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Malcolm H. Gissen & Associates president Malcolm Gissen on opportunities in the commodities sector.
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My next guest things commodities are -- hot place to invest just need to know where to look of course joining us now is encompass Fonda co manager him.
Malcolm gets & Associates president Malcolm -- himself.
Thank you for joining us OK so.
Hopefully you can hear me getting -- Malcolm.
Yes I -- excellent -- -- right.
OK so look excellent opportunities with commodities where are you where are those opportunities what do you like.
Well we like gold we think long term gold prices we'll continue to climb.
As you know gold has increased twelve -- consecutive years it was up about five point 3% last year.
Interestingly the gold companies did not fare well the last two years the large cap gold companies according to an index.
Declined about 1213%.
And the small -- companies declined 22%.
Last year.
We believe that the gold companies.
Will rebound.
Over the next couple of years we think it's a good place to be invested.
That's one of the areas we like.
We also like oil.
-- -- oil prices will remain very high it makes it very profitable for companies that are focused more on oil and natural gas -- And then we also like uranium.
And copper.
Why uranium that's somewhat unusual as being somewhat -- sector if you like in the commodities is often overlooked but why do you like -- I think we're going to hear a lot more about the demand for you -- him.
After Fukushima all of the uranium companies lost more than 50% of their value across the board.
Since that time it's apparent now that more than forty nuclear reactors are being constructed around the world.
And supplies are not keeping pace.
In addition -- your audience may be interested knowing.
That the United States has the most nuclear reactors of any country in the world 104.
Yeah and -- 11 duke announced today that they were shutting down one of those reactors and what we still have the most in the world.
And our reactors.
And and our utilities get 45% of -- -- their uranium.
From the decommissioning of Russian weapons systems.
In truly believe it.
-- and that trading is going to expire at the end of this year mr.
Putin has indicated he will not renew it.
So we believe that uranium prices will be climbing.
And that companies that are in production like chemical.
Like you we see like URG that get into production this summer will all perform well over the next few years.
About -- -- Platinum silver is basically doubled in the past two years platinum is up 63%.
You like those.
Yes we do.
Platinum -- as as risen partly because of the problems in South Africa which produces more than 90% of the world's platinum I believe.
In the case of silver silver has a lot more industrial applications than gold.
We like silverware in the fund we have in the encompass fund we have significant exposure for over we think -- silver companies will do particularly well.
Silver Wheaton SLW is one of the companies that we particularly like it's a royalty company they get a percentage of the silver and now some gold.
From the companies that they.
Investing.
In.
And quickly Malcolm what I found in things you prefer the upside of the company's rather than the commodity.
Itself so what's the key thing you look fall when you considering a company.
-- at the very good point and a good question.
I think I mentioned the last couple years the gold companies have underperformed the commodity.
Over time they will catch up and gold companies give you more exposure to gold so if you believe gold prices are going up because of all the factors about.
The the countries in the world that are printing money the devaluation of currencies the concerns about wars.
And you think gold is going up the companies are -- better way to play.
Gold over the next couple of years and looking for those companies one very important factor that I think investors overlook.
Is the cash that the company's half -- the access to raising money.
It's essential that these companies continued to have money to fund their their development and they're drilling.
And when they run out of money they dilute the shareholders yes -- terrible event for shareholders.
So and analyzing companies look -- for companies that have very good resources and have access to capital.
Very good lots of great information Malcolm I guess -- Malcolm thank you so much for joining us.
