There is currently a lot of uncertainty in the resource space, and at this year’s Vancouver Resource Investment Conference, the Investing News Network (INN) caught up with David Morgan, publisher of The Morgan Report, to get more insight.
He shared his thoughts on Donald Trump, saying that the resource sector is quite independent, but that right now investors should “wait and see.”
Morgan is primarily known in the precious metals space, specifically for his silver commentary, but INN asked what other commodities he will be watching closely in 2017. He mentioned energy metals such as cobalt, lithium, vanadium and rhodium.
Other highlights of the interview include suggestions on how investors can best allocate their portfolios, and an update on Morgan’s company, Lemuria Royalties.
Watch the video above for more insights or read the transcript below.
INN: There’s been a lot of speculation about what a Donald Trump presidency could mean for precious metals, and it has only increased since his inauguration. Should investors be worried about it? Should they be excited? Maybe neither?
David Morgan: All three. They should be excited, they should be upset and they should be neutral. And I’m not trying to be funny, although hopefully that’s a bit humorous. I think from a resource perspective … that’s kind of a sector that is going to be a need, not a want. The resource sector is pretty independent of Trump. There might be a little bit more leniency towards the mining sector in general. I’ve had questions addressed to me personally, [and] part of that will be addressed in the future in The Morgan Report, but right now I have to kind of wait and see.
As far as the negative side, there’s good and bad about everything in life, including whoever the president is. As far as neutrality, I think that’s a good place to start right now, take a “wait and see, show me don’t tell me” kind of an attitude. That’s my attitude right now.
INN: Are there other factors that might have a bigger influence on precious metals?
DM: Yes, there are bigger influences, and that’s supply and demand and the overall economic conditions not the only in the US but in the world as a whole.
INN: You are known for being a precious metal expert. But The Morgan Report covers other commodities as well. Can you tell me what other commodities you’ll be watching closely this year?
DM: Just kind of a brief history. We were the first in the rare earth element space. We wrote about it before anybody else, I was very early on the cobalt story; we’ve written [on] molybdenum and lithium. In the next issue of The Morgan Report, which will be February 2017, we’re looking at what we call the energy metals — we’re looking at cobalt, we’re looking at lithium, we’re looking at vanadium. There will probably be a piece on rhodium in a month or two. So in The Morgan Report it’s not just silver that we look at.
INN: Of course. So there are a lot of different commodities to look at. There are lots of different companies. How can investors best allocate their portfolio? Do you recommend X percent in stocks, X percent in physical metal?
DM: Absolutely, I do recommend X percent in physical, X percent in stocks. And within the stocks section, top-tier, mid-tier and speculative situations. It’s all outlined in how to use The Morgan Report, which is a PDF file that we update every year or two to develop an approach that mitigates your risk, helps you maximize your profits and lets you sleep at night, because it’s a very volatile sector.
So there isn’t a “one size fits all,” but there’s an outline of how to do it. Then you can choose if you are aggressive or not aggressive, how to address it for you personally. I talk about age and investing experience — so depending on age, experience and risk tolerance, you take those general parameters and fine tune them. But there’s no “perfect” for anybody.
INN: Can give me an example? If you’re an older risk-averse person, what kind of profile would you have?
DM: Sure. I’d say the older you are the more you favor physical metal. It’s more stable and there’s less volatility. The younger you are, the more aggressive you are, then the more you can take on, let’s say exploration companies. Because if you lose in those and you are young and you are still working, you obviously can make back the money and try again. The older you get the less risk you want to take. So that’s the general outline.
INN: This time last year we talked about your new royalties company. Do you want to tell me where you are at with that right now?
DM: The best thing to do is go on the website. We just issued a press release about a week ago. We have raised more money, we still have our first royalty situation that’s already been done with one of the majors, and we have gone through about three very close deals. I was in Stockholm about a month ago … talking to somebody from Russia with a very interesting PGM situation, but it wasn’t advanced enough for us to be comfortable with it. So we are working hard, we haven’t gotten any more results to show you, but we’ve got good faith in our investors. So far, so good.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.