John Newell: The Gold Stocks are Only Just Getting Started

John discusses how historically gold will often go through long periods of sideways action and then breakout fairly rapidly once overhead resistance is overcome. Eventually, there is a waterfall decline, and then the cycle tends to repeat. Today there is little overhead resistance left in gold.

His focus is on companies that demonstrate leadership in their respective markets and those that have very dedicated management teams. You want companies that are trying hard to advance a story. Those that explore near existing mines often have a higher chance of finding something of interest. There are some tremendous geologists in exploration, doing fantastic work.

John relies on technical analysis and charting to determine when a given equity has reached a potential top. When the mainstream media is moving into a sector, and everyone is starting to get on one side of the boat, his contrarian nature tends to kick into action.

He lists several books and authors that he thinks are important for investors. One in particular he recommends is the “Gold Wars: The Battle Against Sound Money by Ferdinand Lips” which deals with the abandonment of gold-as-money under the modern state.

Hardly anyone is looking at this space, when many do the moves can be explosive. Many companies are far behind the gold price right now, and there is much upside if you are selective and look at individual stories.

Time Stamp References:
0:40 – Historic patterns for gold.
4:25 – Strategies for playing juniors.
7:10 – Find good exploration stories.
12:10 – Finding the end of the bull market.
14:20 – Favorite books and authors.
17:10 – Gold equities have to catch up to gold.

Talking Points From This Week’s Episode

  • When overhead resistance breaks, not much will stop a market.
  • Look for companies with dedicated management teams.
  • Interest by mainstream media might be a sign of a top.
  • Few investors are in the gold space so far.
  • There is much upside if you are selective.

John Newell is Portfolio Manager for Fieldhouse Capital Management. He has 35 years experience in the investment industry acting as an officer, director, portfolio manager and investment advisor with some of the largest investment firms in Canada including Scotia McLeod, CIBC Wood Gundy and Richardson Greenshields (RBC Capital Markets). John Newell joined Fieldhouse Capital Management as Portfolio Manager of the Global Precious Metals Program. Specializing in precious metal equities and commodities, John follows a disciplined proprietary approach incorporating equity research, analytical frameworks, and risk controls to evaluate and select long and short stocks primarily from the Canadian small and mid-cap coverage.

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