Dave Kranzler, Fund Manager and Publisher of the Mining Stock Journal and the Short Seller’s Journal, joins me for a discussion on the all-time high made in gold today, the disconnect we are still seeing in the response from the gold stocks at these record metals prices, and parsing through opportunities in perceived jurisdictional risk.
We start off looking at some of the macroeconomic factors like inflation, the Fed’s increase in M2 overall despite it coming down year over year, the reverse repo market still creating more liquidity in money supply, and the upcoming rate cuts. Another big factor has been central banks in the East underpinning a continuous bid for both gold and silver. With regards to the gold mining stocks, he feels that there has been a loss in trust from generalist investors in these companies ability to maintain upside growth, after a series of corrections have followed each rally higher, but that this may be starting to change. He also notes the investor herd behavior piling into tech stocks like Nvidia and meme stocks that has most generalist chasing those themes and not even looking as the resource sector.
Wrapping up we get into a nuanced discussion around perceived jurisdiction risk, and conversely perceived jurisdiction safety, and how often there is more opportunity for upside surprises, faster permitting, and larger resources in some of the jurisdictions commonly thought of us risky. Dave outlines how he has done well the last couple of years positioning in Fortuna Silver (TSX: FVI) (NYSE: FSM), Calibre Mines (TSX: CXB) (OTCQX: CXBMF), and Silvercorp Metals (TSX: SVM) (NYSE: SVM) when he did more due diligence into the perceived risks many market participants have about West Africa, Nicaragua, and China respectively, but found them to be overblown. In contrast, many jurisdictions in the US and Canada are much slower to get projects permitted and developed, and still have community pushback and social license issues.
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