Massive opportunity developing in gold stocks

[Cardboard]

Vaccine news has created sell-off in gold but, this is very short sighted considering massive debt having been and continuing to pile up in developed countries. Fed and European Central Bank will remain super accommodative and real yields will continue to be negative.

 

Some mid-cap names offer mouth watering free cash flow yields at current prices and balance sheets are in terrific shape.

 

Names like DPM, IMG and AR are pretty interesting.

 

I made really good money on these, sold, now getting back in.

 

Cardboard

[Gregmal]

Yea...I'm looking forward to the peaceful transition of power from growth stocks to value stocks.

[D33pV4lue]

I hear bitcoin is making a resurgence again too

[K2SO]

Gold stocks can even pass as value stocks right now... earnings and cash flow multiples are very reasonable, with an upside option on the value of gold. You have to assume though that rising interest rates won't crush the gold price.

 

 

Worth a small allocation, at least.

 

[rb]

Gold stocks have been such a big pile of dogshit over the years that I would just stay the hell away. Treat them like drugs. Just say no.

 

If you are an awesome, big swinging dick, market timer then go for it.

[Cardboard]

Such empty statements again from that RB...

 

Warren Buffett had quasi-cornered the silver market in 1997. Then authorities likely told him politely to sell (at a nice profit) since he was such authoritative figure being involved in precious metals. Don't want to break the Fed and they eventually lost control.

 

Peter Cundill must have had a big dick too in the early 2000's buying gold stocks for his fund.

 

Cardboard

[no_free_lunch]

I agree, gold stocks are a dog.  What do you like in the sector Cardboard?  I am not aware of even one compounder over the multiple cycles.  Happy to be shown otherwise.

 

Physical gold / silver could be treated separately from an investment perspective.  That might make more sense but I just can't bring myself to but into it.

 

 

[Cardboard]

No cyclical is ever a great compounder over multiple cycles.

 

However, when a cycle last 5 to 10 years that is plenty of time to make astronomical returns.

 

I already named a few. Now it is up to you to do your homework.

 

Cardboard

[Mark Jr.]

As Bill Fleckenstein says, if you think the unicorn economy is overvalued (and I do), and the markets have departed from fundamentals (ditto) and you don't want to get your head handed to you shorting this dogshit (never again), then gold is the way to express this thesis. And it's been working for me for awhile, but I've been invested in gold since 1998. Overweight at various times since maybe 2006 or so and seriously overweight now.

 

What I've been doing this year is piling into silver. My gold positions are large enough.

 

I'm glad people are skeptical, I'm glad mainstream media still bashes gold. I'm glad that after gold is up 63% in 18 months and is the best performing asset class since 2000 that nobody cares. I'm glad the miners are still about half what they were at the high in 2011 and nobody notices.

 

I'm glad everybody I who I tell I'm super overweight in gold thinks I'm a total idiot and I'll be glad when the next time they call me a total idiot is when it comes time to sell.

 

MMT is here. UBI is coming. Rates are stuck at zero and headed negative. Cash is done. Central bank issued digital cash is coming, with "use it or lose it" as a "feature".

 

The miners just put up another quarter of stellar earnings and nobody cares. HUI up over 100% since March panic lows and all of the majors and many of the mid-tiers have been hiking the dividends. Still, nobody cares.

 

This is the fattiest pitch in a long time, and nobody cares.

 

The longer people don't care, the better.

 

[Lance]

I prefer streaming companies - FNV, RGLD and WPM - for longer term and crappy miners like HL for trading around/selling calls and puts.

 

Thanks

Lance

[Spekulatius]

It all depends on the gold price and the discipline of the operators. It is similar to oils and gas except prices for their product are better.

 

Personally, I would rather own a little gold etf and not worry about thee things. FWIW, I own a little IAU.

[JRM]

I've posted on Kirkland Lake, but I seemed to be just talking to myself.  I also own Pure Gold and Discovery Metals as more speculative investments. 

 

What I like about gold is when I talk to most people about it they look at me like I'm an alien.  It is definitely not mainstream yet.

[Castanza]

I think silver is a bit more interesting. The EV and solar boom that is just getting started is heavily reliant on silver. It's a key element (best in class currently) for batteries and panels. Even as efficiency increases the demand is still growing due to sheer volume. There is already a shortage globally on an annual basis, and is projected to grow exponentially. From a mining perspective, silver is much harder and time consuming to mine than gold. There is also far fewer good productive mines out there. Yet the price of silver hasn't moved much. Mines need higher prices to be profitable, couple that with increased demand and it's difficult to not see silver ticking up over the next decade.

[rb]

I think silver is a bit more interesting. The EV and solar boom that is just getting started is heavily reliant on silver. It's a key element (best in class currently) for batteries and panels. Even as efficiency increases the demand is still growing due to sheer volume. There is already a shortage globally on an annual basis, and is projected to grow exponentially. From a mining perspective, silver is much harder and time consuming to mine than gold. There is also far fewer good productive mines out there. Yet the price of silver hasn't moved much. Mines need higher prices to be profitable, couple that with increased demand and it's difficult to not see silver ticking up over the next decade.

I would agree that silver is a better proposition on the fundamentals. Not just the demand side but also the current price ratio to gold. There's also less gold nuts speculating in silver so your price won't get whipped as much based on "mood".

 

The downside is that you don't really have good silver mining pure plays out there so you have to go physical. There could also be an interesting long/short trade if you want to go after that silver-gold differential.

[Cardboard]

"There's also less gold nuts speculating in silver so your price won't get whipped as much based on "mood"."

 

When you are in a hole you should stop digging.

 

Silver is a tiny market highly more volatile than gold. It has terrific fundamentals but, to mention that it is less subject to "mood" than gold is either ignorance or irresponsibility.

 

Cardboard

[Castanza]

I think silver is a bit more interesting. The EV and solar boom that is just getting started is heavily reliant on silver. It's a key element (best in class currently) for batteries and panels. Even as efficiency increases the demand is still growing due to sheer volume. There is already a shortage globally on an annual basis, and is projected to grow exponentially. From a mining perspective, silver is much harder and time consuming to mine than gold. There is also far fewer good productive mines out there. Yet the price of silver hasn't moved much. Mines need higher prices to be profitable, couple that with increased demand and it's difficult to not see silver ticking up over the next decade.

I would agree that silver is a better proposition on the fundamentals. Not just the demand side but also the current price ratio to gold. There's also less gold nuts speculating in silver so your price won't get whipped as much based on "mood".

 

The downside is that you don't really have good silver mining pure plays out there so you have to go physical. There could also be an interesting long/short trade if you want to go after that silver-gold differential.

 

First Majestic Silver looks relatively interesting.

 

[Gregmal]

I get the allure to this and do agree, even as someone who hates gold and the arrogance of your typical gold bug...my question would be...does anyone have any really exotic trade or way to express something like this. I really dont want to waste a whole lot of capital on these things because I'd rather just play it safe and buy things that can do well under this scenario as well as a few others...but if the trade really takes off it would be nice to have a few lottery tickets. Any ideas? I personally think theres probably a few similar metals or commodities you could apply the same thesis to, while also maintaining a few more ways to win...but maybe I am missing something. Is there a specific reason for gold?

[JRM]

I get the allure to this and do agree, even as someone who hates gold and the arrogance of your typical gold bug...my question would be...does anyone have any really exotic trade or way to express something like this. I really dont want to waste a whole lot of capital on these things because I'd rather just play it safe and buy things that can do well under this scenario as well as a few others...but if the trade really takes off it would be nice to have a few lottery tickets. Any ideas? I personally think theres probably a few similar metals or commodities you could apply the same thesis to, while also maintaining a few more ways to win...but maybe I am missing something. Is there a specific reason for gold?

 

Obviously you just don't get it.  Just kidding.  If you're ready to take the red pill, listen to what Andy Schectman has to say about gold and silver. 

 

Its not a very sexy trade, but I think there is tons of optionality in simply owning the gold miner etf (GDX) or junior miner etf (GDXJ).  As the gold price rises, more of the reserves become 'in the money'.  You can get a nominal dividend, and there is no ticking clock.

 

 

[Spekulatius]

I would’ve careful with assumptions about industrial use of Silver, as in most cases a lot of progress is made to reduce the amount of material needed per unit over time, especially when the input is expensive.

 

Also Al and Cu can replace Silver in most applications if things really get silly.

[Castanza]

I would’ve careful with assumptions about industrial use of Silver, as in most cases a lot of progress is made to reduce the amount of material needed per unit I er tine, especially when the input is expensive.

 

Also Al and Cu can replace Silver in most applications if things really get silly.

 

Good thing silver is a byproduct of mining lead, copper, gold, and zinc  :P

 

It's absolutely possible though. But silver currently is a tier 1 product for panels. If the goal is to increase efficiency, decrease footprint, and decrease costs then going with a sub par product wouldn't make much sense no? I guess inefficiencies could be reduced in other areas to make up for the difference. SunDrive is doing without silver and seem to be turning out solid products.

 

I'm more so saying I feel more diversified with silver than gold simply because of it's industrial demand.

[no_free_lunch]

Rather than calling these things gold and silver.. can we rebrand and call them physical crypto?  I think this would do a lot to get the hype cycle revving.  ;)

[rkbabang]

Rather than calling these things gold and silver.. can we rebrand and call them physical crypto?  I think this would do a lot to get the hype cycle revving.  ;)

 

If you figure out a way that I can transport a few $B of them easily, safely, and anonymously by myself across borders and through airports anywhere in the world, sure we'll start calling them p-crypto.

[rkbabang]

I hear bitcoin is making a resurgence again too

 

"Grayscale's bitcoin trust saw cumulative inflows through October, whereas gold exchange-traded funds (ETFs) saw "modest outflows" since mid-October. "This contrast lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at bitcoin as an alternative to gold"

https://www.theblockcrypto.com/linked/84001/jpmorgan-bitcoin-gold-institutional-investors-gbtc

[bizaro86]

I get the allure to this and do agree, even as someone who hates gold and the arrogance of your typical gold bug...my question would be...does anyone have any really exotic trade or way to express something like this. I really dont want to waste a whole lot of capital on these things because I'd rather just play it safe and buy things that can do well under this scenario as well as a few others...but if the trade really takes off it would be nice to have a few lottery tickets. Any ideas? I personally think theres probably a few similar metals or commodities you could apply the same thesis to, while also maintaining a few more ways to win...but maybe I am missing something. Is there a specific reason for gold?

 

Maybe warrants on Canadian juniors? There are few trading iirc. Fits the lottery ticket request, anyway.

[D33pV4lue]

Gold stocks have been such a big pile of dogshit over the years that I would just stay the hell away. Treat them like drugs. Just say no.

 

If you are an awesome, big swinging dick, market timer then go for it.

 

LOL! Agree. Gold miners are perennial destroyers of capital. Calling gold miners a value play might be the biggest oxymoron I've ever heard. Let's take a look back to the beginning of Covid how did that work out for the investors holding gold as a hedge? They took an even bigger beating than the market.

 

But that's where your wrong D33pV4lue  gold is a hedge against inflation. Then can someone show me a chart of equities index to inflation vs Gold indexed to inflation?

 

Investing in gold is a fool's game why don't we just go out and buy some crypto? Not to say there arent times when trading miners isn't a good strategy, but as "long-term investors" it makes no sense.

 

Sorry for the rant I will now mute myself from adding my 2 cents so as not to disturb the people in this thread that are actually interested in gold.

 

BOL