Tisch Says We ‘Live by the Sword’ at Loews as Gold Bet Doublesby and
Loews investment in mining stocks fuels investment income gain
Gold investments have ‘come to life’ Tisch says on call
Loews Corp., the holding company run by New York’s Tisch family, was able to counter low bond yields and stock market volatility in the first half of this year with gold-related investments that doubled in value.
Second-quarter net investment income at Loews climbed to $56 million from $7 million a year earlier, the company said in a statement Monday.
“You die by the sword, you live by the sword,” Chief Executive Officer Jim Tisch said in a conference call discussing results. “We had, for a number of quarters, even years, suffered with gold investments. What’s happened in this most recent quarter is gold investments came to life.”
Tisch said his company had a rate of return of greater than 100 percent in the first half of the year on the investment, which he described as a hedge against stock market declines. Loews invests in a basket of mining stocks through a relationship with a limited partner, a company spokeswoman said without identifying individual securities. A Bloomberg Intelligence index of gold miners climbed 111 percent this year through June as the metal surged while investors sought save-haven assets.
Gold has been a bright spot for Loews as low oil prices pressured its Diamond Offshore Drilling Inc. subsidiary. Impairments at that unit contributed to a net loss of $65 million at Loews in the second quarter. Tisch’s company dropped 2.1 percent to $40.46 at 12:16 p.m. in New York trading, narrowing its gain for the year to 5.4 percent.
“I am not, nor is anybody else here at Loews what you would call a ‘gold bug,”’ Tisch said, using a phrase for investors who are most optimistic about the metal’s prospects. “But it is interesting to me that in the first half of this year, with a relatively modest investment in gold securities, we’ve been able to earn an outsized rate of return.”