Michael Gentile: Gold Stocks Are Only Industry Beating Inflation Today
Tom welcomes back Michael Gentile strategic investor and President & CEO of Consultant Finaciere Integritas to the show.
Michael discusses the Fed’s inability to act in the current environment and argues rates should be moving higher but the Fed is rapidly losing credibility. If they don’t provide a timeline for tapering then they risk damaging their reputation further. Inflation in wages is skyrocketing creating imbalances which will last for some time. If the Fed wasn’t buying debt rates would be much higher. As a result, we have negative real returns today.
This issuance of money in circulation has created the illusion of economic growth but soon we will realize that lower growth and high inflation are here to stay.
The US dollar is one of the better houses on a terrible block. If everyone is printing then gold will inevitably rise. He remains very bullish on the precious metals. When compared with equity markets, gold has excellent potential to move significantly higher. Gold stocks are currently discounted when compared with gold which represents a terrific opportunity.
Gold remains unattractive when there are regular big gains in other markets. Speculation is rampant and this pulls attention away from gold. When markets do correct you will see many of these speculative markets become annihilated. Some may never recover. That’s when people will become aware of the utility of gold.
He discusses the geopolitics of oil and why many of the green energy programs are quite unrealistic. Today, few want to invest in the oil sector, and eventually, a market starved of capital will be a large opportunity.
Copper remains an interesting sector and the world will need a lot more of the metal if green energy demand of politicians are to be met.
Michael discusses the primary importance of geology in juniors and why he looks for flexibility in their management teams.
Time Stamp References:
0:00 – Introduction
0:34 – Fed Trapped
1:37 – Rates & Inflation
3:58 – Inflation Causes
6:31 – Deflationary Periods?
9:07 – Treasuries
11:28 – Dollar Long-Term
13:22 – Metals Outlook
16:20 – Speculation & Risks
23:25 – Other Sectors?
26:42 – Copper Markets
28:48 – Portfolio Balance
32:00 – Geology & Management
36:00 – Seasonality
37:30 – Uranium Plays?
39:20 – Wrap Up
Talking Points From This Episode
- Fed cornered and will be unable to taper if markets falter.
- Inflation and the outlook for treasuries and the dollar.
- Expectations for gold and other commodities like copper and oil.
- Importance of geology and having flexible management teams.
Michael Gentile, CFA is President and CEO of Consultant Finaciere Integritas. From 2003 to 2018, he worked as a professional money manager at Formula Growth Ltd., an independent investment management firm established in Montreal in 1960 with a long-term track record of creating investor wealth. While at Formula Growth, Mr. Gentile’s main sector focuses were on mining and natural resources. In 2012, he became the co-manager of the Formula Growth Alpha Fund; a market-neutral hedge fund focused on small to mid-cap equities. Throughout his Formula Growth career, Michael was an early-stage investor in very successful mining and natural resource investments returning multiples of their original investments for their investors. In October 2018, Mr. Gentile retired from full-time money management to spend more time with his family.
Subsequently, he has remained a very active investor in the mining space, owning significant top 5 shareholder positions in over 15 several small cap-mining companies. Michael is one of the largest shareholders and was recently appointed as a Strategic Advisor to Arizona Metals (AMC-V) in December 2020. Michael is currently one of the largest shareholders and was recently appointed a Radisson Mining Resources Director (RDS-V) in February 2021. Also, Michael is the largest shareholder and has been a board member of Northern Superior Resources (SUP-V) since December 2019, Roscan Gold (ROS-V) since January 2020, and Solstice Gold (SGC-V) since June 2020.