Interview with Marin Katusa on gold, uranium, bubbles and Baby Boomers money
Published on May 17, 2017
In one day in April, more cotton was traded in Shanghai than the whole year previously. It would be enough to put a pair of pants on every person on the planet. There is not enough cotton for that. In one-day soybeans, speculators traded 32 billion servings of soy. We are talking about insane speculation that Chinese money is fueling.
Gold Growth Per Share strategy is the stuff you want to look at. Gold Mining Inc. (GOLD, former Brazil Resources) is the best in this crucial metric of growing value for shareholders and has one of the best management teams available. You don’t need to own 20 stocks. What you want to own is the companies with the best management teams. Because every piece of crap is getting financed again and people are feeding the zombies. Narrow down your portfolio. I don’t believe you should be diversified and own the basket. You need to bet on the best. If the president is not owning a bunch of stocks I want to get out.
Uranium is a victim of emerging markets currency devaluation, especially Kazakhstan. Even though the price of uranium has stayed the same their costs have decreased significantly as they are paid in foreign currencies. They have currency advantage. Further, you have Japan turning on their nuclear reactors very slowly and the Chinese buying uranium directly from the mines. What have I done? I have bought another million shares of UEC alongside JPM and Rick Rule’s fund. You have to think as the owner of the company. Most of the companies are depleting their reserves and this is the reason why I invest in Uranium Energy Corp.
Inflation, Deflation confusion playing out in favor of gold
Negative interest rates are going to dry up capital hence by definition will be deflationary in most markets. But you will have pockets of insane inflation or bubbles. For example where I see gold headed. People will start parking money into gold to protect themselves against negative interest rates. Risk is directly associated with the price you pay for the asset. We are not yet at the bubble in gold but it will come. And these stocks that went from 75 cents to $1.50, they are going to $15 (referring to gold mining stocks like GoldMining).
Baby Boomers assets allocation change can be explosive for gold market
If you look at the demographics globally. The baby boomers have money. And they are looking at preserving their money. They are going to retire; they want a little for their kids and enjoy their life.And they are going to live for much longer thanks to medical advances. So what are they going to do? They want to put their money in places where it will be safe. And gold is definitely one of those areas. And right now gold takes such a small piece of the money looking for safety.
The amount of money that has entered the gold market, if that percentage of global allocation which is now 1.15 %, if that percentage goes to 1.3% for Baby Boomers, the price of gold doesn’t double. It will be exponential, you are going to see $4000-$5000 gold. And we are only talking about 1.3%.