John Rubino, publisher of his newsletter over at Substack, joins me to discuss the everything rally we’ve seen in most markets, some macroeconomic factors he’s tracking that are less optimistic for 2024, and the continued opportunities he sees in gold and uranium equities. We start off discussing whether the rally in the US general equities will be sustainable as we move into 2024. We review how falling corporate earnings, anticipated in the quarters to come, will likely need to get squared with bloated Price-to-Earnings (P/E) ratios seen again in the in broad market stocks in the S&P 500 or Nasdaq. John still has doubts about the strength of the consumer based on retail companies reporting muted to lower guidance for next year, the continued layoffs being seen, changing in credit card spending and consumer debt levels.
In contrast, John sees more risk to reward opportunities based on where gold equities are prices in comparison to the robust gold price still holding above the $2000 level as we close up 2023. He makes the point that it takes some time to change investors view of how things will unfold in the future, and that the longer gold prices stay elevated, to where pricing at $2000 is seen as support, instead of resistance, then we’ll see more investors analyze the valuations with eyes to higher prices, margins, and economic value of deposits defined. We also reviewed that many of the larger mining producers and ETFs did get a nice bid recently , and even some of the junior resource stocks like i-80 Gold (IAU.TO) (IAUX), Eloro Resources (ELO.TO) (ELRRF), and Southern Copper (SCCO) all finally started to move higher on good news for a change.
We wrapped up discussing the very good year that uranium pricing and the uranium equities have had, and whether or not they were getting over-heated, or if the sector still has more room to keep running. John postulates that the sector has a decade of growth in front of it, and that while things may have run hard recently, and will still be subject to shorter-term pullbacks, he sees those as opportunities for investors to keep scaling into positions. He also noted that personally he was positioning in the larger companies and more familiar names in his portfolio for now, as that is where new generalist capital tends to flow into first, but that over time, the money will find it’s way down into more of the junior uranium explorers and developers. He mentions positioning in the Sprott Junior Uranium Miners ETF (URNJ) as a more diversified way for investors to get exposure to a basket of uranium junior stocks, without taking as much individual company risk or having to know every aspect of the sector.
*In full disclosure, Shad has positions in I-80 Gold and URNJ at the time of this recording.
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