Hour 1 – Breaking Down The Long Term Trends That Are Key For Investors
For a shortened and broken up trading week there were some key events. A new ECB President was selected, Christine Lagarde; US jobs data surprised to the upside; and markets across the board remain volatile. We discuss all of these topics on this week’s show as well as get insights on some junior metals stocks that have drill programs either staring up soon or already underway.
Please keep in touch by emailing me at Fleck@kereport.com. I love hearing form all of you!
Have a great weekend everyone!
- Segment 1: Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group shares his thoughts on low and negative interest rates around the world and the currency wars that are only going to increase.
- Segment 2: Chris Temple wraps up the market moves for the week and recaps the announcement of the new ECB head as well as the US jobs data on Friday.
- Segment 3: John Kaiser joins me to address why the junior resource stocks are still largely being ignored. He also shares a stock that he will be watching over the coming months.
- Segment 4: Matt Geiger, Managing Partner at MJG Capital Fund discusses what he thinks would happen to the US Dollar and a wide range of commodities if a trade deal between the US and China is reached. He also outlines three stocks he likes in the junior space.
KER rocks…every American should study this site
+1 – Agreed that the KER rocks…. Thanks Cory & Big Al and to all the contributors.
The KER has a global audience, much larger than just Americans, and there are quite a few Canadians, Europeans, Asians, and Australian investors that pop on here from time to time to share ideas and feed their minds.
Cheers!
Ker has rocked for a long time……….
Only possible with the contribution of others that support the site………jmo
Gold bull Mobius says every portfolio needs at least 10%
Bloomberg News | July 4, 2019
“Veteran investor Mark Mobius says that gold’s set to push higher, potentially topping $1,500 an ounce, as interest rates head lower, central banks extend purchases, and uncertainty surrounding geopolitics and cryptocurrencies fans demand.
“I love gold,” Mobius, who set up Mobius Capital Partners LLP last year after three decades at Franklin Templeton Investments, said in an interview in Singapore, adding bullion should always form part of a portfolio, with a holding of at least 10%. “As these interest rates come down, where do you go?”
https://www.mining.com/web/gold-bull-mobius-says-every-portfolio-needs-at-least-10/
Goldmember – I Love Gold!
Why Gold is Money: A Periodic Perspective
The Visual Capitalist – July 4, 2019 By Nicholas LePan
“Once the above elements are eliminated, there are only five precious metals left: platinum, palladium, rhodium, silver and gold. People have used silver as money, but it tarnishes over time. Rhodium and palladium are more recent discoveries, with limited historical uses.”
“Platinum and gold are the remaining elements. Platinum’s extremely high melting point would require a furnace of the Gods to melt back in ancient times, making it impractical. This leaves us with gold. It melts at a lower temperature and is malleable, making it easy to work with.”
> Gold as Money
“Gold does not dissipate into the atmosphere, it does not burst into flames, and it does not poison or irradiate the holder. It is rare enough to make it difficult to overproduce and malleable to mint into coins, bars, and bricks. Civilizations have consistently used gold as a material of value.”
https://www.visualcapitalist.com/why-gold-is-money-a-periodic-perspective/
The Gold Series: The History of Gold
By Jeff Desjardins – The Visual Capitalist
Ex, tell the truth, what are you really saying about gold?
b – gold is just a pet rock and barbarous relic.
(oh… and Central Banks keep buying it for some crazy reason… maybe because of it’s ability to be a store of value for thousands of years)
😉
Personally, I’m far more interested in speculating on the much more volatile Jr Miners that pull the yellow metal out of the ground, but whose margins and economics track the movements in gold pricing.
Philosophically I like how precious metals factor into the market dynamics of the economic universe. It’s a wild, wild, world…..
Can’t wait to see the forth part of the series which is about gold being an investment. It should show that gold has not performed as well as an investment as stocks have over the long-term.
Well Gold has sure outperformed stocks in the century by a landslide from 2000- 2019.
Ex,
Yes, gold did easily outperform the stock market as measured by large cap stocks during that medium time frame (2000-2019) but surprisingly during that time frame small and mid cap stocks actually outperformed gold.
Gold is up about 5x since trading opened on 1/1/2000.
Since the same date, the Dow Jones US Small Cap Index is up less than 4x and the Russell 2000 Small Cap Index is up about 3x.
You are correct Matthew as long as you exclude dividends. I, myself, consider dividends to be part of the total return (performance) of stocks. Some people however do not.
Since most small caps don’t pay dividends, I doubt that the difference makes up for the extra 100% that gold has on the Russell 2000.
At 1.5%, it takes almost 50 years to double your money.
JMiller – that is an interesting point to consider regarding dividends and they should count as part of the overall return, but as Matthew mentioned, most small to medium cap stocks don’t have much of a dividend or don’t have them at all.
On the larger blue chip stocks the dividends factor in, but still wouldn’t have caused most portfolios in paper assets (stocks, mutual funds) to have outperformed gold in the 21st Century.
There were also a number of large companies that completely went belly up in that time frame (big box retailers, electronics companies, software companies, restaurant franchises, video rental companies, etc….). There is still considerable risk in any individual company as the only constant in business is that things change.
Gold isn’t go to go out of business, have a hostile takeover, or a disruptive industry (unless you count cryptos), so that is one reason it has stood the test of time as a store of value far longer than ANY individual company.
For clarity, I’m not suggesting to put all one’s wealth or even half of one’s wealth in any asset class or precious metals, as I’m a big believer in a diversified portfolio that is rebalanced from time to time (stocks, mutal funds, bonds, PMs, real estate, business ventures, permanent insurance & annuities, etc…)
My only point is that Gold has been money far longer than most assets still traded today, and likely will be money for a long time into the future because of it’s unique physical properties, and precedent as valuable.
(EQX) (EQXFF) Equinox Gold Achieves Commercial Production at the Aurizona Gold Mine
by @newswire on 2 Jul 2019
During the month of June, the Aurizona processing plant operated at an average throughput of approximately 90% of its name-plate capacity of 8,200 tonnes per day, exceeded 90% average recovery and produced more than 7,000 ounces of gold. Gold production is expected to continue to increase through the third and fourth quarters of 2019, with average life-of-mine production estimated at 136,000 ounces per year.
Christian Milau, Equinox Gold’s CEO, stated, “Achieving commercial production at Aurizona is a significant milestone, making Equinox Gold a multi-mine producer and bringing us one step closer to our near-term target of having three mines in production in 2020. We are pleased that Aurizona is ramping up quickly and thank our team, contractors and stakeholders in Brazil for their hard work and support.”
https://ceo.ca/@newswire/equinox-gold-achieves-commercial-production-at-the
Equinox Gold (TSX-V: EQX) – $725M Market Cap in 18 Months. Pretty impressive.
CRUX Investor – Jun 27, 2019
Interview with Christian Milau, CEO and Director of Equinox Gold.
“Where is the M&A? Where are the shareholder gains coming from? Do they need to diversify? Is there a retail investor story here? And will the Gold price stay steady?”
“This is the coming together of 3 Gold assets, 2 in California and 1 in Brazil, and 3 big names in the shape of Ross Beaty, Richard Wark and Lucus Lundin. A strong management team, who has investing a significant proportion of their own wealth, and is incentivised on deliverables and share price and pride themselves on being lowest quartile salary for Gold companies. This is low-grade bulk tonnage business – so it’s about move dirt effectively and extracting Gold efficiently. Achieving a market cap of $725M in 18 months is no mean feat.”
RONALD-PETER STÖEFERLE: I Believe We Will Easily Go To $1500 Gold Very Soon
July 3, 2019
“Ronald discusses the potential for trust problems within the banking system and why these types of issues can happen quite quickly. His annual report “In Gold we Trust” looks at the problems looming in the financial sector.”
“Trust in the political system, media, and science all appear to be crumbling at the moment. However, trust in the economy and the U.S. dollar remains reasonably stable. A monetary u-turn is coming, which will likely bring a recession to many countries. What will central banks do to mitigate this, and it seems likely they will counter this with more quantitative easing.”
https://palisaderadio.com/ronald-peter-stoeferle-i-believe-we-will-easily-go-to-1500-gold-very-soon/
Jordan Roy-Byrne – We are in a Gold Bull Market that may well last 20 Years
by @PalisadeRadio on 27 Jun 2019
Gold’s Target Is $1,520 – Pepperstone Group
Kitco News – Tuesday July 02, 2019
“If this case plays out that we see this central bank easing to the extent that the swaps and rates markets are pricing, and I think you’d be looking at those 2011 lows at around $1,520 [an ounce] as your 12-month, 15-month price target,” Weston told Kitco News.
Weston said that “gold still needs to find support before a sustained uptrend can be confirmed.”
https://www.kitco.com/news/2019-07-02/Gold-Price-Target-Is-1-520-Pepperstone-Group.html
WCU: Commodity Market Heats Up
2019-07-05 – Saxo Bank
Ole Hansen – Head of Commodity Strategy
“Commodities, with a few exceptions, failed to hold onto the gains that were seen following the G-20 meeting in Osaka. During a holiday-shortened week the market first reacted positively to renewed hopes that the US and China would return to the negotiation table. A relief that was soon overtaken by a return to reality when weak economic data from Asia to Europe and the US continued to highlight the risks to the global economy and with that demand for key commodities from oil to industrial metals.”
“To finish off a volatile week the US job report for June ended up topping all estimates with stronger than expected job growth potentially easing calls for a 50bp Federal Reserve rate cut on July 31. ”
“Gold traded in a 56-dollar range around $1400/oz as conflicting market news added to nervous trading from recent buyers still seeking assurance that gold has established a new low and not just another high. Crude oil jumped only to slump as demand growth concerns overshadowed a nine months extension of the Opec+ agreement to curb supply.”
https://www.home.saxo/insights/content-hub/articles/2019/07/05/wcu-commodity-market-heats-up
ANTHONY MILEWSKI: EV Adoption Will Create Huge Pressure On Nickel Market
“Anthony discusses the shift in battery chemistry and how companies have gradually reduced the amount of cobalt and manganese in their batteries. This chemistry requires time, capital, and safety reviews. The higher the ratio of nickel, the higher the capacity but also an increased possibility of thermal run-away. It will take some time to get to the higher nickel levels. Tesla is already approaching the highest levels of nickel in their batteries due in part to their advanced computerized charging systems that monitor and keep their batteries cool.”
https://palisaderadio.com/anthony-milewski-ev-adoption-will-create-huge-pressure-on-nickel-market/
Hi Ex – What is your favorite nickel stock?
I am a little late to the party, but thanks to Cory and Al for another great show!
Ex – Can you share some of your favorite Nickel stocks?
Thanks to Cory and Al for another great show! A little late to the show this week as I was busy moving.
Here is my Nickel watchlist. I hold a position in Balmoral and initially traded the narrative in Garibaldi but haven’t done as much with Nickel personally. At one time I had a reasonable position in Metals X as well.
My exposure to Nickel has been mostly through Platinum & Paladium companies on this list like North Amercian Palladium, Platinum Group Metals, Nickel Creek, Group Ten, Polymet, Sylvania, Panoramic, etc… as Nickel often occurs with PGMs.
Giga Metals looks interesting to me for earlier stage.
Sherritt Int’l is a solid producer of Nickel and Cobalt.
I’ll throw out what I have on the #WatchList.
AMC.L Amur Minerals Corp
AAL.L Anglo American Plc
ANTO.L Antofagast Plc
ARL.AX Ardea Resources
ATL.TO Atlatsa Resources Corp
ANW.AX Aus Tin Mining
AUZ.AX Australian Mines
BAR Balmoral Resources Ltd
BHP BHP Billiton Ltd
BTT.V Bitterroot Resources
BMZ.AX Black Mountain Resources Ltd
JAY.L Bluejay Mining
CHEM Canadian Energy Materials Corp
CML.V Canickel Mining
CZI.AX Cassini Resources
CLA.AX Celsius Resources
CTM.AX Centaurus Metals Ltd
CLE.V Clean TeQ Holdings
DKM.AX Duketon Mining
ERA.PA Eramet SA
FPX.V First Point Minerals
FMG.AX Fortescue Metals
GGI.V Garibaldi Resources
GIGA.V Giga Metals Corp
GLEN.L Glencore Plc
PGE.V Group Ten Metals
HLND Highlands Pacific Ltd
HZM.TO Horizonte Minerals
IGO.V Independence Group
IMT.V International Montoro Resources Inc
2362.HK Jinchuan Group
JUB.V Jubilee Platinum
LND.L Landore Resources
LEG.AX Legend Mining Ltd
MLX.AX Metals X
MCR.AX Mincor Resources
MTH.AX Mithril Resources Ltd
MZM.AX Montezuma Mining
MUM.V Mustang Minerals Corp
NNN.V Nickel One
NILSY Norilsk Nickel
NOT.V Noront Resources
NAN.V North American Nickel Inc
KZZ Nunavik Nickel Mines Ltd
PAN.AX Panoramic Resources
PIO.AX Pioneer Resources Ltd
POM.TO Polymet Mining
POS.AX Poseidon Nickel Ltd
NIC.V Pure Nickel Inc
RMI.AX Resource Mining Corp
RIO.L Rio Tinto
RNKLF RNC Minerals (previously Royal Nickel Corp)
RRS.V Rogue Resources Inc
RXL.AX Rox Resources
SME.V Sama Resources
S.TO Sherritt International
SIE.V Sienna Resources
S32.AX South32 ltd
SRJ.V Spearmint Resources
SRCH.V SearchLight Resources previously CNC.V Canyon Copper
SGQ.AX St George Mining Ltd
SX.CN St Georges Eco-Mining
SMMYY Sumitomo Metal Mining Co
TLM.AX Talisman Mining
TTC.CN Tartisan Nickel Corp
XTM.V Transition Metals
VALE Vale SA
WM.TO Wallbridge Mining Co
WG.TO Wellgreen Platinum
WSA.AX Western Areas
He Is Hiding, Nouriel Roubini demands release of tape over fiery exchange with crypto CEO.
https://business.financialpost.com/technology/blockchain/he-is-hiding-roubini-demands-release-of-tape-showing-fiery-debate-with-crypto-exchange-ceo DT
July 4th Weekly Crypto Review with MooAnt and Samantha Jane
Will GDX fill its 6/20 gap this week? Based only on the daily chart, I’d guess yes:
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=2&dy=0&id=p37008684955&a=643586306
While the sector leaders consolidate their gains, it wouldn’t surprise me if many juniors catch a bid. IPT, for example, finally looks and good and even bucked silver’s hard fall on Friday.
The weekly chart is setting up for a breakout that will have IPT targeting its 2016 high:
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=5&mn=0&dy=9&id=p13816054515&a=674986562
SLV fell 1.88% last week while ISVLF gained 11.16%.
Whether priced in dollars or SLV, ISVLF/IPT is now a weekly chart buy.
https://stockcharts.com/h-sc/ui?s=ISVLF%3ASLV&p=W&yr=3&mn=11&dy=0&id=p43707562614
Looking forward to the blast off. Agreed the charts look like it will be coming soon.
The odds that silver will rise versus gold have improved…
https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=1&mn=3&dy=0&id=p93631056116&a=672678565
Yes, Silver is poised to gain on the gains gold has already made and it is time for it to break through $16 and $17.
Humm……Not so Hummming along……..
https://www.zerohedge.com/news/2019-07-06/debunking-myth-tight-us-labor-market
for June, the fact is the labor force has contracted by more than 600,000 workers this year.
the number of people unemployed has dropped by more than 400,000, or 6.50%, since December. But the number employed has also declined, by almost 200,000. So their sum total – the labor force – has fallen by almost 600,000, or about 0.33%.
The notion of the tight labor market drawing people into the labor force from the sidelines is largely a myth.
16 Million MORE people not in the workforce….from the year 2000, according to the debt clock… 🙂
Hi Cory.
Thanks again for great content!
In yesterday’s editorial with Doc you didn’t mention gold’s break out from the monthly bollinger bands. I am a little surprised this wasn’t mentioned since it’s my understanding, that this a key observation point for Doc.
Hopefully you will soon go through gold’s technical picture with Doc; at least by the end of the month, where monthly technicals become more valid.
Once again; thanks for all your efforts, Cory.
I have learned a lot from listening to your show. Hopefully, all the knowledge I have gained will soon materialrize in some significant gains 😎🇩🇰
Best Regards, Anders
Anders, gold’s positive monthly technicals are already valid. Gold closed well above the upper Bollinger band in June and even closed above the quarterly Bollinger bands for Q2.
🍻
Why Investors Give Up On Their Big Winners Way Too Soon? DT
https://business.financialpost.com/investing/investing-pro/why-investors-give-up-on-their-big-winners-way-too-soon
Good post DT. This is the biggest flaw I’ve had as an investor. Picking bottoms and buying low has never been my weak point, although some struggle with that, but letting my winners run, or selling right before a breakout has been the area that I most need to work on. Much appreciated.
The Dow is up 130% from its January 2000 high of 11,700 but how many people realize that it is really down by more than 50% since then, in real terms?
Priced in gold, the Dow is down 14% since peaking last October. That’s a far cry from the picture painted when pricing it in dollars…
https://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=W&yr=5&mn=0&dy=0&id=p77946333119
Matthew – Great point about the discrepancy between the Dow priced in Dollars versus Gold. Most people don’t think about things in this light, and only in the fiat currency of their country, but valuing things against real money = Gold also is important to reflect on with paper assets, real estate, and businesses. Cheers!
Both stocks and the USD are weaker than they appear and that’s probably good news for the gold bull as this situation will fortify the already significant wall of worry that many are struggling with.
Stocks do look like they will be going higher versus the dollar…
https://stockcharts.com/h-sc/ui?s=%24INDU&p=W&yr=5&mn=0&dy=0&id=p42736946339&a=675071651
Cheers!
Good show Cory thx