Adrian Day: Gold and Gold Stocks Remain Under-Owned and Under-Appreciated.
Adrian says gold was my very first investment and I’ve always had a real interest in it from an Austrian economics perspective and in the entrepreneurial model.
He is very bullish on gold. This year you’ve seen gold swing up and down several times, each time we have gone higher and had higher lows. This is a bullish pattern. It’s extremely encouraging that gold has held up well above 1300. Central banks are going to be very cautious from here.
When things are going well, people don’t feel the need to own gold. The last few months have seen increasing concern about the U.S. stock markets and their valuations. We’re not in a bubble because it lacks those characteristics, but we are high by many valuation metrics. Some people are beginning to get cautious with this market.
Gold and gold stocks remain very very under owned and largely ignored and this is key as gold has broken out above 1300. You will see more people, institutions, and hedge funds move back into gold. If gold is considered undervalued, then gold stocks are even more so.
If there is a rapid decline in equities, typically all equities will fall. In a slower decline, you will see a rotation from sector to sector. 2008 was a credit crisis, and people needed liquidity fast, that is why gold briefly sold off in 2008 but quickly rebounded. The most important factor determining if gold stocks will decline in a general market sell off is have they participated in the market gains. In the case of this market, they certainly are pretty cheap.
Talking Points From This Week’s Episode
• Gold and gold stocks remain under owned and under-appreciated.
• Hedge funds and institutions should begin moving back into gold.
• Surprised that the US Dollar has not corrected upwards at least briefly in this decline.
• Discusses resource stocks and why he has a large interest in Metalla (CSE: MTA)
Adrian Day is considered a pioneer in promoting the benefits of global investing in this country. A native of London, after graduating with honors from the London School of Economics, Mr. Day spent many years as a financial investment writer, where he gained a large following for his expertise in searching out unusual investment opportunities around the world. He is President & CEO of Adrian Day Asset Management. He has also authored two books on the subject of global investing: International Investment Opportunities: How and Where to Invest Overseas Successfully and Investing Without Borders.