John Rubino – Portfolio Management Strategies For Gold And Silver Stocks
John Rubino, [Substack https://rubino.substack.com/], joins us for a wide-ranging discussion on the macroeconomic factors driving gold and silver, along with strategies for portfolio management in the precious metals stocks.
We start off discussing how the higher underlying metals environment has started allowing for more investor confidence in the gold producers maintaining healthy margins and valuations, which is attracting more generalist investor capital flows. Additionally, now the gold development projects economics are starting to look more and more attractive. John discusses how he is still striking a balance between have exposure to the larger PM producers and royalty companies, but also have exposure further down the risk curve into the exploration stocks as “lottery tickets.”
This leads into a discussion about some of the developers with large resource bases delineated, like Seabridge Gold, and whether or not they will be acquired or built in this cycle; after sitting available for development since the prior cycle. We dig in to if the reservation from other companies to acquire them is due to jurisdiction, capex requirements, or if it is simply a lack of human capital. John weighs in on what aspects he would describe as “high quality,” and the importance of limiting the amount of portfolio positions to the companies one can really do proper due diligence on.
Wrapping up we circle back to macroeconomic factors that may drive gold prices even higher. We start of focusing in on the rising sovereign debt levels in countries all over the world, and the changes in the Basel III demarcation for gold as a Tier 1 reserve asset that more banks will be buying to gain more exposure to and diversify their asset mix. We talk about BRICS countries continuing to reduce down US dollar exposure and mitigate potential trade wars by increasing their gold holding. Lastly we reflect on the increased retailing buying, using the example of new limits on gold purchases from Costco as another tailwind for gold, that may spill over into more sympathetic investment in silver.
