Byron King: The Top Precious Metals Sector Risk for Investors
“The first thing you should be cautious of about precious metals is not owning any, not having any in your portfolio,” said the Whiskey & Gunpowder editor.
At the New Orleans Investment Conference in early November, Byron King, editor of Whiskey & Gunpowder at Agora Financial, spoke about the unfair rap junior miners receive and why investors need to get into the precious metals sector immediately.
“One thing that strikes me as just strange is how quickly Wall Street can lose immense, immense amounts of money for a lot of people — tens of billions of dollars evaporate within days or weeks, and it is just business as usual, but people say that the junior mining sector is very risky,” commented King, referencing the failed IPO attempt by WeWork and the subsequent devaluation of the company.
“A few months ago, (WeWork) were talking about doing an IPO for something like US$60 billion. And they started looking at the analytics of the company, and the metrics and you know, ‘How are you ever going to pay all these rental obligations?’ and the US$60 billion IPO went down to — it’s basically worthless.”
While tech investments get a lot attention, they are often much riskier than resource plays due to the nature of the industry and opaqueness of the market. Sticking with precious metals may not result in a tech unicorn, but it can add value to a portfolio and lead to wealth generation over the long haul.
“The first thing you should be cautious of about precious metals is not owning any, not having any in your portfolio,” said the Whiskey & Gunpowder editor. “Just bite the bullet and go out there and buy one of those gold coins … buy one, and then you buy two and you’ve got three, then you’ve got four.”
Working on portfolio growth and management today is paramount to safeguarding against economic uncertainty, which could circle back around as the US national debt level surpasses US$23 trillion.
“This is a very strange world. I mean, I can’t control Wall Street, all I can do is for myself and for the people who I try to give a little bit of advice to. Guard yourself, be a guardian of your own future, a steward of your own future, be prudent,” said King.
For novice investors, King suggested the VanEck Vectors Gold Miners ETF (ARCA:GDX) and VanEck Vectors Junior Gold Miners ETF (ARCA:GDXJ) as good places to start. Resource-agnostic Sprott (TSX:SRHI) was also mentioned as a sound place to invest.
“The Sprott company of Toronto has numerous gold funds, and they are very well run, very professionally managed, and Sprott isn’t one of these ‘all things to all people’ type of companies. They are a natural resource-focused organization, so the people they have running their gold funds are natural resource people.”
He also recommended that investors subscribe to newsletters and websites that offer critical and in-depth analysis of the resource sector.
Moving forward, King has plans to launch a new newsletter, one based off his expertise as a geologist, geochemist and mineralogist.
“It’s a work in progress, but the idea is to put out valid information that’s based on reality, as in my scientific knowledge background in geology and geochemistry and mineralogy, and the companies that I visit. I travel to their sites, I look at the cores they drill out of the ground, I look at the rock samples.”
Listen to the interview above for more from King on how to prepare for a financial crisis and how to navigate the precious metals market. You can also click here for our full New Orleans Investment Conference playlist on YouTube, or here for more from King on precious metals investing.
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Securities Disclosure: I, Georgia Williams, 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 the interviews it conducts. 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.