if you held mining stocks for 50 years and I held gold I did over eight times better than you [Music] right hi everyone and I want to welcome you to this video on precious metals versus the mining stocks and I've got Alan hibd with me once again Alan how are you doing I'm great Mike thanks how are you great so we're going to start uh with a chart uh and this is uh from incrementum AG the inold We Trust report uh and it's uh the stocks versus gold going back to the beginning of this


century and uh it shows the performance of gold and the performance of the uh gold and H it's the Hui uh gold mining index now the Hui is the unhedged miners where they haven't uh sold too much uh production forward or uh taken out Futures contracts that they're going to deliver to in the future uh and it's indexed to 100 so it's it's this entire Century uh you got any comments on this what what do you think about it well yeah first of all like you said they're both indexed to


100 so you can see at the very end of the chart whichever one is higher has a higher performance overall and right now that's the physical metal however we do see some pretty steep rises in the shortterm and so sometimes in the short term miners outperform gold but in the long term they don't right I feel like you know if you get the proper advice and you PR pick the proper stocks and it's at the proper time it has to be at a at a bottom you have this potential of vastly outperforming goal


so we've got uh gold here up seven so a factor of seven from um well actually this would be six times right a six times increase yes it starts so at at 700 it's gained six times over a factor of the value of 100 where we're starting it and so um uh but what I see here is that the stocks might outperform uh Gold by gold goes up a 100 bucks the stocks go up 300 bucks so you got this three to one leverage but then on the way down you got four to one leverage and over the long term it just


doesn't work out another thing that I want to point out is uh that uh there's there's all of these potential games 100 if gold goes up 7% uh the stocks might go up 193% and as that well might be true um they're taking the alltime high of 2011 in the stocks and then the all-time high of uh 2020 in the metals and sort of ignoring the fact that uh from the lows in 2015 if if this held true and it was sort of you know something tested in history and and history sort of giving it its stamp of approval yes


this is somewhat guaranteed it it has a probability of happening more than a possibility of happening then from these lows uh gold went up and from its 2011 High set broke that 2011 high and set a record but uh the stocks came nowhere near that they way way underperformed the potential promise that existed then uh and so you know you and I took a a much deeper dive into this for the book uh first I want to go and show this exact same chart now this is from uh Nick L of gold charts are us and it's


the exact same chart but with one more data set added the old the last chart just had the Hui this also contains the xau Philadelphia gold mining index which is the large mining companies and that one contains more hedged mining companies than unhedged where they have sold future production uh and they have they do uh uh take out Futures contracts where they sell a Futures Contract into the market and promise delivery uh some date in the future and then they deliver into that contract and and uh what you


see here is the xou from from the beginning of this century is up 69% the Hui is up 203% and gold is up 573 per. so this includes all of and one of the things here the Hui has never during this whole period of time really outperformed gold uh and so um I contend that you really have to get good advice so if you're going to be buying mining stocks you should try and pick a stock analyst that has a track record of uh of doing good picks and uh that you have to do it at exactly the right time like here in 2000


the bottom of the 2008 CRA crisis the global financial crisis the crash now what was interesting in that crash is gold bottomed in October uh of 2008 gold and silver but the stock markets didn't bottom until March of 2009 so if you had waited to uh and you know it becomes very difficult to measure all of this and try and exactly nail the bottom how I mean I did buy a whole lot more gold down in here and a whole lot more silver mostly silver when gold and silver bottom I got silver at an average price to I I doubled my


position and my Silver Purchase was at 11 bucks an ounce and I doubled my position in silver the average uh it got down to the high sevens I believe during that pullback uh so uh this just shows again that it seems like the stocks might be leveraged you know uh two times uh for the xaou going up but three times going down and maybe four times with the Hui going up but six times going down so over the long run it never works out and you and I this is another one of those charts that I drove you nuts with Allan


uh where you made this and presented it in different formats uh several times and then we updated it and this was uh done uh probably about one year ago because that's about when we were wrapping up all of the data that we had gathered and updating everything and about to produce the book so uh all the charts that we had generated over the past four years all had to be updated with the latest information in the months going into the final uh closing of all of the writing of this book and get updated and here again you've


indexed at 100 so Baron's gold mining Index this goes back in into the 30s but there was no reason to present it when gold was still pegged to the dollar at $35 an ounce and the gold price wasn't moving so you selected August 13th the last uh trading day where gold was actually $35 an ounce and we we you indexed everything at 100 back when gold was $35 an ounce and we have the performance give me some input on you think but you worked on this chart a lot and and others like it so give us


exactly well I'm happy to so just like you said this chart like the other two we've looked at today is index to 100 so everything gets the same starting point on the left side of the chart if you want to know which one did better overall you look at the right side of the chart and just see which one is higher on the page so very simply it's the Gold Line it's gold outperforming the mining index by a lot if you only look at the spacing it looks like the blue line is about half as high as the


yellow on the right side however it's not a linear chart it's logarithmic so you got to look at the numbers so it's really not a doubling in performance it's uh about a fact have to divide 4,000 uh to round this into you know since we rounded this up uh this 4 400 the 3,933 into you divide it by 460 and you get the how many times it would outperform correct yes it's more than eight so if we take 4,000 compared to 500 that's more than eight times the performance over the last 50 years


that's Grainer and then I had you do it in another format where you simply uh divide the lines into each other and you end up with this and this is if you're paying for the baron gold mining index in ounces of gold and then you want to so if you had put in 100 ounces of gold at the be in 1971 on the first trading day when gold was 35 bucks an ounce the gold mining shares would only be worth 12 ounces of gold at the end of this chart which means that the gold outperformed the stocks by a factor of 8.33 correct have


you got anything to add to that no you're AB absolutely right so basically if if you if you held mining stocks for 50 years and I held gold I did over eight times better than you right with uh I want to point out with almost zero risk this is the important thing about gold and silver the risk is is close to zero I always you know I um wrote years ago and we made a video on it the gold and silver come with a central bank guarantee the guarantee isn't that gold and silver will go up the guarantee is that the dollar will always


go down because they're going to create more of them that is the guarantee you can't have a commodity that is also money uh priced in that currency that they're always diluting the currency Supply and stealing purchasing power out of it when they're devaluing the currency Supply and money the gold and silver are measured in that currency then uh they eventually it's a guarantee that eventually they have to go up now a couple other things I want to say about uh you know I think I'll go back to one


of these earlier charts hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are Sharp delivery is fast and we have an insiders program where you find out exactly what I'm doing with my own Investments thanks for making gold silver.com your dealer and now back to the video about the mining companies uh


is that the especially the Juniors they are the greatest inflators on Earth you think a central bank can print currency wait until you see the dilution of the stock shares of these mining companies especially the Juniors which have to survive by doing private placements and diluting their stock float uh I you know in in 2020 2020 2019 2020 2021 I accumulated I think 13 uh um explorers uh junior mining companies and a lot of these were with um a bunch of professional input from stock mining analysts or buying uh things things


where for instance Eric Sprat of Sprat Asset Management had purchased uh uh private placements in these companies I he's been a very he's navigated this thing very well and become very very wealthy off of the precious metals bull market but uh the uh buying some of the same stocks as he had and then stocks that were recommended by uh highly qualified stock analysts uh those those stocks are down somewhere from 50 to about 96% over the last three years uh I have one that is up and that one is a


complete accident a neighbor introduced me to one of her friends uh and he lives just about three blocks away from me and I took a look at his company and it's a uh silver Explorer and producer uh in the United States and I bought a private placement in that as well and it's up about 50% now what I do have to say is the reason that I bought a swath of these things I always considered them something to do with your gambling currency now I had um uh years ago on this first uple you know I started


investing in uh gold in 2002 and uh actually it was October of 22 to and then I discovered silver in April of 2003 and I and I started buying silver and then I bought and it went up and then I started buying silver stocks later and I caught this last big upwave in gold and silver mining stocks and I had 53 of them and uh a few of them uh went under completely others merged and and got bought out and you end up with shares in a different more shares in a different company or whatever and then um uh the uh I had one qua was it was


called where it was a uh silver uranium producer and it did phenomenally well I sold in several tranches uh because we went through this crash in 2008 and the stocks just practically went to zero and then when they bounced back i s i I had done this is what caused me to do The Baron's gold mining index study and divide it by the price of gold nobody I had never read anybody that had done that but I found this uh this long-term mining uh company index and I divided it by the price of gold and what I discovered that was over the


long over the long run uh you're not typically not going to do well on the mining stocks compared to just being in gold and so when this bounced back I don't know where I did this study somewhere in here I started selling tranches and I sold all of my mining companies up in this area and it was just dumb luck this wasn't it was because the crash had punished me enough for me to do some research and uh and I sold most of them and this company quat Tera uh one of the tranches that I sold


I got 40 times my uh investment back now when I sold all of the tranches I think I ended up with about 15 times my original investment but that and a few others um just I think with like three or four of the 53 I had invested in I made more profit on those than than my entire investment in all the stocks and there were several others most of them ended up with a profit because I sold in the right area if if I had them right now I would be sitting on severe losses from my original investments back in this


time frame and so uh um to me uh unless you have gambling currency and you want a seat at the blackjack table or the roulette wheel if you want that then invest in mining stocks which have the risk of an EPA uh shut down or delay a mind collapse a labor strike bad management the the list of risks goes on and on and on name the list of risks with gold or silver that you can hold in the palm of your hand when you actually own it not some ETF when you act or or futures or options that you can actually hold in


your hand that has no counterparty risk can't experience a mind collapse a labor strike an EPA shut down uh you just there there isn't anything that you can name counterparty risk like for instance if you hold a stock uh that per that company has to perform well and not only the company but your brokerage platform has to be in business uh so uh pretty much everything in life contains more risk than gold or silver got any input on that I think that's a great point to finish it off yeah uh gold is money


everything else is credit yes yes well I want to thank you Alan for helping me analiz these and thank you so much for putting all those charts together for the book and doing the research that uh gave a background to all of this yeah my pleasure happy to do it and looking forward to uh many more exciting charts and analyses in the future thanks we'll see you next time hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win- win win 11 one one one 1 o


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