Say it ain’t so Jay! The editor of J Taylor’s Gold, Energy & Tech Stocks newsletter has been a long-time gold bull but his mood has soured (at least for now) on the precious metal. But fear not gold bugs, Jay explains how investors can still make money in this space, and mentions two stocks he likes at this time in Part 2 of our interview coming soon.
SmallCapPower (SCP): You’ve been known mainly as resource investor. Given that there’s little investor appetite for the juniors at this time, do you still see opportunities in this space and, if so, where?
Jay Taylor: I think there’s a good indication we’re nearing the end of the resource bear market because I’m usually one of the last people to give up and I pretty much feel like giving up right now. The reason my newsletter has an energy and tech stock component is because I’ve gone through these cycles before and I’ve had to try and find a way to make money and survive in the difficult times. There’s always been opportunities, obviously, in energy and tech but especially in technology now I think there’s opportunities in the energy sector. So, I’m looking at some things that are very interesting there. Yet I’m keeping my eyes on the gold space and the gold and silver mining shares. I think these bear markets sort of purify and get rid of the chaff and so I think what’s left in my portfolio, the quality is very good but obviously nobody cares right now. Until that changes I don’t think there’s a lot of hope for much upside in most cases. Even companies that have a great intersection the shares don’t seem to respond so the company can’t raise capital to drill it out. It’s one of the most frustrating periods, and I’ve been doing this since 1981.
SmallCapPower (SCP): Do you see the gold price falling below US$1000 an ounce? What’s your outlook for the precious metal in 2016 and what are you doing while you wait for gold to turn?
Jay Taylor: It could fall below $1000, but it’s just an impossible question to answer because it’s all about confidence and it’s all about how long the ‘con game’ can be held in place by the ruling elite, by the central banks of this world who stand to gain and continually gain for its stakeholders so long as they continue to create their inventory out of thin air with a keystroke of a computer. They can redistribute wealth from the people that actually produce it to themselves and then let the politicians talk about taxing the rich. There’s no question in my mind that there’s two markets for gold: a paper market and a physical gold market. I think there is upward of 300 times the amount of paper volume as opposed to the actual amount of bullion that gets traded in London and New York. So, clearly the Federal Reserve-related banking interests are able to swamp the markets and knock the price down and keep a ceiling on it so that the masses on Wall Street never get the idea that gold might be better than the U.S. dollar. So you have to keep the people believing in the Dollar system, and clearly I think that’s what causing a lot of the trouble geopolitically these days, I’m convinced, it’s all about the petro-dollar and maintaining the petro-dollar and that’s why I think we’re fighting the wars in the Middle East, and I think Russia and the other BRIC nations are sick and tired of being abused by the Dollar system. More worrisome to me than where the price of gold is going is the possibility of a nuclear holocaust. I think it’s more real than it’s been certainly since the fall of the Soviet Union.
Will gold ever come back? Well, yes, I guess if we survive as a human race. I think natural laws of economics will prevail, ultimately. We saw that from the fall of the Soviet Union, although we didn’t learn anything from it. I’m really just sort of giving up gold, for the time being, and looking to do other things. And so part of the strategy is to visit some interesting technologies in the energy sector. I’m also writing some covered calls on companies such as Newmont Mining (NYSE: NEM), or GAMCO is a fund that writes covered calls and pays out dividends of about 14% or so. There are some companies here and there in the gold sector.
Please stay tuned for Part 2 of our Jay Taylor interview coming soon!
