Gold, silver, and the mining shares have been the place to be ever since Eric was pushed into precious metals 16 years ago, in 2000, when gold was at $255. He was a hedge fund and equity fund manager who realized that the NASDAQ was going to crash. He wanted to protect his investors, so he got into gold stocks and opened up a hedge fund.
He has found that when most bull markets really get going, the returns are an average of 500%. In this gold bull market, $2000 gold is more like a 50% increase, so we should see it go that high at least, possibly much more!
Money deployed in the majors and mid-tiers is trickling down into the exploration companies where there has been a huge rally. One of his current strategies is to find near-development companies where a company has an interesting deposit and/or could be in production quickly. A recent example of an investment that Eric has made is called Latin American Minerals (TSX-V
There is a concern about the negative correlation between gold stocks and general equities. Sprott thinks gold stocks will still be strong. This is because a failure- whether it is a bank, a government, COMEX, or a stock market breakdown would be incredibly positive for gold. Deflation is better for gold than inflation.
Sprott is hoping the central banks, and the commercial banks who are short on precious metals will lessen in power, so that gold and silver can do what they should have already done and go way up. The gains have been prevented many times due to market coercion by people with more power, money, and determination than the investors. Gold going over 2k in this
- Source
