gold bull“You have to be a buyer when people are non-believers. You have to believe in something based on data that says you’re right when the world will tell you you’re wrong, because when the world says you’re wrong and you’re right, you know that the return will be outsized because no one is there. It’s like buying gold stocks in 2000 which I did to a very large extent. The HUI index was at 35 and it went to over 600. It went up 1700% in eight years. And that’s because everyone was against it. It was like a killing field for an investor to go in and buy things cheap and I really believe it’s kind of a similar opportunity again today.
Once gold starts looking like, ‘Hold it now—maybe that secular bull market wasn’t over?’…All will be forgotten quickly. If the price of gold is $2000 Tekoa, you would not believe what the sentiment will be…They’ll all come in…you will have everyone trying to get through the same door at the same time and it could be quite stunningstocks will go up multi ten thousands of percent!

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Submitted by Tekoa da Silva, Bull Market Thinking:

I had the opportunity recently to reconnect with Eric Sprott, Chief Executive Officer and Senior Portfolio Manager of Sprott Asset Management.

It was a powerful conversation as Eric spoke to the key philosophies which resulted in him becoming a billionaire; which market offers the greatest gain potential from here, as well as the most important rule precious metals investors need to keep in mind during these tough market periods.

When asked of the investment philosophy which resulted in him becoming a billionaire, Eric explained that, “You have to be a buyer when people are non-believers. You have to believe in something based on data that says you’re right when the world will tell you you’re wrong, because when the world says you’re wrong and you’re right, you know that the return will be outsized because no one is there. It’s like buying gold stocks in 2000 which I did to a very large extent. The HUI index was at 35 and it went to over 600. It went up 1700% in eight years. And that’s because everyone was against it. It was like a killing field for an investor to go in and buy things cheap and I really believe it’s kind of [a similar] opportunity again today.”

Reflecting on the level of participation he sees coming from institutional investors in this market, Eric said, “There’s no interest. Maybe 2%-3% will listen and maybe 5% of those will act. So it’s a very, very, very small world these days of people who are interested in gold…it’s almost like you have the plague when you’re talking about gold, even though of course over the last 13 years it has been an awesome investment. It just hasn’t been in the last two.”

When asked what the trigger will be to change market sentiment dramatically, Eric said, “Once gold starts looking like, ‘Hold it now—maybe that secular bull market wasn’t over?’…All will be forgotten quickly. If the price of gold is $2000 Tekoa, you would not believe what the sentiment will be…They’ll all come in…you will have everyone trying to get through the same door at the same time and it could be quite stunning…stocks will go up multi ten thousands of percent…because not only is the price of the product going up but everyone get[s] excited about discoveries and it just gets crazy.”

That pendulum of sentiment extreme is, “One of the beauties of the natural resource area,” Eric added, “the gains that can be made are so outsized versus the norm of normal investing, and that’s why I’m kind of attracted to it. I am in it for the reward and I will take that risk to get that reward.”

As a final comment on the most important rule headstrong metals bulls need to keep in mind during these tough markets, Eric concluded that, “If you believe you’re right and the data says hold your ground—you hold your ground. Normally there’s a pretty big payday at the end.”

Once again, this was a powerful interview, conducted with one of the world’s top asset managers. It is required listening for serious investors and market students.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

>>Interview with Eric Sprott (MP3)


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For more information about Sprott’s award-winning investment professionals and their market insights, visit www.sprott.com or contact invest@sprott.com.

  1. I am worried a bit about gold stocks. Why? The things all arround will be in such dire straits that governments might NATIONALIZE the mines just to SURVIVE as a nation. So investors could lose it all in a second. But physical gold will fly very high…

    • Concern over nationalization is valid.  Likewise, excess profit taxes can easily be raised on investors, and crippling royalties from governments to mine operators as well.  But physical, in hand, can also be impacted by higher taxes, maybe even as high as 70% or 90% or even outright confiscation too.  While if no one ever wishes to sell any of their stash until more reasonable tax rates come into being a decade or whatever later, some might need liquidity and the insurance purpose of physical PMs and might be forced to sell beyond what could be bartered or dispatched in the black market.
      Given these considerations, and the potential for leveraged upside in equities, it’s wise for those that have a lot of wealth to place in a store of value to diversify.  That’s important even when it comes to thinking about gold in general.  Holding bullets, storing food, perhaps owning farm land if that’s doable for some, even socking away many cords of firewood are all practical diversification efforts. 
       
      By the way, what’s up with that artwork in the picture?  Anyone know what the piece is and where it’s on display.  Pretty odd.  Good name:  “Bull powered by super-charged flatulence” :-)   Somehow, I bet the artist came up with a different working title!

    • dwayne luthor, and flying dwayne, nationalization has always been my concern as well. with silver as well, if it is as rare as we know it is, national security and interest could easily take hold. dwayneslicker,i wasnt aware that the wombat’s thrust was rectally based but you have a point.
       
      merry christmas in any event.

    • having the testicular fortitude to stick with what you know is right despite the masses laughing at you, while you take daily financial beatings is a remarkable skill.
       
      As I’ve said before, at some point, someday, it is going to be very satisfying.

  2. Never happen gold stocks go up 10,000% We would have a better odds if the government went bankrupt an gave everybody that had ancestors back in 1933  all there gold back in fort knox. An then stop letting the price be manipulated. Anyway if the price of pm stock an gold price where that high they just tax you a lot more. from 28% to 75% .

  3. Here is my 2 cents worth.  Know the tax laws when buying, selling and trading gold and silver.  They are not complex but do require some study.  Once you have figured out the tax laws then you can avoid them.  Eric and Doc can’t tell you what to do when you sell or trade your precious metals but I sure as heck can and will, consequences be damned
    And I will say with 100% certainty, paying taxes on appreciated assets like precious metals is just rewarding the bad behavior of cretins in positions of power who are systematically debasing our currency, inducing inflation that will push precious metals and other hard assets into a position of profit and capital gain while spending every waking hour thinking up ways to screw us over.
    Anything over $1,910 in gold and $50 silver means a sale creates a gain.  If I sell one ounce of silver or gold for a profit there is not a chance in hell that I will report it.  My phyzz will never see the light of day either. If anyone in a position of power tries to control it I will destroy it before it is taken from me.

     A friendly suggestion.
    Set up a network of confidants, confederates and vendors with whom you can trade gold and silver without disclosing the transactions. If you expend phyzz, replace it will an equal or larger amount, using the FIAT you would have spend on the goods or services. Leaving the government out of any transaction that allows you to use cash and physical bullion exchanges is something that you will relish and want to do again and again. It is freeing, liberating and just down right fun!
    I’ve tested this system many times in the last 18 months. It works well.
    I continue on this quest whenever the opportunity presents itself. Outside of disposing of FIAT to buy goods and services, I frequently ask if someone if they’ll acccept precious metals as a means of exchange. Many like this option. This is Nevada, you know, and we do things differently here. ;-)

    • I was under the assumption that sales of gold coins are not required to be reported by dealers. Silver for that matter too. Either way I agree with you about the whole taxes thing. Why reward those whose very actions have caused the rise in PMs in the first place. Do I get a tax writeoff for all the purchasing power my dollars have lost? We’ll call it even and the IRS can go shove it.

  4. If COMEX futures qualify as physical metal in a fund, then gold stocks will be just as eligible for confiscation/prohibition when the sh!t goes down. And owning funds or trackers likely will not help. Like having USD accounts didn’t help Argentinians when their currency in-cur-red a 66.6% (what a number) haircut.
    I see the paper game more and more as a temporary thing to be in. If at all. I keep considering it, an en up buying ounces ith my last money every time. Easy money never found its way to me, or I was too stupid to make it stick around when it did.
    For me it’s real difficult to hedge my bet if I already have a bet I like. 
    When shorting the stock market gets too easy and profitable for individuals, its profits are bound to be taxed 90% or worse. And just try to not spend the profits before you get the news. They’ll own your next house anyway, even if you bought it cash.
    Sprott is a smart one. He has his money well spread. Countries and companies. When it starts going bad, he’ll hear as one off the first, and should be best positioned to secure and re-direct his (clients’) funds in time. He probably keeps COMEX longs on the side to take delivery next time he needs to. Sell mine stocks and switch to metal.

  5. XC Skater   There was a brief flurry of blogs about Sprott selling a  9 figure chunk of his PSLV fund.  Speculation was rampant as to what Sprott will do with those funds.  I heard he invested in miner stocks.   Sprott does put his money where his mouth is.

    • @AGXIIK
      Indeed that’s what I understood of the matter.
      Sprott is obviously very confident that his portfolio an the way he builds it, allows him to outperform silver, especially from bottoms.
      He might even have to control himself to not convert too much of his physical to stocks.
      At his huge personal silver position, he can help keep the price of silver down, get miners into even more trouble, before offering his hand to pull them out of the mess, at carefully crafted terms. Big money can’t get premium on silver coins, but it can make special deals with companies in trouble.
      The lower silver goes, the more Sprott will convert to stocks. In his view and experience, the lower the price, the more mine value he can get. You and I would be buying soon to be bankrupted mines, he would be making sure “his” mines stay afloat. He doesn’t allow them to go belly up. He’ll sell more physical if he has to, and strengthen his position in these mines as the going gets tougher on them. His personal portfolio will I think well outperform the various funds he offers. And even if he’s only partially right about the gains to be had here, he is basically announcing himself as the richest man on earth come the peak of the next PM bull market. He’s already referred to as a billionaire, and that’s with big holding in metals, at a metals 3-year low. 

    • @XC Skater
      Sprott’s actions seem to lend fuel to my “personal conviction” that we have more time to stack/prep/target practice/ETC!
      I certainly hope so. I’d LOVE another year, I have so many hot projects going that can really make some hay in 2014!
      If any of the financial ventures pans out, I can forget my stupid “STRAIGHTJACKET FUND” with the morons in my union. 
      Not including members, just the small handful of morons that listen to that “LIAR-LIAR N.E.C.A. LAWYER” who is clearly 
      a paid shill for TPTB. Poor, Stupid, misguided @$$-donor…

    • RGR  I wish you the best success to your entrepreneurial efforts.  The rewards are infinitely sweeter than anything that comes from working for the man at the day job.
      XCSkater. I dont remember the Argentinian devaluation but the Venezuela one in Fed 2013 was nearly 50% and this country continues to slide down the slippery slope of currency nightmares.  The only asset that suffered little was gold and silver.
      Keep stackin’

  6. MR. Sprott getting removed as manager of some of the sprott funds reminds me of Robert Sanborn getting kicked off the oakmark fund in 2000. He refused to buy the .com stocks during the bubble, his performance got killed, and he got replaced by another guy.
    Then the bubble burst.

    http://money.cnn.com/2000/03/28/mutualfunds/q_funds_notebook/

    I guess its hard to totally get rid of him, since his name is on the sign, but it makes me feel like the bottom may be around the corner.

  7. RGR 
    Whaaahhhahahahahahahahahahaha
    hehehe  
    huff huffhuff
     whew ! 
    that was a belly laugh 
    Bingster and Deezer Shoove sound like a couple of milleniam surf nazi slacker douchebags. 
    KLUMMAC is all over the web.   “I don’t even like the sumbitch and it’s stupid too’    Well duh DOOD,  just what your fearless leader Deezer needs. 
    Idiots need more names to call Obama.
    Well yeah, Bingster.
    How’s that health insurance workin’ out for ya.
      Maybe you’ll get some medical marijuana to do with your student loans and EBT cards. 
    Idiot? 
    I am, and then some. And thank you for the compliment.
    If they come for me I’ll blame it on Pat Fields. He said it first  Keynesian Lying Usurping Marxie Muslim Alien Cockroach   Words to live by.

    • LOL, seems to me that one guy said “I don’t even like the sumbitch and it’s stupid too”
      meaning he does not like “O”??? Not sure, but that’s how I read it
       
      LMAO! We’re going VIRAL!!! 
       
      PS: I’ll blame Pat too, if they come for me! Should I leave you out???  lol

    • @Mammoth
      Haha yes it is the successful white middle-to-upper class sissies that are afraid of Christmas, I get the same at the bank etc., although the teller at the bank knows I’m a Christian and wished me a Merry Christmas, although years ago, my investment advisor at my old bank, a fellow Christian, refused to wish it to me because of fear of being heard.
      But here is the funny thing, my bosses are Jewish (not the Christian kind), and they wish Merry Christmas. I wish Merry Christmas tot he Muslims and Hindus from Afghanistan, Sri Lanka, etc. etc., and they happily wish me Merry Christmas (they usually smile respectfully when I say “Jesus is the reason for the Season”). The owner of my Jewish deli used to wish me Merry Christmas. And there was an article in the paper the other day of Sikhs from India who were excited about a party designed for them so that they could learn what Christmas was, and they couldn’t figure out why people wanted to leave them out of the loop by not inviting them to celebrate and by not wishing them Merry Christmas.
      So the message: it’s sissy, PC Western liberal atheistic/agnostic types who grew up in “Christian” homes who are offended, the Jews, Muslims, Hindus and Sikhs all are fond of Christmas (but of course, the Western liberals have taken it upon themselves to “protect” these immigrants from the “wild-eyed” Christian “extremists” and their “Christmas” lol)
       

    • @undeRGRound @Proverbs1616 , thanks for the images and here is one for your viewing pleasure.
      Is that a Silver coin she is holding?
      Not sure one can call me ‘mean,’ as I just tell it like it is.  And that is why I am not shy about wishing others a Merry Christmas.
       
      By being overly P.C. we are only pacifying those who hate us anyway.  Only fools believe that saying ‘happy holidays’ instead of “Merry Christmas” to a muslim will make him hate them any less than he already does, because we are already infidels in his eyes.

  8. XCSkater  A billionaire doesn’t become one by being a nice guy.  It’s ruthless cutthroat business making a 10 figure stack even if the coat tail crowd comes along for the ride.  Sprott is certain to do things which benefit his own interests as well as those of his confederates.  but Sprott is more unique in that he supports the strivers and those who want to be part of his brilliance.  He gave an interview with Doc at silver Doctors right at the time when SD was gaining critical mass as an alt new website.  He was generous in other ways too boot here at SD. I’d like to see Sprott form a ETF that consisted of the junior and senior gold and silver miners, partly to share the wealth, a bit like Warren Buffett and partly to acquire additional investment capital to build the miners that have the best chance for great success.  The overall market is pretty thin so his subscription would  be limited. Too much cash could overwhelm the thinness of the precious metal mining marketplace. 
    RGR   We all have to put our shoulder to wheel when coming at POTUS from various angles. I’ll take the heat for my contributions.  I’dd like to see as much attention paid to a moniker that is more like the president’s normal MO. 
    That POTUS SHINOLA De PINOCCHIO.
     
    PS if you want to reduce your digital footprint, use startpage. It’s a proxy search engine that makes your web searches anonymous
     

    • As there are stocks that have bad times, there are countries as well. They fall deeper in a crisis, whatever they try.
      This is important for stackers to be aware of, as when you reach your exit point of metals, cash may not be the thing to have. Inflation could still be anywhere. Local real estate may be well past a bottom, in part due to inflation. Knowing which place has fallen most, but with potential to spring back up, like Sprott’s mine picks, will be necessary to “cash in” the precious profits. tiing of the exit alone is not enough, you need somewhere to go to, in a literal sense possibly.
       
      As y’all know, I am in Europe. And, I am open to any ounces making avenues I might contribute to.

    • @AGXIIK
      I’m sure NSA knows all the contributors to the KLUMMAC Legacy anyhow!  :D
      If they come after me, I’m bugging out to NV. Is the spare bedroom still available? 
      I can clean out the Bear Smell, as long as you evict them FIRST!  

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