Gold may be one of the most important investments of your lifetime
Gold is in a bull market so investing right now is simple: buy and hold. However, there is more than one way to give your portfolio the optimal exposure to the Gold asset class.
“People do not own enough gold.” That’s a bold statement coming from Kiril Sokoloff, founder of 13D Strategy & Research, a leading global investment research firm. He tells Real Vision Founder and CEO Raoul Pal why he believes the bull market for precious metals is only in its fourth inning.
The Trade: Sokoloff says you can own gold bullion, the GLD ETF, invest in gold royalty companies and/or gold miners.
- “I have got most of my gold shares in the premier quality mines. The Barricks, the Newmonts, the AEMs. We have six in our 13D Gold Miners Index.”
- “I play around with what should be the proper allocation. It just so happens at this moment that I am 50% in bullion, so 25%, say, in Franco, and 25% in gold miners. That is a pretty high ratio for the bullion, but I have owned it for a long time, I bought more, absolutely not going to sell any of it. That just happens to be what I have at this moment. As more money comes in, I am not buying any more gold, I am just buying more gold miners.”
How the hell do you allocate to a gold miner? Sokoloff points to Orla Mining (ORRLF), which has a 10-million-ounce discovery in Mexico, as an example.
The Rationale: All-in costs of gold production are under $1,000/ounce compared to the current price around $1,900/ounce, creating profit margins never before seen in the industry. In effect, the gold mining companies have become free-cash flow machines. With U.S. federal deficits growing as far as the eye can see, and the U.S. owing more to the rest of the world than any nation in history, a dollar crisis is brewing, which will launch gold on the next leg of its bull market.
Watch the full interview here. Duration 54 minutes.
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