Dave Kranzler – Shorts In Tesla, Super Micro, Harley, And Homebuilders - Value Proposition In PM Stocks Like Viva, Cabral, Heliostar, Integra, New Pacific, And The Gatos and Silvercrest Takeovers
Dave Kranzler, Fund Manager and Publisher of the Mining Stock Journal and the Short Seller’s Journal, joins me for a wide-ranging discussion on the truth and fiction in macroeconomic numbers from the government, what stocks he is shorting in the general equities, and what gold and silver stocks he is bullish on in the junior precious metals sector. It’s a longer-format interview and we really cover a lot of ground in it.
We start off looking at the gulf between the macroeconomic numbers we get from the government reports, and the actual numbers showing up in the real world, and how to balance those out as investors trying to digest all of this. When looking at inflation readings, or jobs numbers, or GDP estimates, there is a huge impact in the markets created in the way these metrics are calculated or massaged, and a large impact from the government’s own involvement and overspending. Even the Fed’s M2 figures, despite it coming down when looking at year over year percentages are misleading as the M2 supply has been growing since 2023. The manufacturing numbers show many parts of the US having been in recessionary territory for years now, and as a result, many consumers are strapped by higher than reported actual inflation in their daily lives, and big segments of the public are cutting back on discretionary spending.
When contrasting the economy with the moves in the markets, it is very much 2 different lenses to view things through, with the general S&P and Nasdaq indexes having continued to make all time highs most of this year. Dave points out that if investors do their due diligence on individual companies that have been pushed to severe overvaluations, that there are still plenty of short-selling opportunities out there, citing his calls in Tesla (NASDAQ: TSLA), Super Micro Computer (NasdaqGS: SMCI), and more recently short calls on Harley-Davidson, Inc. (NYSE:HOG), and some of the US homebuilders.
Next we pivoted over to the drivers in gold from the eastern buying and BRICs countries central banks purchasing the monetary metal as the number 2 asset on their balance sheets after the US dollar. We discuss the dearth of western demand for gold and the gold stocks considering the backdrop we are seeing with gold having hit all-time highs since the end of last year and all through this year. This leads us into a discussion about gold stocks where Dave sees a good value proposition, including Viva Gold Corp (TSX.V: VAU) (OTCQB: VAUCF), Cabral Gold Inc. (TSXV: CBR) (OTC: CBGZF), Heliostar Metals Ltd. (TSXV: HSTR) (OTCQX: HSTXF), and Integra Resources Corp. (TSXV: ITR) (NYSE-A: ITRG).
We then got into Dave’s silver price expectations, and 2 recent high-profile merger and acquisition deals where Gatos Silver, Inc. (TSX: GATO) (NYSE: GATO) is being acquired by First Majestic Silver Corp. (TSX: AG) (NYSE: AG), and where SilverCrest Metals Inc. (TSX: SIL) (NYSE American: SILV) getting bought out by Coeur Mining, Inc. (NYSE: CDE). We then get Dave’s thesis on why he believes New Pacific Metals Corp. (TSX: NUAG) (NYSE-A: NEWP) will get rerated higher, to a better multiple on the economic studies they just released on 2 different projects. This leads into a discussion on what the appropriate metals prices assumptions should be in economics studies, and why more companies in the PM sector are not at least highlighting their robust project economics at somewhere close to spot prices. Wrapping up ponder if the valuations and momentum trading will come back to the PM juniors, or if this time really is different?
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