Matt Geiger: Gold & Silver Bull Market Still Has Lots of Room Left to Run
Matt discusses the nickel market and its performance over the past year. The long-term demand picture looks good as E.V. adoption rates continue to grow, and Matt suggests that lithium-ion batteries should instead be called nickel-ion batteries. He thinks the market will embrace the improving nickel narrative.
The recent surge in nickel prices has nothing to do with this demand narrative; instead, it has everything to do with the Indonesian government banning nickel exports. Matt discusses three nickel companies and what things to watch out for in the nickel space for those looking to gain some exposure.
Matt has increased his weighting of precious metals equities in their portfolio. He is comfortable with this weighting in light of the negative bond yields occurring worldwide. His focus is now on carefully adding base metal and energy metal positions to their portfolio.
He likes the book “Liar’s Poker” by Michael Lewis and discusses the contrarian path he decided to take. He also recommends Ben Graham’s “The Intelligent Investor” along with several additional books on mining and behavioral economics.
Investors generally focus too much on when to buy instead of when to take profits. He says, “There are three reasons why you should sell.” The first is when your original thesis fails, the second is when the share price has exceeded fair value, and lastly, you should sell if you lose faith in management.”
Uranium has a lot of pessimism, as many uranium bulls are tempering their expectations after the results of Section 232. Regardless, uranium remains a long-term play.
Time Stamp References:
0:40 – Where we are in the nickel market.
3:00 – Indonesia stopping nickel exports.
5:20 – Junior mining positioning.
8:20 – Books and favorite authors.
12:30 – Determining when to sell equities.
17:00 – Outlook for uranium and Section 232.
Talking Points From This Week’s Episode
• The Indonesian governments export ban will limit nickel supply.
• Matt outlines different scenarios for knowing when to sell equities.
• Base and energy metals may head higher if a recession is delayed.
• The vast majority of investors continue to have no exposure to precious metals.
• Recommends books on Wall Street, behavioral economics, and investing.
• The uranium market has a lot of pessimism, and expectations have tempered.
Mr. Geiger is Managing Partner at MJG Capital, a limited partnership specializing in natural resource investments. The partnership is long-only and holds a concentrated portfolio of resource equities. Investments include explorers, developers, and producers of energy metals, industrial metals, precious metals, and ag minerals. Matt is a graduate of the Wharton School at the University of Pennsylvania and previously founded a venture-backed technology company recently valued at $150m.
You can find Matt’s latest Investment Letters at: http://mjgcapital.com