NEWS &VIEWS
Forecasts, Commentary & Analysis on the Economy and Precious Metals
Celebrating our 49th year in the gold business
January 2022
“I have found throughout my long investment career that an investor needs to make very few investment decisions in their lifetime. The key is to identify a long-term trend as it begins to emerge, invest in that trend, ride it until it ends and another trend replaces it. – James Puplava, Financial Sense
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‘Complete paradigm shift will make gold the generational trade’
Billionaire investor says it will reach $3000 to $5000 as secular bull market resumes
Wall Street billionaire and financier Thomas Kaplan (who once said, “I’m no insect; gold is a great way to make a lot of money.”) is among the group of analysts who believes gold is in the early stages of a new up leg in its long-term secular bull market. Though Kaplan made his fortune in the mining business, he is also an Oxford-trained historian (with a Ph.D.) capable of putting gold’s current price trend in the context of a longer-term cycle – one he believes has not yet reached full maturity. (Please see chart below.)
“Let’s put it this way,” he says in a memorable interview with Stansberry Research’s Daniela Cambone, “gold still remains on Wall Street and in the west probably the most under-owned, least crowded trade in the global financial markets. … The era in which gold was the asset which people loved to hate and hated to love is starting to come to an end. We’re still in the very early innings. It’s still a smart money trade as opposed to a big passive money trade but that’s about to happen.” The next leg up, he believes, will be driven by what he calls “bold-faced” names now involved in the gold business. Kaplan, in that regard, mentions Warren Buffett (who at the time of the interview had just purchased stock in mining giant Barrick Gold), Mohamed El Erian, Mark Mobius, Ray Dalio, Paul Tudor Jones, Jeffrey Gundlach, and Kenneth Rogoff. (Long-time readers of this newsletter will recognize that list of notables as abbreviated.)
“The difference is this,” he concludes. “The market is now ready for the next leg of the gold bull market. The first leg was the one that took us up 12 consecutive years in a row regardless of whether there were inflation fears, deflation fears, whether there was a glut of oil or a shortage of oil, political stability or political instability, dollar weakness, dollar strength. It didn’t matter. Every year for 12 years gold went up. The next move is going to be a third wave, a long wave that lasts for a decade or fifteen years, maybe more … I think that you really are looking at a complete paradigm shift that will make gold the generational trade.” From there, Kaplan goes on to say that gold will reach $3000 to $5000 in the years to come.
Chart courtesy of Merk Investments • • • Click to enlarge
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