The Most Undervalued Equity Market Sector? Gold Miners!

John Rubino, Gwen Preston, Eric Coffin and Quinton Hennigh return as guests on this week’s program.

You might be surprised to learn that according to Bloomberg, the only S&P 500 sector (excluding Financials) that is enjoying positive free cash flows after factoring out consumer price inflation is the gold and silver mining sector. Gold & silver miners are enjoying a positive inflation adjusted free cash flow of ~+1.0%. Other sectors cash flows? Materials ~-0.5%, Consumer discretionary ~-1.0%, Energy ~-1.25%, Consumer Staples ~-1.3%, Industrials ~-2.0%, Communications services ~-2.1%, Health Care ~-2.9%, Information Technology ~-3.1%, Real Estate ~-4.75% & Utilities ~-8.5%.

Meantime, for the first time since the 1970s, wage inflation is just beginning to spiral upward as labor shortage puts common workers in the driver’s seat. Workers are starting to go on strike more aggressively than any time since the 1970s leading to rising wages that lead to higher inflation, that result in still more demands from workers for still higher wages in the form of cost-of-living adjustments. With gold and silver mining being the only sector (besides Financials) in the S&P 500 that that has a positive inflation-adjusted free cash flow, it is the most undervalued sector in the S&P 500 and figures to be the most able to withstand spiraling labor costs, especially as the real price of gold rises off its historical lows. Those topics and more are discussed with John.

Gwen and Eric discuss their favorite junior gold and silver exploration companies, some of which they have invited to the November 2021 Metals Investor Forum. Quinton Hennigh checks in to announce drill results for Lion One Metals’ and Eloro Resources.

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John Rubino runs the popular financial website DollarCollapse.com. He is co-author, with GoldMoney’s James Turk, of The Money Bubble: What To Do Before It Pops, and author of Clean Money: Picking Winners in the Green-Tech Boom (Wiley, 2008), The Collapse of the Dollar (also with James Turk), How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main Street, Not Wall Street(Morrow, 1998). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a Eurodollar trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications.

Gwen Preston is the Resource Maven. Years as a mining journalist with The Northern Miner and working along with Marin Katusa at Casey Research gave her a deep base of knowledge and a broad network of contacts in the resource sector. Then Gwen Preston decided to launch her own newsletter—Resource Maven—at the very bottom of the resource market. With a technical background, a strong network and years of experience, Gwen is not only finding winning mining stocks, but also telling investors when to sell and lock in big profits.

She understands which projects and pieces of news matter. She understands what it takes for a project to advance along the exploration-development-production path and what opportunities each stage offers. She knows how the metals markets work, alone and within the global economy, and how to profit from commodity cycles. Resources are Gwen’s world and she seeks to pass that knowledge on to others.

Eric Coffin is the editor of the HRA (Hard Rock Analyst) family of publications. Responsible for the “financial analysis” side of HRA, Coffin has a degree in corporate and investment finance. He has extensive experience in merger and acquisitions and small-company financing and promotion. For many years, he tracked the financial performance and funding of all exchange-listed Canadian mining companies and has helped with the formation of several successful exploration ventures. Coffin was one of the first analysts to point out the disastrous effects of gold hedging and gold loan-capital financing in 1997. He also predicted the start of the current secular bull market in commodities based on the movement of the U.S. dollar in 2001 and the acceleration of growth in Asia and India. Coffin can be reached at [email protected] or the website www.hraadvisory.com.

Dr. Quinton Hennigh is an economic geologist with 25 years of exploration experience, mainly gold related.  Early in his career, he explored for major mining firms including Homestake Mining Company, Newcrest Mining Ltd and Newmont Mining Corporation.  Dr. Hennigh joined the junior mining sector in 2007 and has been involved with a number of Canadian-listed gold companies including Gold Canyon Resources where he led exploration at the Springpole alkaline gold project near Red Lake Ontario, a 5-million ounce gold asset that was sold to First Mining Gold.  In 2010, Dr. Hennigh helped start Novo Resources, now a gold producer, by assembling its Australian exploration portfolio. He is Geologic and Technical Advisor to Crescat Capital. Dr. Hennigh obtained a Ph.D. in Geology/Geochemistry from the Colorado School of Mines. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.