After a rough year, the 2015 Vancouver Resource Investment Conference was
predictably smaller than the 2014 edition. Despite that and the grueling
volatility of 2014, the mood of the crowd seemed significantly more
optimistic to me.
So I asked my audience—a group of several hundred saints who got up way
too early on a Sunday morning—how many of them thought gold had bottomed.
About a third of the audience put their hands up. I asked how many thought
that if the bottom wasn’t behind us, it was somewhere near ahead of us, and
another third put their hands up. Then I asked how many were sure that gold
was going much lower, and one single individual raised his hand.
A year ago, gold was in an upturn as well, but less dramatically so, and
investors were more cautious about saying that the bottom was in or even
nearly so. This year, it was a good two-thirds of the crowd. Granted that it
was an unscientific sample, I still found it quite striking after last year’s
bloodbath.
But what really got my attention was when I asked how many in my audience
saw the 2014 meltdown as an opportunity, had money to invest and wanted stock
recommendations. I was very pleasantly surprised to see that almost half the
crowd put their hands up.
Whether the tide has truly turned in the precious metals market, it
clearly has in the set of investors I met in Vancouver.
And there’s good reason to think that they are not alone. As of Friday’s
close, gold is up about 10.5% since last November’s low. At
the same time, one stock in our portfolio has risen as much as 96.96%
since its November low, and many more of our picks are up by substantial
double-digit percentages.
That doesn’t prove that they can’t go into reverse again, as they did last
year. True enough—but last year there were also opportunities to take profits
early in the year, before the bear returned with claws fully extended. We
actually ended the year modestly up, extreme volatility notwithstanding. So
if 2015 turns out to be “as bad as 2014,” we’ll actually make money, and
that’s not too shabby in a bear market phase.
I may be going out on a limb (again), but frankly, I don’t expect that.
Europe is in so much trouble, China’s growth is slowing, and I don’t believe
the US’s funny figures, so I expect gold to do very well this year… potentially
explosively well, if the global financial system receives any more shocks
like the short sharp shock the Swiss just delivered.
This Swiss event is particularly important precisely because it came from
the Swiss. They have no interest in hurting their trading partners but simply
could not afford to continue pegging the Swiss franc to the euro. I expect
players like Putin to rock the boat—and I’m sure he will again this year,
more than once—but this was a seismic shock right from the heart of Europe.
Meanwhile, Greece is contemplating the first-ever disintegration of the
EU, and the Colder War is heating up again in Ukraine. Makes one wonder how
much higher the international spot price of gold might be if it were priced
in euros instead of dollars.
Not that things are much better in the USA, where the president has just
proposed a new form of eating the rich.
In short, if the financial world looks as increasingly chaotic to you as
it does to me, the logical conclusion is to be bullish on precious metals. I
believe that’s what we’ve been seeing since mid-December.
What about other metals? Well, I’ll tell you that other than precious
metals, the metal I’ve heard about the most at the show has been tungsten.
The buzz isn’t much to go by, however; I can’t report a compelling case for
this particular industrial metal to see sustained or increasing prices while
others are falling. If I’m bearish on the global economy, it’s hard for me to
be bullish on any industrial metals or other minerals. Still, the vibe suggests
tungsten as a resurging flavor of the day. I’ll be looking into this further.
What about the precious metals space—what do I like there? I like growing
producers that have shown they can make money in even the worst of recent
quarters. And of course I like large, high-margin, advanced exploration
projects, many of which are still on sale. I’m scraping up some more cash to
invest personally, and this is where I plan to focus.
For those already all in or even overexposed, my recommendation is even simpler:
hold on. The last couple of weeks have shown that our market is far from
dead. Instead, there's a large amount of money on the sidelines, waiting to
be convinced it’s safe to get back in the water. By then, prices will be
higher and the chance for profits reduced, so I’m looking to act sooner
rather than later.
Of course, I could be wrong, and the bottom yet ahead—that’s why we call
it speculation. But for my money, I’d much rather invest in a market that has
been mauled by a bear for years and offers opportunities in companies that
are objectively undervalued than one that’s been defying gravity and
probability for far too long.
Your strategy is yours to determine, naturally, but this is the way I see
it. Just as naturally, I encourage those interested in my specific
recommendations in the nearest term to try out the Casey
International Speculator, with our money-back satisfaction
guarantee. But whether you do or decide to go it alone, your own conclusions
based on the facts outlined above should determine your strategy and
investments. Good luck.
