Pierre Lassonde - Coming Mania in Gold Will Dwarf that of ‘70s

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goldcountry
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Pierre Lassonde - Coming Mania in Gold Will Dwarf that of ‘70s

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/22_Pierre_Lassonde_-_Coming_Mania_in_Gold_Will_Dwarf_that_of_70s.html

July 22, 2011

Pierre Lassonde - Coming Mania in Gold Will Dwarf that of ‘70s

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When asked if he felt mining shares were way undervalued Lassonde said, “It is (gold shares) way undervalued and this is one of the most interesting facets of the current market as far as I’m concerned. The portfolio managers for whatever reason seem to have stuck their wallets up their rear ends and sat on their hands for the past three or four months.

When you look at the average valuation of gold stocks over the last ten, twenty years and where they are today, they are like one standard to two standard deviations below what they normally trade for. Let alone in the current market they should be trading for, which is one standard deviation above the norm if not more....

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When asked about John Embry’s prediction for the HUI (Gold shares index) to double in the next six to twelve months Lassonde said, “Can his prediction for the index (HUI gold shares) double, I think he’s probably low, I think we are going to see more than that. I’m totally convinced because the gold stocks are way undervalued, so I’m looking at a very strong performance of the equities vis a vis the bullion in the next 18 months.”

When asked if the coming mania in gold will make the ’70’s run look like child’s play Lassonde responded, “Well it will because in 1980 the only players were the Americans, they were essentially the only players in the gold market, or the dominant players.

Today the dominant players are China and India, 58% of all the gold sold this year will be sold in these two countries. So they are by far the dominant players and as I’ve said the Chinese love gambling. When we reach that phase (the mania) I told you and I will tell anyone who wants to listen, watch out because it will truly make your head spin.”

Edited by admin on 11/08/2014 - 06:20
metcoalfan
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Like a tightly coiled spring of highly enriched uranium....

I stand in almost daily disbelief of the prices that I'm getting these miners for - and it would be the same if they were dealing with any product given the actual revenues and potential revenues - that they deal in gold given all the structural imbalances across the globe is just a gift.  I feel like I'm sitting on the front end of the dot com boom, knowing then what I know now - but many of the companies, the producers, are actually cash flow rich on the front end, as opposed to never being so.   People just don't understand money - mostly because they don't want to, and the institutions of modern society encourage that.  Something at some point is going to roost the masses from their couches, it seems inevitable.   My feeling is that it will be consumer staple prices.  I've been paying very close attention to these for the last 1.5 years while building up reserves of shelf stable nutrition.  This was in lieu of buying physical - why pay a 10% premium to spot for bullion when I can stock up on what I would trade it for at 75% off - using coupons and store promotions in combo.  What I've noticed over the past several months is that the deals are rapidly disappearing, I can see it almost by the week and definitely by the month.  It has been confirmed in the qtrly conf calls of the big food conglomerates - they are being pinched by input prices and the first cuts have been in the promotions dept.   Those are pretty much gone - now there isnt much left but the actual everyday shelf price.   Crash courses in 'What is Money 101' are around the corner.  When the miners start to move in earnest - they will become very conspicuous, imho.  Virtuous circle style.   One of my favorite local tools is a site called www.dailymoneysavings.com - they show weekly advertised prices and available coupons - when I find the time I need to go back and run some comparisons on prices AND coupon combos a year ago as compared to now. But for now, I'm more preoccupied with loading my coiled spring ever tighter.  

zman
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Under valued miners

I listened to an interview from Bob Chapman yesterday, he was trading and investing in gold stocks during the 1970-80 time frame.

He said current PE's on the gold and silver stocks are around 6-10, I agree as well, some are even trading under 5. During 1978, the PE's were at 150, so in reality, the miners have a long way to go. Hell, I would happy to see 30-40 PE's, that would give us 5-6 times current prices, unreal.

metcoalfan
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My informal channel checks Stateside

For the past 20 odd years I practiced as a CPA in Florida, small town with a large retirement community.   Most of my clients had returns that were almost entirely comprised by handling their portfolio transactions.  Never sold product - felt it would be a conflict of interest even after the State allowed us to do so 10 years ago.   Fortunately, that left my clients quite trusting to discuss their brokers advice with me as well as review their holdings each year.  98% have zero gold exposure.   Maybe 5% this past year expressed frustration that they told their brokers they wanted some gold exposure and their brokers talked them out of it.   I never waste a call to a broker to request needed client docs without asking them their opinion about PMs (I keep my opinions to myself with them).  As my partners can attest - 'what a dumb ass mutherfucker' is what normally follows the click of the handset meeting the base.   I think that structural ignorance and bias explains much of the pricing phenom.  9 out of 10 brokers are glorified car salesmen - they will never understand the products they sell (beyond the commission structure), they don't need to, but they will turn turkey on a dime and start pushing PMs & miners the second their back offices induce them to do so.  All to say, there is way less than 1% saturation in the retail portfolios (and it amazes me because I have some savvy retired clients and yet it's still that way) and its still being held back. 

Eric Original
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Hey metcoal!!

Fellow CPA's unite!

I echo your sentiments about clients portfolios and their brokers.  It's all a racket.

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This isn't a metals blog anymore. It's a right wing circle jerk, masquerading as a metals blog.

metcoalfan
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You still practicing Eric?

I sent most of my clients a letter this past January that I would help them find a new CPA. Very hard to do. What people won't tell their priest or pastor, they unload on their CPA. Are they really having this discussion in front of me? Half of me wishes I majored in Geology, the other half knows I wouldn't see the forest for the trees otherwise. The spry old ladies are the wise ones....I kept only them.

Eric Original
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I took the road less traveled by

I was a relative newbie in public accounting back when our first child was born.  Given the inherent seasonality in the business, we decided it made sense for me to be the "stay home Dad" and for my wife to work full time.

I've become quite specialized in individual taxation over the years.  So I now spend tax season working like a demon, reviewing 1040's, and then take the rest of the year off, working on the "Father of the Year" award.

The only problem is that the kids are now 19 and 15 years old, and they really don't need me around!

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This isn't a metals blog anymore. It's a right wing circle jerk, masquerading as a metals blog.

metcoalfan
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A Golden Decision

Great call Eric.

I'm a big Martin Armstrong fan, especially his claim that confidence is the unifying variable. As boring as it was for me (too tedious especially the last few years: did you buy a car, did you replace your a/c.....what was the seer rating? Aggghhhhhh), it did give a superb insight into changing confidence levels, which comes back full circle to the theme of the thread, when confidence truly starts to break, and physical gold is hard to find, the miners will fly

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