Keith Watson: Unprecedented Levels of Government Spending Creating Massive Leveraged Case for Gold
Tom welcomes back returning guest co-fund manager Keith Watson of NCIM in London. He is responsible for their CQS Natural Resources Growth and Income plc, Geiger Counter, and Golden Prospect Precious Metals funds. They look for companies with successful management teams, with good projects and that have attractive valuations.
He feels the broader commodity sector is at an extreme discount compared to general equity markets. They focus on safer jurisdictions but are willing to consider projects in other countries, particularly those with excellent government policies.
Keith discusses their various funds and the advantages of each one. They were happy to have maintained the weightings in gold assets before and during the crisis. They are currently evaluating increasing their weightings for silver in their funds. Electronics demand for 5G electronics may increase the demand for silver. He is also optimistic about copper from continued need for electrification.
Lastly, he discusses the outlook for uranium and the supply constraints caused by the lockdown. Keith says, “There is extreme potential for this sector to perform.”
Time Stamp References:
0:50 – Evaluating companies and the crisis.
4:40 – Jurisdictional risks and governments.
6:30 – Fund overview.
12:00 – Hedging risks with gold.
16:00 – Oil sector and transportation.
19:30 – Uranium outlook and supply constraints.
21:15 – Geiger fund and rotating into silver.
Talking Points From This Episode
- NCIM’s funds and how they evaluate companies.
- Commodities are broadly discounted right now.
- Silver and copper demand.,
- Oil and transportation.
- Outlook for uranium.
Keith joined CQS (NCIM) in July 2013 from Mirabaud Securities, where he was a Senior Natural Resource Analyst. Before Mirabaud, Keith was Director of Mining Research at Evolution Securities. Previous to this, he was a top-ranked business services analyst at Dresdner Kleinwort Wasserstein, Commerzbank and Credit Suisse/BZW. Keith began his career in 1992 as a portfolio manager and research analyst at Scottish Amicable Investment Managers. Keith holds a BSc (Hons) in Applied Physics from Durham University.