Brutal is one word to describe the past year’s oil market, yet it could get worse before it gets better, says stock market commentator Peter Grandich. He does, however, see opportunity amongst the chaos and also believes gold has reached a crucial point in both time and price.
SmallCapPower spoke recently with long-time stock market commentator Peter Grandich. Mr. Grandich is the founder of Peter Grandich & Company, which provides business, retirement and estate planning services to individuals, business owners and professional athletes.
SmallCapPower (SCP): Welcome back Peter! Now that the Federal Reserve has started raising interest rates, what effect do you think this will have on the U.S. economy and its equity markets?
Peter Grandich (PG): I think they will be hard-pressed to have many raises, as it should become evident soon that the U.S. economy is dramatically slowing along with the world economy and the so-called job recovery isn’t all it’s cracked up to be.
SmallCapPower: Given that the gold price has been falling for more than four years now, do you think anything will change in 2016? If so, what do you think the catalysts will be?
Peter Grandich: While gold has fallen more than most of us thought it could a few years ago, it’s come to a crucial point in both price and time. Whether it breaks below the psychological $1,000 level or not, it truly feels like if one has a 3-5 year horizon, the reward potential from here is many times the risk potential.
SmallCapPower: Do you think the Federal Reserve will have any effect on the price of gold?
Peter Grandich: When haven’t they openly or behind closed doors? It’s never in their best interest to see gold rising and if people don’t think gold is manipulated, I’ve a bridge I like to sell them.
SmallCapPower: Are you still involved in the junior resource market? If so, where do you see the opportunities for 2016?
Peter Grandich: I’m not but I can tell you whatever rises from the ashes will be in a resource market that no longer resembles what we once knew it to be.
SmallCapPower: Which other sectors and stocks do you like at this time and why?
Peter Grandich: From about $90 a barrel, I’ve spoken about oil reaching as low as the $20s. We’re now seeing classic signs that the last stage of this vicious bear market is at hand. Little or no debt loaded oil related companies are going to have great pickings to by companies that just a few years ago would be too expensive but now will go for a song.
Editor’s Note: In a recent blog posting, Peter Grandich wrote about why he believes the bear market in oil is entering its final stage and offers up some tips for investors looking to enter this space.
Find out more here >>
More insights from Peter Grandich can be found at his website, Peter Grandich & Company.
As well, see his previous SmallCapPower interview here >>
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