00:00Axel, talk a little bit about why you think we saw such a surge, first in gold and now more recently, silver, which is now outpacing gold.
00:08Is that all pretty much an issue of what's been going on with the macro side of the economy, all that what's been going on with interest rates?
00:17Well, I think there are two components. Great to be with you, by the way.
00:20One is fundamental and one is more human nature.
00:25On the fundamental side, the one aspect I think that's been underreported is that when trade is impeded, when a wrench is thrown into the global trade machinery, it's not just the flow of goods.
00:40It's also the flow of currency that's affected, meaning that foreigners are disincentivized to own treasuries, pushing up borrowing costs in the U.S.
00:49And of course, then the right reaction would be because deficits need to be financed more domestically to lower deficit spending.
00:56And instead, what's happening is pressure has increased on the Federal Reserve.
01:00And that wrench that's thrown and ultimately, that is what drives the exorbitant privilege to be ability to kind of borrow cheaply in the U.S., to invest for higher returns abroad.
01:13It's a process that gets disrupted.
01:16And because the gold space is in precious metal space is fairly small, we can have outsized impacts.
01:23The weaponization of the dollar impacts it as well.
01:26The other side of that is the speculator.
01:29For several years, the speculator was busy with meme coins, digital tokens, SPACs.
01:36And historically, the speculator is in the precious metal space.
01:41They have come back.
01:42And the key contribution they make is that to add volatility.
01:47So we have a little bit of both.
01:48Fundamentals are impacted, the macro aspect.
01:51And then, yes, they are technicals or speculators, whichever way you want to frame them.
01:56How do you protect yourself?
01:58I mean, you're someone who's had an extraordinary year investing in gold, but also the mining and miners around that.
02:05When you're at this new peak, what do you do to protect your downside?
02:09Well, for better or worse, we have a mandate.
02:13And so we are kind of stuck in what we do.
02:16But by all means, we do, of course, have the questions come up internally.
02:20How do you manage risk in this sort of environment?
02:23And I can't, of course, speak on behalf of what individual investors do.
02:26What we do on the mining side, which is a big chunk of what we do, is we focus on management teams.
02:35The scarcest resource is not gold or silver.
02:39It is good management.
02:41And so by being in the right stage of the growth where one supports them, one has somewhat of a protection and downside.
02:49But, of course, if you're in the space, if we were to have a significant downdraft, then by all means, yes, you would be affected as well.
02:59Of course, you can buy protection.
03:02The implication of that is, of course, that you underperform in the bull market.
03:06And so it ultimately comes down to what is your risk tolerance, what risk can you afford to take and what you want to take.
03:12As far as we are concerned, we're mostly interested in communicating of the decision we ultimately make so investors can make their choice based on that.
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