Saturday, July 25, 2015

There's No Gold to Buy!



Thursday, June 25, 2015

Sprott Carries No Debt

“We want to double our business in the next three years, and we can do that by offering different kinds of products,” Wilson said.

Sprott Asset Management, the unit run by Wilson, has made an offer to buy Central GoldTrust and Silver Bullion Trust via a share swap valued at about $898 million. The offer for the Canadian trusts, which buy and hold gold and silver, expires in July.

Sprott would consider opportunities similar to its proposal for the two trusts should they come up, Wilson said.

“I expect acquisitions, tuck-ins or larger,” Scott Chan, an analyst at Canaccord Genuity Corp. in Toronto, said by phone. “Sprott’s been looking at acquisitions, they have a strong balance sheet. They have the people to manage C$15 billion, they’re just half-way there.”

Sprott carries no debt and had C$119.6 million in cash and near-cash items on its balance sheet, according to the company’s first-quarter filings.


- Source, Bloomberg

Saturday, June 20, 2015

Sprott Sees Assets Doubling as Braces for Bull Market End

Sprott Inc. aims to double its assets to about C$16 billion ($13 billion) in the next three years by adding consumer and technology stocks to legacy gold holdings as the equity bull market nears an end.

While the Canadian money manager is positive on U.S. and European growth, it’s also bracing for volatility as central banks raise interest rates, said John Wilson, chief executive officer of the firm’s asset management unit. He’s invested in more defensive stocks such as Alimentation Couche-Tard Inc. and CGI Group Inc. that are geared towards international growth.

Canadian software provider Shopify Inc.’s 51 percent surge on its New York trading debut in May underscores the bull market’s advancing age, Wilson said.

“That’s not the start of a bull market cycle,” Wilson said in an interview in Bloomberg’s Toronto office. “That tells you where we are in the equity cycle. My best guess is we have a year or two left.”

Sprott, founded by gold investor Eric Sprott in 1981, hired Wilson in 2012 to help diversify the firm as the precious metal tumbled. Assets edged up to C$7.8 billion in the first quarter after sliding to C$6.97 billion at the end of 2013 from a peak of C$9.93 billion in 2012.

Non-resource assets now make up about 75 percent of Sprott’s actively managed funds, compared with 27 percent in 2012, the company said.

Sprott has risen 4.5 percent to C$2.55 this year, compared with a 3.1 percent gain in the Standard & Poor’s/TSX Composite Index. It’s down almost 75 percent from a 2011 peak of C$9.60.

- Source, Bloomberg


Friday, June 12, 2015

I Remember My First Period of Catastrophic Losses


Rick Rule of Sprott Global talks about some of his experiences in the investing world. Even the greats make mistakes from time to time.

Monday, May 25, 2015

Billionaire Eric Sprott Says Stock Market Will Crash, Not Gold

“Well, God knows when the dust settles, but what I’ve expected for a long time now is that the basic fundamentals for gold and silver will win the day. That hasn’t happened yet. It hasn’t happened because entities have financial weapons that they can use on these commodity exchanges and the physical buying hasn’t gotten to a point where we have the failure (of an exchange to deliver)….

But I think it’s reasonably predictable that we are going to have a failure. All of the demand data and the reasons for owning gold have improved. We all know that zero interest rates and printing money has not provided the answer and won’t provide the answer.

The only thing it does is it allows people to speculate on buying securities, but it’s not helping the economies. In fact, there are elements of the economy that are doing worse. The savers are way worse off today than they were before. They are forced to speculate in order to get returns. By speculating they are taking on greater risk.

But there is no recovery. You just have to take the comments of the various people at companies and they keep saying, ‘The consumer is tapped out here and it’s not likely that we are going to experience much growth.’ So how can you have stocks keep going up when there is no commensurate economic recovery?

But the framework for gold and silver and other precious metals to do well is more incredible today than it’s ever been. And you can have (crazy) readings in these (stock) markets — I’ve experienced it. Going into 1999 – 2000, everyone was buying Nasdaq stocks like crazy. Ultimately the day came when the whole index crashed by 75 percent, and that’s what I think is going to happen here. The stock market is going to crack.

- Source, Eric Sprott via King World News

Wednesday, May 20, 2015

Silver Is One Of The Greatest Opportunities In World History

“Normally when there is a price decline like we have recently seen on the Comex, the longs are flushed out and the shorts reap their profits. But despite continued pressure on the price of silver, the longs are not capitulating. If anything they are digging in and the open interest is growing, which is unheard of.

The open interest in the December trading contract, which matures in 17 trading days, dwarfs the available inventory on the exchange. So it will be very interesting to see how this situation unfolds. When you put that into the context of the fact that silver is now trading dramatically below what it takes to extract an ounce from the ground for a pure silver producer, it really demonstrates the absurdity of the situation.

With a price that has been under so much pressure, this would normally suggest that silver demand has been weak and the market is being overwhelmed by supply, but that’s not the case. The demand for silver coins from the U.S. Mint has risen dramatically and there has been continued demand from the industrial side, which takes up the lion’s share of supply.

People have to remember that in the aftermath of World War II there were massive inventories of silver in the world. And following the Hunt Brothers attempt to corner the market in the 1970s, above ground inventories remained huge. But all of these above ground inventories have been absorbed as physical demand has outstripped mine supply for many, many years.

Also, the majority of silver mine supply comes as a result of base metals mining. With the world now moving inexorably toward a recession/depression, and with excess supply everywhere, the demand for base metals is going to decline sharply. This will curtail production and mean there will be less silver byproduct.

So I see an extremely positive supply/demand situation building here at a price that is remarkably discounted for silver. What doesn’t get discussed is the fact that not too long ago roughly 1/3 of the industrial demand for silver was related to photography. But all of that demand from photography has disappeared and been replaced by solar demand, medicinal demand, etc.. And these new sources of demand continue to grow well beyond what we used to see from photography.

But because the paper manipulation is beyond remarkable, silver remains as undervalued an asset as I have ever seen. As an example, in the last 135 trading days the silver price has declined in the thinly traded access market 130 times at the open. So to be clear, in the early hours of the east coast of the United States silver has declined at the opening of trading 130 out of the last 135 trading days. That is preposterous. And some of these declines have been precipitous.

This is purely manipulation by high-frequency and algorithm programs and it sets the tone for each trading day and permits the powers that be to keep the pressure on the price. This is all part of how they attempt to keep the public away from gold and silver. But gold and silver are the only real money and it remains the arch enemy of the failing fiat currency system. So the central bankers are in overdrive here trying to discredit gold and silver.

Sadly the Western governments and central banks have failed their citizens and are now trying one last time to keep things afloat. Unfortunately they are going to fail, and all investors can do as that day of failure rapidly approaches is to own physical gold and silver in order to protect themselves. This is the most dangerous time in world history, both economically and financially — strictly on the leverage in the financial system — and the sad truth is that I don’t even think we are going to recognize the world when this is over.”

- Source, John Embry of Sprott Global via King World News

Friday, May 15, 2015

Coming Mania In Gold And Silver Will Be Epic

"You will also remember that anybody who got shaken out in the period from 2000 – 2002, missed the market between 2002 – 2006, and that was an epic move by any imagination. And my suspicion is that when this up-market gets going in earnest in the gold and silver sector, it too will be epic by anybody’s imagination.

The bull market in gold will be global this time around. Meaning China, India and other big gold-buying countries will be involved in the mania. Also, the Western countries are in substantially worse shape today in terms of dealing with the problems that we find ourselves in. So you have two strong reasons why this market could eclipse the mania that we saw in the gold and silver markets from 1976 – 1980."

- Source, Rick Rule of Sprott Global, via a recent King World News interview

Tuesday, May 12, 2015

Fortunes Will Be Made

The truth is that in all the prior cycles the money that I had invested in the market went up 10-fold in the rebound. The difference today is that I have much more money to work with and a much stronger team at Sprott. And I would suggest to you, Eric, that the KWN readers who maintain the cash and the courage to be involved through this down-cycle and into the up-cycle will be similarly rewarded.

What I don’t know is exactly when this up-cycle will begin in earnest. Make no mistake about it, I think we are already in the early stages of the up-cycle, but you will remember, Eric, that the last up-cycle, beginning in July of 2000, didn’t feel apparent to most of the market in 2002.

- Rick Rule of Sprott Global, via a recent King World News interview

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