Nick Hodge,
Publisher
May 11, 2021
Publisher’s Note: Gerardo and I chatted about silver in this week’s podcast.
He caught me off guard because precious metals have been “boring” the past few months.
I think most people have fallen asleep at the wheel on silver and gold.
Silver is looking like it could break out in a big way and some gold companies raking in money hand over fist. We discuss it below.
Enjoy,
Nick Hodge
Editor,
Daily Profit Cycle
Gerardo Del Real: Silver. Silver is not gold. You want to tell everyone why, Nick? You have the floor. Tell them again.
Nick Hodge: Oh gosh, you always put me on the spot, and I hope I can come up with the answer. It's not quite a purely precious metal, has much more industrial uses basically, is the short answer. Also, it's not mined purely by itself but as a co-product of other mines oftentimes, and so it's a bit different supply dynamics would be, I guess, the short answer.
Gerardo Del Real: Absolutely. Silver is most absolutely a commodity and it's trading like it. Silver had itself a heck of a week, and unlike gold, I like silver where it's at. I like where silver is headed. Your thoughts, Nick.
Nick Hodge: Silver? I haven't thought too much about silver.
Gerardo Del Real: What do the charts say? You're quite the chartist now.
Nick Hodge: Yeah, well, it's... Silver looks like it's going to $30. I could pull up a chart if you really want me to.
Gerardo Del Real: I would love that because if it hits $30, then where's it going?
Nick Hodge: Well, if it goes through $26, it's going to $28 and then.
Gerardo Del Real: Well, we're there. And I agree with you by the way.
Gerardo Del Real: Oh goodness is right. Yes, sir.
Nick Hodge: You have to keep pulling it back.
Gerardo Del Real: Ten years.
Nick Hodge: Man. Well, it has to consolidate here at $24 to $26 for a bit and then it could go. Yeah, it could go $30 or $40. Well, the answer is $50, right?
Gerardo Del Real: The answer is $50 bucks and again, like copper, then we're talking new all-time highs. Right? So not a lot of great ways to play silver, but let me play devil's advocate again because I'm a relatively simple person with a simple outlook on things.
If gold never goes up another dollar, there are companies that are making money hand over fist in the current gold price environment. The royalty companies are killing it. The companies that are not trying that hard are doing really well.
Nick Hodge: How many times have you sarcastically said that gold was “boring?”
Gerardo Del Real: Dumbass gold.
Nick Hodge: Now that “boring” $1,700 gold is falling all the way to the bottom line, so you've got royalty companies like Wheaton Precious Metals reporting record revenue. I think you're going to continue to see that. If you look at the even larger companies and the royalty streaming companies specifically, the Wheatons, the Royals, the Franco Nevadas of the world, which often lead and outperform… They are starting to lead.
If it’s a short-term bottom or the turning of the sector to new highs remains to be seen, of course, but the fundamentals, which I know don't matter as much in the times we're in, but the revenue being generated, the profits that are falling to the bottom line, and then in turn the dividends that are being increased. It was the third consecutive quarter that Wheaton increased their dividend.
That's just another reason for investors to start looking at these gold stocks again because we're in a historically low interest rate environment.
If you can get that historic inflation protection, that anti-fiat aspect of it with all the money printing that's going on, a gold price that allows money to fall to the bottom line when it's mined, and also incents exploration, et cetera, then it could be time to start looking at those names again.
Gerardo Del Real: Especially the future Francos and Wheatons.
There's a company that I follow and cover as a recommendation in the portfolio and I'm a shareholder of that I really like.
They're just getting going and are already issuing an industry-leading dividend. They're already recording record revenues, and again, in an environment where a lot of people are bored and frustrated with the gold price.
So a lot of great gold companies doing some really good work out there that I think will lead to a pretty drastic rerating a la some of the better copper names right now in the not too distant future.
Nick Hodge: That's why I didn't sell them all.
Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.
*Follow Nick on Twitter.