Thom Calandra: Gold Market Fragmentation Troublesome for Investors

Keeping track of all the publicly traded gold companies is a herculean task and one the average investor is seldom cut out for, said Thom Calandra of the Calandra Report when discussing the gold sector with the Investing News Network at the New Orleans Investment Conference.

“Look at iron ore — you can probably name three companies that are responsible for 50 to 55 percent of all the iron ore that is shipped in the world each year,” he said.

“But when you are talking about gold and you want to say, ‘Okay, who is responsible for half of all the gold that is produced every year or shipped on a cargo ship or a plane?’ You can’t name them, you’re going to have to name 15, 20, 25, 50 companies, maybe 100 — the market is so fragmented.”

This saturation has created an environment that is hard for investors to wade through. For Calandra, the key is to cut through the jargon and hyperbole and focus on valuations and growth potential.

“Eliminate the ones that will never be worth anything or they will just be worth something because they are being speculated on, or promoted, or fake newsletters or fake inflation organizations are putting out promos or direct mail. If you can eliminate even half of all the companies out there then at least you are making something of an inroad.”

While investors may be rightfully confused about how to approach the gold market and which stocks to choose, the founder of the Calandra Report does want people to take responsibility for their portfolios and avoid spreading their investment dollars and attention too thin.

“Don’t throw too large a blanket over too many investments, whether it’s in the metals market or in the biomedical market or healthcare, or education or media or anything. Just try to keep it more focused and less diversified so you don’t go crazy trying to track down all the news and all the operators and all the scams and all the lost hope.”

Knowing when to sell and sticking to your guns can mean the difference between cashing out a small fortune or cashing out pennies on your dollar.

“There was a reason to short PG&E (NYSE:PGE) stock at US$60, US$50, US$40 and US$30,” he said. “And now that it is US$6 and as low as US$3 this week (Editor’s Note — interview conducted on November 1) you could see the short sellers were the smart ones on that.”

Listen to the interview above for more from Calandra on what gold companies he owns and where he sees the gold price going in the new year. You can also click here for our full New Orleans Investment Conference playlist on YouTube, and here for more from Calandra on platinum and uranium.

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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.