gold news

 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Garrett Goan founder of golden portfolio thank you so much for being here thank you Sher nice to be here yeah really good to have you and it's our first time talking so very exciting I thought just because it is our first time speaking we could start with just a brief introduction to yourself and your your work in the industry yeah sure um you know I work with stanbury research and Gold stock analyst for 15 years I just

went on my own to bring you the truth at the golden portfolio originally from Boston from the traditional Finance industry uh MBA from Babson College uh CFA Charter holder and uh CMT uh technician as well but you know I follow the data I follow the money um that's where I find the opportunities yeah so going out on your own really it seems at quite the perfect time for this I've I've been following you and I know you said recently gold stocks are the cheapest they've been in decades so where do you see the best

value right now among the gold stocks yeah so right now you have gold at $2,900 an ounce you have gold stocks that GDX has done okay you know it's up 20% last year it's up a little bit this year but you need to dig deeper and if you start looking at these companies uh based on a free cash flow basis uh using the current gold price these miners AR undergoing a stealth gold crash you're able to buy dollars of value for dimes and quarters and the only other times the gold Sox sector was this

undervalued um was uh 2020 and 2015 both major sell-offs in the market and that's why I call it a stealth gold Crush because we haven't had a major correction in the market and the gold stocks are trading at crash type valuations yeah maybe you can talk a little bit more about that stealth Gold stock crash because I was in your presentation this morning as I was telling you before we turned the camera on and it makes sense when you explain it but it wasn't what I was expecting to hear um you got to dig deep uh when

people use the chart of gold versus a Gold stock or the GDX um and you know the alligator that's going to close where the gold stocks are going to catch up that's never going to happen because you're comparing apples and oranges um you're comparing gold which is the world's you know resered currency for a thousand years um unencumbered um it basically is very little cost um and versus gold stocks and all stocks I don't care whether it's a Gold stock or Google or Amazon or whatever it's all

valued off free cash flow per share profits you need to be increasing profits on a free cash flow for per uh cash flow per share basis to drive the share price higher that's what ago's done if you compare a chart of ago free cash flow per share versus a stock price it follows each other there's a 96% correlation between free cash flow and the stock price so you know that's what I follow and you need to dig deeper you need to look at the underlying valuation of how much profits you're getting for

each share versus the valuation either looking at market cap or Enterprise Value um so right now people are looking at the gold price 2900 they're like it's expensive people are look at gold stocks they're like well gold stocks must be expensive too we're the exact opposite end it is it's really weird um there's the buffet indicator that I talked about uh the buffet indicator talks about uh shows compares the Willshire 5 thou broad market index versus the underlying G US GDP um it's as overval well with

much more overvalued it's at a peak the uh there was a previous peak in 1970 there was a uh peak in 2000 there was a peak in 2020 and now there's a peak now both of these Mark major uh overvaluation of the sector Warren Buffett can't find Value in the traditional growth companies because it's overpriced um but what this overvaluation also shows it shows we're at the cusp of a secular shift from growth to Value because you're able to find Value in the cyclical companies that's why I stated my presentation

Buffet is coming for Numa numont if you look at free cash flow per share versus uh Enterprise Value numan's trading at a 50% discount to free cash on a on a regression um it's never been this undervalued ever it represents an extreme opportunity and a value investor like Buffett would find this attractive as well yeah and maybe we talk about that's very interesting so maybe we talk about some of Warren Buffett's history when it comes to gold and gold stocks because everybody knows his quotes about

gold but gold Stock's not necessarily the well see that that's when I say that you know it doesn't matter whether it's a Gold stock or Amazon or Google it's all profits it's all free cash flow I don't care whether it's a gold company or a tech company you're buying profits at a by investing in the gold sector Warren Buffett got invested with barle in 2020 2020 was one of the peaks of the Buffett um cycle uh and then you know we held it for a few quarters but you know

there's no value in the market right now and there's extreme value in the gold miners one other thing regarding the buffet index if you look at the years of the major Peaks uh TW uh 1970 and 2000 that was also a peak in the dollar right so this is this shows you that there's a big secular shift going on right now um that in Trump and Scott bent the treasury seary said we need a lower dollar right that's what's going to be happening they're going to be managing the dollar lower we're going to have um

commodity companies we're we're at right at the cusp of a good commodity cycle driven by a lower dollar and you get the gold price to $2,900 an ounce seems expensive but based off 1970 and based off 2000 it's not expensive because uh both those times before gold went on a 10x run over the next 10 years and I look at sentiment in the sector as well right um I follow the money I look at shares outstanding of the GLD it's an ETF so when money comes in shares go up when money goes out shares go down uh

the GLD shares outstanding just up ticked a little bit for the first time in like years just this past week it shares outstanding is hundreds of millions of shares less each representing 10 a tenth of ounce of a gold uh than previous Peaks and these bull Mark these bull markets all always in with all the investors piling in all at the same time driving it higher for a brief period of time and then that marks the top and you can see that in every chart when the shares outstanding rips higher and we're at the exact opposite

of that the GLD ETF uh had more Assets in it than the Spy the broad Market etsb 500 ETF in 2011 now it trades at 12% of the value the GDX ETF during the ramp up uh to 29 $0000 an ounce gold the GDX shares outstanding sold off 20% plummeted tanking it is it's an absolute stealth bare Market uh crash in Gold stocks right now in the sentiment it people think it's overval because it's so nobody is invested we're the exact opposite of what people think really interesting and just just continuing on

the buffet is calling for newon idea are there any other go and stocks that meet his criteria or is this solely a new no you're like you're asking the perfect questions all right so the lon curve right you get the TR Lon curve I run the golden portfolio the golden portfolio finds value in the TR laner first valuation tro is that first drill hole and then it takes years to prove out the resource uh build a reserve um and you know the stock ramps up it takes years stock ramps up over that time it goes

through financing um often deluded they got to raise Equity although the past couple deals have Wheaten uh took down with Rio um and then montage um that were really shareholder friendly um and it was great to see but take a look at take a look at Montage or Rio so Montage they have con it's worth $2 billion you know what the stock trades at 400 mil like these are profits that you're getting at $2900 an ounce of gold like $2 billion worth of profits the stock only trades for 400 mil the lon curve

teaches us that miners are worth the most on day one of production right why because they mine and as they mine their reserves drop so it becomes worth less and less and less every single year that's why a lot of institutional investors don't like the sector and avoid it but you're able to spend 400 mil and get $2 billion of value back from it Rio Alto you're able to spend 200 mil they have Phoenix that's worth a billion at 20,000 tons a day it scals 4X to 80,000 so the nav could increase 4X

but you're buying uh dollars worth of value for 20 cents and like I said doesn't matter it's it's profits at a discount and that that th this these valuations show where we're at and the whole mining cycle because you know when we start nearing a top that we're going to see you know the market cap and the EV of these companies rise above their true nav value right now they're selling at a 80 90% discount to their true value yeah and maybe it is a good time to ask you okay for gold where are we in that

cycle specifically anything you can add there yeah no just um I presented in Germany in November and I had a really good feeling Trump was going to be good for gold why because America loves the truth uh Trump wants to bring America the truth and gold represents the truth um I Scott bassant was going to be treasury secretary one of his major Holdings was gold I think he sold it since to become treasury secretary one of Trump's uh uh economic advisor was Judy Shelton uh who tried to n to the board of Federal

Reserve last time she is uh she she proposed a 50-year gold back bomb but see Gold's the only thing that can help the United States right now they need to devalue the dollar but they need to maintain treasury Demand right you get China selling treasuries they haven't bought a treasury in 10 years um sh Russia obviously doesn't own any treasuries the Cayman Islands a quasi government hedge fund is like the fifth or sixth largest holder in us treasuries why because um these the Cayman is a lot

of of offshore US Government hedge funds buying us treasury debt to provide the demand to keep yields low because we have 37 trillion dollars of debt all Finance the short end we need need to move to the back end gold and the other thing um gold is a superior asset to treasuries as far as a store value for countries why because if you run a file of US foreign policy and you own billions of treasuries Scott bent presses a button and boom your access to it is gone billions gone whereas gold you hold it in your central bank it's

guarded by your military no one's taking it unless they take your country over uh so yeah um you know the nations are going to Gold um there's a tremendous amount of demand um and that's been the re that's been the recent run on the gold price but you know you look back to the buffet indicator right 1970 2000 uh the dollar was too strong they weakened it and we are at the the top of it so even a gold to $2,900 an ounce like I can't even imagine how far it might go yeah of course I was going to be one of my

questions you know what is the price potential for gold and right now we just we just don't know I it's like I can't quantify it I can measure investor sentiment no one owns a GLD nobody owns gold stocks and at the peak you know there's Peaks where it's been up to uh 15% of all you know traditional investment assets and we're at the other end of it so I you know I believe we have a long way to go yeah interesting you mentioned that lack of interest in gold and one of the questions I think a

lot of people have is okay all right how does that interest come back in is it something like Warren Buffett doing this Newmont thing like what what is that um the deal I was talking about this at one of the other conferen I was at but one of the persons believed you know the gold industry needs better marketing and yeah I'm like all right marketing I'm like they're like you know they need marketing they need sexy marketing I'm like you know what sexy money profits that's what's that's what investors seek

and the average money company has not been able to increase their profits on a per share basis that's what investors want they haven't been able to do it mining is a tough business but at this point the value in the sector is going to be so compelling that the value investors are going to start coming you're going to see some headlines you're going to see the price of gold stocks moving up and then as the price starts moving up it's going to start chasing all that all the fast money and

Retail investors are going to start piling in and then you know like crypto tokens crypto tokens have billions of dollars of of value with a trumpcoin A millenia coin they have like nothing backing them and you can come out and create I could create a coin like after this interview's over um but the thing regarding the gold reserves and gold explorers at least you got gold back in it you know what I mean so and there's no money in the sector and I believe there's going to be a time when you know

reality sets in and the compelling re compelling Val value opportunity it becomes apparent and people are going to Pile in that kind of ties into another thing I was going to ask you would you go down the chain to the juniors in Gold yeah you know it's start it's going to start off with numont um baric Ken rag Niko Anglo gold uh the majority of them are trading uh at close to fair value numot brings them down the average large capap miners trading at a 20% discount to fair value based off free cash flow

right now um and the thing is it's like in my presentation I talked about um you know like playing blackjack right you count cards you count tens you count non-s you know the deck is stacked with teds so the odds are heavily in your favor that you're going to get 21 blackj and the deal is going to break so you load up and you don't always win you know sometimes you lose but the odds are in your favor and right now everything I look at the odds are in our favor because you have a free cash flow line

that's up here you have the stock price way down here um and usually the stock price is above the free cash flow line uh and you know free cash could come down production could fall all in sustaining cost could go up the gold price could fall uh but you know more often than not when I found the deck stacked in my favor like this in previous opportunities within the gold sector as well good things happen okay and just to go back to the Trump Administration and you'd mentioned there are people who think favorably

about gold who are behind him yeah is is that a signal that this Administration is going to be more favorable toward gold you know we have all these things going on like the Fort Knox gold audit the Tariff CLE coming in what do you what is your sense yeah isn't it crazy it's it's very crazy it's like every day and then I've been busy today I haven't been able to look and then on Twitter Elon Musk is tweeting more stuff the Bitcoin Reserve just came out but that that's why the us is going to revalue

gold on their balance sheet right that they hold at $41 an ounce at 70 to the current gold price or maybe higher I don't know but then that creates an economic surplus right and you know an accounting Surplus they're going to use that to establish their Bitcoin Reserve so they don't have to print any money or use any extra money they're going to revalue Gold um and then you know there's so many things going on you know Elon mus tweeting out about Fort Knox and the golden Fort Knox it's just it's

obvious something's going and Gold's the only thing that solves the government's problem to have a lower dollar to maintain stability in the treasury market and to keep the world's um world reserve us as the world's Reserve currency gold is the only thing um that the US you know Trump can do and bent can do to maintain faith in the dollar while devaluing the dollar at the same time versus the other other currencies really good to go over your thoughts on gold anything else that you're watching

in the gold industry right now there's so much going on what would you pull out I don't know the the extreme discount uh that Newan offers right now is going to provide fuel to the fire I just think the average investors sees gold too high they believe gold stocks too high you need to dig deeper into the profitability the extreme so I saw a lot of presentations today showing profits in free cash flow per share based off on the fourth quarter the fourth quarter's gold price was like I don't know $2,300

an ounce no one modeled it for forward to the current gold price I model thing off of the gold price on a daily basis the the free cash it goes through the roof and I just think the um the spread between reality and perception that's the opportunity you know the the perception is Gold's too high gold stocks are too high they're bad investment whereas the reality is they've never been more profitable and they've never been more highly um discounted so value investors are going

to be attracted to the sector whether like whether or not they like gold or not yeah so that's the message and I know I know it's called Golden portfolio but before I let you go any other not those Commodities that you like right now n you know copper I like copper I like gold copper big pore um those are the ones I follow some of the other industry you know they follow lithium and uranium um it's it's just you know they go up they go down it's a little too speculative to me I I like stay in

the course you know in my gold and silver miners all right yeah all right well I think this is really good I feel like I've got a pretty good grasp on what you see coming any any final thoughts you would leave investors with uh no but it just you know the buffet indicator right it's all tied together the buffet indicator shows a secular Shi between growth in value and growth in ccals um the dollar was the peak when the buffet indicator peaked and we're at the beginning of a secular trend of a

weakening dollar and which is uh going to be a great time for you know all Commodities okay well I think that's a solid place to end it on thank you so much for for taking the time to come by this is really good excellent thank you Charlotte thank you and and once again I'm Charlotte McLoud with investing.com and this is Garrett goet [Music]