If you’ve been a gold investor for more than five minutes, you’re probably already familiar with the feeling of being viewed as a little “out there” by your gold-agnostic friends and family.
Students of ancient mythology may remember the tale of Cassandra: a woman gifted with the ability to see into the future, but also cursed by the god Apollo to be ignored and disbelieved by everyone around her.
Gold investors are the Cassandras of the modern world – and we have been for a while.
There’s no sense in arguing with people who can’t, won’t or don’t see what’s happening in this moment in monetary history.
So don’t argue. I’m going to give you some simple facts you can drop to at least pique their interest…
If you were around when President Richard Nixon ended gold convertibility in 1971 and thought “this won’t end well,” you were right.
If you looked at gold under $300/oz in the early 2000s and thought “this makes no sense” – you were right.
If you watched as US deficits rose throughout the 2000s… went even more vertical in the 2010s, blowing through $20 trillion to $30 trillion between 2017 and 2022 – you probably thought: gold is going to absolutely soar.
And you were right, again.
But I bet even though you were right, over and over – your friends and family still didn’t take much notice.
You’re still the “goldbug.”
There are probably some people in your life who are half interested or on the fence about gold. These people you can reach. You ostensibly want these people to prosper from what’s going on in the gold market.
The best message for these folks is to clarify the difference between gold and gold stocks. Gold is just a (superior) form of money. Buying money doesn’t tend to make you rich.
It can certainly help you keep the money you’ve earned, and you may see some capital gains from it, but the expectation for the “cash money” part of your portfolio is that it doesn’t do much of anything except continue to hold purchasing power.
The real opportunity is to buy undervalued gold stocks that have upside leverage to the price of gold.
And the best message for people on the fence: gold stocks are still wildly undervalued. They’re not too late.
Gold has soared (and will likely continue to do so) but gold stocks have barely kept pace, on average.
You can tell them:
Gold is up 134% over the past 5 years (outpacing stocks, bonds and every other asset) but gold stocks are only up 114%.
Many of the best gold stocks are still selling for 50% discounts to their net asset value.
Even if gold is flat for years to come, gold stocks are a value.
It’s not too late for the gold-shy. Gold stocks are still lagging. That won’t last.
If you want to give them something really meaty to bite into – have them read one of my latest reports on the death of the petrodollar.
This brief spells out why global finance is fleeing the dollar, and I walk through how this capital is flowing into gold and gold stocks.
It’s a great primer that might make a goldbug out of someone you know – and help them make some money in the process.
It can’t hurt – and at the very least it will give you another opportunity to say, “I was right.”
Have a great weekend,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio