Precious Metals Investing: Bullion vs. Miners

Published on
September 19th, 2019
Duration
8 minutes


Precious Metals Investing: Bullion vs. Miners

Gold ·
Featuring Ned Naylor-Leyland

Published on: September 19th, 2019 • Duration: 8 minutes

Ned Naylor-Leyland of Merian Global Investors talks about the tradeoffs between investing in mining stocks and in bullion alone. Naylor-Leyland lays out the risks associated with investing in the different parts of the gold and silver markets, and explains why a position in miners and bullion alike can expose one’s portfolio to massive returns in the event of a major trend reversal. This clip is excerpted from a video published on Real Vision on October 22, 2018 entitled “Silver and Gold in the Modern Portfolio.”

Comments

Transcript

  • NS
    Nir S.
    5 October 2019 @ 18:53
    This makes a lot of sense. Real inflation is not what is reported, because of real inflation the cost of operating a mine increases in dollar amounts but the gold price which is influenced by reported inflation does not rise accordingly. This causes mining companies to be outperformed by a lot of other sectors, it's really killing the mining industry. Additionally these mines will still operate at a loss because halting operation has the cost of upkeep while the mine is not in operation which is higher than the loss they are creating which eventually drains capital. Internally in the sector this causes M&A, where bigger mining companies buy smaller ones that have less capital to operate but might be sitting on big reserves and potentially big resources. They typically buy these small companies at a discount creating an upside for the bigger companies. Once the public realizes the inflation and gold & silver prices rise, little by little new capital will come to the sector of mining equities giving these big companies the captial to mine these reserves & resources.
  • JS
    James S.
    2 October 2019 @ 00:51
    Can anyone post links to the studies he is referencing? I could see his point on costs rising 9% per year if he were discussing education or healthcare, but I feel like just stating this without hard data is tenuous at best.
  • MM
    Miikka M.
    25 September 2019 @ 13:29
    He does have a point in averting individual gold mining companies but one must be very suspicious of a person stating that the average "real inflation" in the last decade was 9 % per annum without any reasonable explanation or thought process behind it.
  • CW
    Connor W.
    20 September 2019 @ 16:32
    Great interview