Stijn Schmitz welcomes David Skarica to the show. David Skarica is Contrarian Investor and the Founder of Profit From Pessimism. In this wide-ranging discussion, Skarica offers insights into current market dynamics, focusing on gold, commodities, and investment strategies. Skarica views the current gold market as part of a long-term macro trend that began in 1999, with potentially another four to six years of growth ahead. He attributes this potential to global debt levels, which have reached unprecedented heights. Central bank buying and potential retail investor interest are additional factors supporting gold’s trajectory. While gold has already seen significant appreciation, Skarica believes we are only in the first or second stage of its bull market in terms of pricing.

Regarding mining stocks, Skarica is particularly interested in smaller miners near production or with strong cash flow potential. He sees opportunities in junior mining companies that can potentially increase their market capitalization significantly. His investment approach focuses on finding undervalued companies with asymmetric risk-reward profiles, preferring to make concentrated bets on a handful of carefully selected investments.

Stijn also explores energy markets, with Skarica noting potential opportunities in oil, natural gas, and even renewable energy sectors. He suggests that the ongoing geopolitical tensions and increased energy demands from technological developments like AI could support higher energy prices and create investment opportunities. Skarica’s investment philosophy emphasizes contrarian thinking, patience, and seeking value in overlooked or undervalued assets. He warns against over-concentration in any single investment and recommends diversification across sectors and careful position sizing.

Timestamps:
00:00:00 – Introduction
00:00:42 – Market Volatility Overview
00:01:49 – Precious Metals Bull Market
00:03:54 – Opportunities in Miners
00:07:48 – Gold as Ultimate Hedge
00:08:47 – Central Bank Buying
00:11:13 – Debasement and Debt
00:16:22 – Bull Cycle Analysis
00:20:29 – Gold Majors Valuation
00:24:14 – Junior Miners Strategy
00:33:54 – Oil Energy Outlook
00:43:13 – LNG Natural Gas Plays
00:50:42 – Concluding Thoughts

Guest Links:
X: https://x.com/DavidSkarica
Website: https://profitfrompessimism.com
YouTube: http://www.youtube.com/@profitpess

David Skarica had an interest in financial markets at an early age. At the age of 16, he read the small booklet “The Plague of the Black Debt”, by James Dale Davidson, which was given to him by his uncle.

David was always a sports stat nut, loving football, hockey and baseball stats, which lead to David becoming intrigued with economics and markets. David is such an avid Football and Las Vegas Raiders fan — his principal in grammar school was Bernie Custis, who was the late Raiders owner Al Davis’ roommate at Syracuse University, and the first ever African American quarterback in college and pro football history — that he also runs his own football vlog, Raiders Greats, which discusses great Raiders player of the past. He also is a soccer fan who supports Leeds Utd., as his father was born in Leeds, England.

In 1996, at the age of 18, David became the youngest person on record (that he knows of anyhow) to obtain the Canadian Securities Course (CSC) license to trade investment securities.

In the late 1990s, David felt that the market was becoming another epic bubble similar to the bubble of the 1920s, so he decided at the tender age of 20 to write his first book, Stock Market Panic!, which was published in 1998. Over the next decade, gold soared from $250 an ounce to nearly $1900, while the S&P 500 lost value.

In the same year that this book was published, he decided to start his newsletter, Addicted to Profits. The newsletter’s name was a spin on Robert Palmer’s famed song Addicted to Love. The irony was Robert Palmer recorded this song in the Bahamas ay the famous Compass Point Recording Studio, and David himself would end up moving to the Bahamas in 2005 (another Irony about David moving to the Bahamas is that his mentor Sir John Templeton also resided there).