Bob Thompson: Fed is Playing a Game of Whack-A-Mole
Tom welcomes back Senior Portfolio Manager Bob Thompson to the program. Bob discusses the risks associated with the mining industry in light of a potential downturn. He explains that the lack of capital investment in mining, energy, and manufacturing means that the work done today won’t result in supply for a decade, so any tapering of the Fed’s policies will result in commodity price spikes due to the lack of available supply. Bob cautions that recession talk often hides underlying structural problems and affects commodities like oil that are heavily reliant on the economy, as well as gold which tends to do the best when the Fed reduces interest rates.
Generalist funds have around zero percent of their money in gold, and there is potential for tens of billions of dollars to enter the sector as gold outperforms the S&P. Small sectors like metals and uranium are likely to benefit from increased capital, as exploration and development have been neglected. Bob believes that gold, silver, and uranium all have great opportunities ahead of them and that investors should look for companies with the lowest all-in sustaining cost, as their profits will increase with any rise in price.
Time Stamp References:
0:00 – Introduction
0:55 – Background & Focus
6:23 – Risk & Regional Banks
9:43 – Fed Policy Ahead
16:50 – Economy & Markets
19:04 – Oil Vs. Gold & Demand
21:15 – Persistent Inflation?
24:53 – Bonds & Real Rates
30:23 – Stocks & Large Caps
33:18 – The Ultimate Asset
35:29 – Gold Fundamentals
37:09 – Miner Input Costs
43:09 – Institution Interest
46:35 – The Mining Clock
57:03 – Companies & Royalties
1:00:42 – Other Commodities
1:04:23 – Protecting Capital
1:07:42 – Wrap Up
Talking Points From This Episode
- Regional banking in the United States is at risk due to the Fed’s continuous rate adjustments.
- Investors should look for companies with the lowest all-in sustaining cost for gold and silver investments.
- Recession concers can lead to hidden risks, such as the historic problems like those of WorldCom and Enron.
Guest Links:
Twitter: https:/twitter.com/bobthompsonrj
Website: https://www.raymondjames.ca/
Website: https://bobthompson.ca
When Bob Thompson started university, he thought he was headed towards a career in medicine. He graduated from Simon Fraser University with a Bachelor of Science (BSc), but with his family facing financial adversity, achieving financial security became first an interest and then a passion. Bob is now a Certified Investment Manager and Accredited Investment Fiduciary professional with more than 20 years of experience in the financial services industry.
Over the course of his career, Bob has established himself as a respected portfolio manager and one of Canada’s leading authorities on customized investments. With an in-depth knowledge and scientific approach to financial markets, Bob and his team help institutions and select clients to meet their specialized financial goals.
He has won numerous awards for portfolio management, and has established himself as a sought after media resource and industry speaker. He is the author of Stock Market Superstars: Secrets of Canada’s Top Stock Pickers, a “must-read” for both investors and portfolio managers. His perspective and insights into markets have been featured in Maclean’s, the Globe and Mail and the Financial Post, and he is a popular guest on Bloomberg Canada, Business News Network and CBC News, among others. Bob is also a frequent guest speaker at international investment conferences on portfolio strategy and in specialized investments.
Bob is actively involved with the community as a member of Canada Company: an organization committed to developing and supporting initiatives that help our men and women of the Canadian Armed Forces. He has also been a licensed pilot since the age of 16, and notes flying as one of his passions in life.