A Golden Vision for 2020
A wise person once told me, “A man’s got to know his limitations.” Okay, that wise person was movie character “Dirty Harry,” but as you likely know, I find wisdom wherever I can. And in the spirit of knowing one’s limitations, I have to humbly admit that while I consider myself an expert on many aspects of investing, one thing I know I am not an expert on is owning physical gold, silver and other precious metals.
Why do I bring this topic up? Well, because it’s one of the questions I am most often asked by readers. And given the fact that gold is back in the news in a very big way, and for very good reasons, I wanted to bring you some real expertise on the subject from a true bona fide expert in all things precious metals.
Fortunately, my good friend is just that, and he is Rich Checkan of Asset Strategies International, or simply ASI. Rich is my go-to source for all things precious metals, and specifically on owning physical gold, silver, platinum, palladium, etc. In fact, if it has to do with metals, then Rich knows it.
This week, you’re in for a treat, as Rich agreed to share his latest thoughts with us on why you should consider purchasing physical metals right now. So, take it away, Rich.
A Golden Vision for 2020
By Rich Checkan, President, Asset Strategies International
It was early January 1980. Glen O. Kirsch, one of ASI’s cofounders, was running Deak-Perera’s office on 18th and K Streets in Washington, DC. Gold then, like the stock market today, was making new all-time highs seemingly every day. The Deak marquis in the window flashed the ever-changing current price. Would-be investors were in line, stretched around the city block, waiting for their chance to buy.
Several, for fear of missing out, bought positions forward in line to have the opportunity to buy before the price got much higher. In a couple weeks, gold would hit its then all-time high of $850 per ounce. Of course, this is not the situation today, as that was the late stage of a bull market. Today, we are in the early stages of the next bull market in gold.
January 1980 was two bull markets ago. The last one, from 2001 to 2011, saw gold climb 650% to $1,900 per ounce, and it saw silver rocket 1,000% to near $50 per ounce. After a classic correction and a long consolidation period, gold broke through significant technical resistance very handily last June, and that’s why I say the next bull market is already underway.
Congratulations to those of you who acted a year ago when I forecasted gold’s move higher. You have benefited as gold appreciated from $1,200 per ounce to near $1,600 per ounce. For those of you who didn’t act, there is still plenty of upside potential, so do not worry.
That’s because the current bull market in gold is real. The ferocity with which key technical resistance was breached last June cannot be interpreted any other way. In the space of about a month, gold broke through $1,350 per ounce, and it did not look back until reaching $1,550 per ounce.
But, make no mistake, we are a long way from gold’s ultimate run up.
Rich Checkan of ASI with his Way of the Renaissance Man t-shirt. (Photo by Jim Woods)
As Jim wrote recently, the increased tensions between the United States and Iran caused a short-term spike in gold. This spike only lasted until tensions seemed to subside a bit. As a result, many pundits suggested gold ONLY spiked as a result of the escalated fears of an all-out shooting war with Iran. Don’t believe it. It’s pure nonsense. Gold’s bull market began back in June, long before the assassination and retaliatory missile strikes.
Greed is still firmly in charge of investor sentiment. The equities indices keep making new all-time highs. And, investors are making good profits on paper. Fears of recession have subsided for many, and positive consumer sentiment is prevailing. I think greed will need to give way to fear before the precious metals bull market hits its full stride. This may be triggered by the inevitable market correction, debt default with global impact, recessionary pressures or the weakening U.S. dollar.
One of these factors alone may do it. More likely, a combination of the factors above will tip the scales from greed to fear. In any case, you should be accumulating here for what will come.
In my opinion, the most likely factor will be the U.S. dollar. Right now, the U.S. dollar is in its eighth year of a bull market. Historically, dollar bull markets last from seven to nine years, so this one is long in the tooth. Now, granted, we have seen a number of cycles elongated due to the Federal Reserve’s tinkering with the money supply and, as a result, with the economy. So, this run might exceed the historical precedent for length as well.
But all good things must come to an end. For the dollar, the turn may be underway.
Since hitting a high for 2019 of 99.5 on the U.S. Dollar Index ($USD), the dollar has given back roughly 3% from December to now. When the USD gets below and stays below 95, we should have confirmation that the greenback has entered bear territory. Safe-haven flows should follow, and gold and silver should benefit.
The way I see it, now is the time to accumulate gold and silver. And, depending on your goal, I suggest you consider three options:
1) If your goal is wealth insurance, buy gold. Your premium for this particular insurance policy is cheaper now than it will be in the future. Take advantage of it.
2) If your goal is profit, buy silver. Silver has lagged gold thus far in this metals bull market. Historically, that is typical, but silver does tend to outpace gold in terms of appreciation by the late stages of the bull market. So, right now, silver represents your best opportunity for profit.
3) If you are a trader, sell gold and buy silver with the proceeds. As I write, you can get over 86 ounces of silver for every ounce of gold. As the precious metals bull market matures, that ratio should come down to somewhere between 35 and 50 to one. When it does, you will want to sell silver and buy gold with the proceeds.
Finally, in his article from The Deep Woods on New Year’s resolutions, Jim quoted Yoda, the wise master from the Star Wars series. I suggest you listen to him regarding gold and silver and take decisive action in 2020. So, with respect to adding gold and silver to your portfolio: “Do. Or do not. There is no try.”
That’s the best way I know to enhance your golden vision in 2020. –R.C.
Big thanks to Rich for graciously sharing his expertise on this matter. Yet the real thanks to Rich is for what he’s agreed to do with me next week.
That’s when we will hold a special, invitation only, subscriber teleconference designed to help you learn more about how to own physical precious metals, and to answer any questions you have, LIVE, and absolutely FREE of charge to you.
This event will take place Thursday, Feb. 4, 2 p.m. Easter, 11 a.m. Pacific.
Participating in this exclusive conference call is easy, because you don’t have to call us — we’ll call you!
All you need to do is fill out this form, and then answer your phone when we call.
We’ll be calling you between 1:55 p.m. and 2:05 p.m. Eastern (10:55 a.m. and 11:05 a.m. Pacific) on Tuesday, Feb. 4. Upon answering, you’ll be connected to the conference call for a private discussion hosted by Rich and me.
If you’ve ever had a question on gold, silver, or anything precious metals related, then this event is your chance to hear the answer straight from the foremost expert in the field.
Think of this event as a golden version of learning about astrophysics from Stephen Hawking, or how to coach football from Vince Lombardi, or how to play violin from Itzhak Perlman… well, you get the idea.
ETF Talk: Potential Profits Exist in the World of Robotics
“The real problem is not whether machines think but whether men do.” — B. F. Skinner
While robots have long held sway in the domain of science fiction, their role in the automation of jobs formerly performed by humans has cast a specter over the world’s developed economics and will remain a salient political and economic question for a long time to come.
On the other hand, the disruptive innovation driven by the “Fourth Industrial Revolution” also has given new opportunities for investors. For instance, the ARK Autonomous Robotics ETF (BATS: ARKQ) provides investors with exposure to companies around the world that will benefit from new scientific advancements in the areas of energy, materials, transportation, automation and manufacturing.
One of the most crucial differences between ARKQ and its most direct competitor Robo Global Robotics and Automation Index ETF (NYSE: ROBO) is that while ROBO generally focuses on companies that develop or benefit from automation, most of the companies in ARKQ’s portfolio are involved with the fields of autonomous transportation, robotics and automation, 3D printing, energy storage and space exploration.
The ARK Invest fund’s top holdings include Elon Musk-led Tesla Inc. (NASDAQ: TSLA), Stratasys Ltd. (NASDAQ: SSYS), Proto Labs, Inc. (NYSE: PRLB), Materialise NV-ADR (NASDAQ:MTLS), Xilinx, Inc. (NASDAQ:XLNX), NVIDIA Corporation (NASDAQ: NVDA) and AeroVironment, Inc. (NASDAQ: AVAV).
This fund’s performance has been solid in both the short run and the long run. As of Jan. 27, ARKQ is up 2.38% for the past month and 14.19% over the past three months. It currently is up 3.58% year to date.
The fund has $183.81 million in assets under management and an expense ratio of 0.75%, meaning that it is more expensive to hold in comparison to other exchange-traded funds (ETFs).
Chart courtesy of www.StockCharts.com.
In short, while ARKQ does provide an investor with a chance to profit from the world of autonomous robotics, the sector may not be appropriate for all portfolios. Thus, interested investors always should conduct their own due diligence and decide whether the fund is suitable for their investing goals.
As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.
Celebrating Human Achievement with Edward Hudgins
When you’re a high school student fortunate enough to get an internship with NASA during the Apollo 11 mission, you get to see true human achievement up close and personal.
That’s one of many fascinating anecdotes you’ll hear about in the latest episode of the Way of the Renaissance Man podcast, as I speak with my friend and fellow human achievement lover Edward Hudgins.
Ed is a passionate intellectual activist who promotes reason, freedom, individualism and capitalism through his work as the research director for The Heartland Institute, one of the world’s leading free market think tanks.
Some of the diverse topics discussed in this episode include transhumanism, the development of a neural net, the latest anti-aging science and the brilliance of science fiction writer Arthur C. Clarke. You’ll also hear Ed’s sharp critique of the American education system.
Yet the primary focus of this episode is the advocacy for creating what Ed calls “Human Achievement Day.” That’s a day designed to remind people of how brilliant the mind in action can be, and what better day to do that than on July 20, the anniversary of the day humans first landed on the moon?
If you want to hear two “space nerds” talking about man’s greatness, then this episode is just for you.
The Best Reader Compliment Ever
I get a fair amount of reader feedback from many of the articles in The Deep Woods, and I very much welcome it.
Sometimes I am criticized for my views, but that’s all good to me. The way I see it, that means that I am provoking thought. I also know that disagreement is a healthy component to a deeper understanding of issues, and I’m all about the deepest understanding I can have about virtually everything.
Other times, I receive complimentary feedback on something I’ve written that touches me deeply. Two weeks ago, I received the best reader compliment ever, and I wanted to share it with you.
It came from Christine C., who wrote the following:
Thank you for the beautiful tribute you wrote for Neil Peart. I enjoyed reading a about a man with whom I am not familiar with either his name or his work.
Someone has the same feelings for you as you had for Neil because you have served as a mentor to them, much as Neil did to you. And someday that someone will meet you and tell you how much you mean to them. Blessings such as this are always returned.
May you always have peace, love, light and blessings…
I would like to publicly give my heartfelt thanks to Christine for taking the time to share this beautiful sentiment with me. It’s rare that I am ever at a loss for words, but this letter managed to silence me with a wave of humility and gratitude.
Once again, thank you Christine, and thanks to everyone who reads this publication.
I am honored and humbled by your attention.
A Must Read
This week, I am proud to introduce a new section of The Deep Woods, one that I call, “A Must Read.”
This section will appear periodically, and it will be devoted to alerting you to an article, novel, non-fiction work, blog post, podcast, or even a poem or song that I think readers will enjoy.
For this inaugural edition, I present to you an article in National Review by one of my favorite economists and writers, Veronique de Rugy, Senior Research Fellow at the Mercatus Center at George Mason University.
I call Veronique the “French firebrand,” and if you want to know why, then I invite you to listen to my interview with her from this year’s FreedomFest conference.
In her must-read article, “A Tour de Force, Indeed!” Veronique demolishes the arguments of her fellow National Review contributor Michael Brendan Dougherty.
In his article, Dougherty lauds another writer’s (Daniel McCarthy) views on “the failure of free-market economics,” calling McCarthy’s ideas a “tour de force.” Well, Veronique offers a different analysis, and she puts it in the following elegant fashion:
“I agree. It is a tour de force of unsubstantiated claims, unwarranted conclusions, economic misunderstanding, and silly straw men.”
I love the French firebrand’s writing, and her analytical mind that’s animated by the passion of her convictions.
This is definitely A Must Read!
“I was blessed with talent, but I worked like I had none.”
Like so many people, I feel compelled to address the big news over the weekend of the death of basketball icon Kobe Bryant. Bryant lived in Orange County, California, and his home is very close to mine. While the loss of the “Black Mamba” was profound to the Los Angeles Lakers community, Kobe’s passing also was a global mourning event, as the basketball star was revered and respected just about everywhere.
While we don’t fully know the facts around the helicopter crash that took Bryant’s life, his daughter Gianna’s life, and seven other unfortunate souls that day, what we do know is how Bryant lived as an athlete. That’s why the above quote made it into my list of “5 Favorite Renaissance Man Quotes to Live By.”
You see, given his immense physical prowess, Kobe Bryant probably could have coasted on his innate talent and still been a huge NBA star. Yet it was his attitude and work ethic, which he called his “Mamba Mentality,” that set him apart from the rest, and that made him one of the greatest players of all time. So, I say that whatever you do in life, if you adopt the work ethic and Mamba Mentality of Kobe Bryant, you are likely going to do very well.
Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.
In the name of the best within us,