David Skarica: A Huge Bull Move for Gold Over the Next 5-10 Years
David discusses some of the unique things that are currently happening in the gold markets. He was waiting for the Fed to reverse course before he felt that gold would move up and this has now happened. Interestingly gold is getting a lot of attention from European institutions since capital return from most European bonds is now negative. Gold is beginning to shine and can now compete with bonds in this environment.
There are several reasons why gold stocks have yet to move to the upside, including the ongoing bull market for equities. He feels that most investors remain complacent and unaware of where we are in the market cycle. When the equities markets roll over you will see a big move into gold stocks.
David likes John Templeton’s approach to value investing and why you want exposure to other discounted asset classes. There is a lot of leverage potential when a weak company becomes stable again since they are then able to service their debt and refinance. Especially if those companies have millions of ounces of gold in the ground.
He discusses why investors have short-term views of markets and the underlying psychology that drives people. The current bull market in stocks has gone on for so long that investors remain pretty exuberant. David says, “There is always something cheap even in a raging bull market and you don’t have to be sucked in by the psychology.”
The longer the base, the bigger the move to the upside. This means we will likely have a long multi-year bull move. Be cautious of the valuations in the equity markets.
Time Stamp References:
0:40 – Unique things happening in gold markets.
3:30 – Investors are still complacent.
5:45 – Value Investing strategies.
9:50 – Favorite Investment Authors.
14:00 – Look for cheap asset classes.
Talking Points From This Week’s Episode
• European institutions are investing in gold instead of bonds.
• Investors remain complacent due to the bull market in stocks.
• Look for opportunities in cheap asset classes.
• Avoid following the crowd and trying to time the market top.
David Skarica is the founder and Editor of Addicted to Profits, a popular newsletter known for its stellar performance in both up and down markets. Skarica entered the financial markets at a very young age and, at the age of eighteen, became the youngest person on record to pass the Canadian Securities Course. He is a regular speaker at trade and investment conferences in Canada and is a guest on the Business News Network (BNN), Canada’s flagship business broadcasting network. His work has appeared in publications such as the Bull and Bear Financial Report, Barron’s, Investor’s Digest of Canada, and Canadian MoneySaver. Skarica also writes Gold Stock Adviser, an investment newsletter for the conservative media outlet, Newsmax. David’s newest book, Collapse, is available on Amazon.com.