o e he pe iods examined is ha his was no he case. As such we belie e h~ esul s o he s udy may cause in es o s o adjus hei ex-an e decisions. Su ely ha cons i u es in o ma ion and hence a con ibu ion o knowledge. J.F. AFFLECK-GRA es and G.D./. BARR, G adua e School o Business, Uni e si y o Cape Town, P i a e Bag, Rondebosch, 7700. Decembe 1985