Software company palantir has recently purchased fifty million dollars worth of gold bullion. So should you be investing in gold in this video? You go to find out I’m going to dive into the gold price. The headlines and my valuation and by point for talented stuck to
this is going to be really exciting. Video guys who’d be sure to stick around all the way till the end, and I think you’ll like what I’ve got for you
Palantir has just bought Fifty million dollars in gold bars in august twenty twenty one, as it’s cash, pile, is grown to over two billion dollars. So this makes sense. Talents here is basically hedging. It’s cash position by pitch seeing some gold,
which is a traditional hedge against inflation. One of the major reasons- this is a major surprise, is the fact that many large technology companies now are actually buying bitcoin instead, which is being called the digital gold. As a hedge against inflation, we have pay pal, we have square, we have tesla they’ve all been buying bitcoin for the very same reasons as Palantir.
Despite been an advanced software company. Palantir has gone old school and bought gold. So is this a good deal for Palantir?
Now in my previous Silver mining video I discussed some more established and larger cap silver mining companies.
But in this video, I’m going to reveal three smaller cap Silver Mining stocks which could offer MUCH HIGHER REWARDS if your willing to take the extra risk!!
SO without further adieu lets dive in.
(SETUP INTERACTIVE INVESTOR AFFILIATE LINK)
Fortuna Silver mines.
BEAR CREEK MINING.
AISC $4.55 , Mine Life 15 years.
Bonus. Impact Silver.
And Now for a very special bonus stock Impact Silver.
A Small Cap stock with Mines based in Mexico.
Share price is currently around $1 per share and it has actually reached nearly $3 per share in previous years.
DIVING INTO THE INVESTOR PRESENTATION.
90% of revenue from silver.
Billionaire Eric Sprott is also one of their investors who has a track record of doing well with miners.
Hecla Mining is a great company is you want some exposure to mining in the US and Canada.
Low mining cost.
215 million in cash.
Diversified across multiple sites across the US and Canada.
Diving into the share price.
First Majestic Silver
First Majestic Silver is a great large cap silver mining company with their CEO one of the biggest silver bulls in the industry.
Final thoughts?
However, all that glistening isn’t gold Many Silver mining stocks are also very risky and can crash hard!
(Take the amount of ounces of gold/sivler times by the current gold price. ) Compare that to their market cap. (Most gold mines usually trade at close to their market cap)
But with sky high government debt, & central banks from around the world printing trillions of dollars in stimulus many fear hyperflation and thus the defalued of paper fiat currency.
Billionaire Ray Dalio, the worlds largest hedge fund manager even wen’t as far as saying “cash is trash”
Gold also performs better in low interest environments as it doesn’t yield any interest.
When interest rates are high, people can get nice returns from bonds or even in their savings account.
So with this bubbling catalyst going on right now, Gold has reached all record highs and thus are gold & silver mines about to sky rocket.
In my previous video on my top 5 gold mining stocks many of you guys asked the main differences between investing into the miners and gold directly.
So in this video, I’m going to explain WHY Gold mining stocks can offer much higher returns but also with higher risks!
Without further aideu lets dive in.
Gold Mining stocks are a stock first and gold 2nd.
They are higher risk and higher reward.
Advantages of Investing into gold miners?
Gold Miners are a leveraged way to invest into Gold, so should the price of gold rise by say a factor of 2 the miner could easily rise by a factor of 8 or more!!
With an average gold to miner ratio of 1 to 4.
Which can make them incredible for investor’s for example looking at the share price of a popular mining stock Kin Ross we can see that it was a 10 Bagger between the years of 2001 and 2008.
That mean if you would have invested $10,000 you would have made $100,000 or if you invested $100,000 you would have been a millionaire!
WHY DOES THIS HAPPEN?
Well as Mentioned previously Gold Miners have an ASCI (All in sustained costs) which is generally fixed.
So lets say their ASCI is $900 and Gold price is only at $1200 per ounce then they will only have a small profit margin of $200.
However, should the GOLD price rise to over $2000 per ounce where it is right now. These miners profit per ounce has just increased to over $1000 per ounce!!
Thus the companies cash flow’s explode by over 5 times in a short period of time.
RISKS OF INVESTING INTO GOLD MINERS?
However, not everything that glistens is gold, compared to gold the miners often crash much harder and can even go to zero if the miner goes bankrupt or they just run out of gold in their specific area.
Gold miners are also susceptible to business problems such as poor management, workers strikes, Rising mining costs, financing and many other business risks.
Gold miners are not stocks you want to hold onto forever, they are stock you want to catch on an upcycle.
Final Thoughts:
Overall, Don’t confuse investing into Gold with investing into gold miners.
Gold is a safe hedge against inflation and acts as a ballast for your portfolio.
Whereas Gold Miners are much more volatile with high risk and high reward.
WHICH DO I INVEST IN?
I have approximately 5% of my portfolio in Gold, using the I shares Physical Gold ETC
And then I have a small pot of money which I invest into a few diversified gold miners as more of a speculative play…as one 10 bagger could set you for life!
If you interested in the Gold Miners I’m invested into, check out my previous top 5 video below.
Bank of America & many large institutes upgrading their price target to $3000 per ounce.
So during this gold boom, could gold & silver mines be about to sky rocket also!?
Well in this video we’re going to find out!
As I deep dive in my top 5 Gold Mining stocks!
Be sure to watch till the end to find out whether I have shares in any of these.
Without further adieu, lets dive in.
INTRO*
How to Value a Gold Mining Company?
Valuing a mining company is similar to valuing many other commodity mining companies such as Oil.
The price is governed by three main factors, SUPPLY, DEMAND and COST
With Demand governed by many factors such as Economic Conditions, Political uncertainties and government policy. That is the part the business can’t control directly.
How ever, what it can control is the COST OF MINING.
Thus
The most important metric called AISC All in sustained costs.
How much does it cost the company from start to finish to refine the gold and sell it on the market.
For example, if a gold mining companies cost is $1000
Then at todays current gold price they are making around $1000 per ounce in profit.
So with that being said, lets hop into my top 5 list.
New Mount Gold Corp:
Worlds Largest Gold producer over $55 billion market cap. 1.45% dividend.
This is one of the best dividends you will get in the Gold Industry.
(Globally Diversified company, worlds number 1 gold producer.
(If the Gold price continues to sky rocket it would be right to assume you that they will also raise there dividend.
I was invested into this company a few years back and made some healthy profits.
Barrick Gold.
The worlds 2nd largest gold producer, $51 billion market cap.
Over 1% dividend. Decent AISC. Anything under $1000 is great in this market.
Globally Diversified Mining Giant.
Investor presentation.
(Share price)
Wheaton Precious Metals:
This is a streamer they don’t actually own any mines. They have an agreement with the mine they just buy the commodity and sell it on the open market.
Market Cap, 1.07% dividend yield, share price.
Global Diversity mines in north and south America. This is my top pick for diversity and the fact they use an alternative business model to many of the others.
What I love about this stock is it has such a low AISC and around 8 year mine life.
Low AISC = $579/ounce.
Analysts are very bullish on this stock. Average price target over $3.
The smaller cap stocks are more risky as they only have one project in the country.
For example, If the country runs into political uncertainty this could affect the stock.
Kin ross Gold Corp.
I love this company, it’s a large cap currently trading at a 5 year high.
(Show stock chart peaks from financial crisis in 2008, back in the 90’s it traded at over $40.
This is a while diversified across Russia, west Africa, America.s
There cost is around $1000
Final Thoughts?
Overall, Investing into gold mining stocks is a great way to be exposed to the gold industry especially during this time when many are retreating way from paper fiat currency.
Which mining stock is right for you depends upon your risk tolerance the globally Diversified giants offer much safer investments as if a mine gets shut down you won’t lose halve your investment. Thus I prefer this diversified companies.
However, if you wish to aim for incredible returns than investing into one of the smaller cap companies with just a single mining area could be an option for the adventurous part of your portfolio which you don’t mind losing.
However, the smaller caps require a lot more research & due diligence.
With that being said, this is not financial advice, so please research yourself in more detail before investing.
Whats up Guys, Ben here and welcome to Motivation 2 Invest.
With Central Banks from around the world printing trillions of dollars in Stimulus packages and government debt at an all time high!
Many Investors are retreating to PRECIOUS Metals such as Gold and Silver to help Hedge there Portfolio against the risk of Paper Currency becoming Worthless!
Ray Dalio even wen’t as far as saying CASH IS TRASH!
I recently did a video on Should You Buy Gold which was extremely popular, in the comments of that video many people requested MY THOUGHTS ON SILVER & Whether it’s a good investment!
SO IN THIS VIDEO, I’m REVEAL THE 5 Main Differences BETWEEN INTO GOLD & SILVER to see which is Better Precious Metal To invest in!
