I was racing Ferraris, Lamborghinis, and Dodge Vipers outside of Dallas, TX last summer.
It was such a thrill that I booked another experience in two months just outside of Los Angeles.
Driving a fast car is similar to investing – the adrenaline rush, the turns, the need to look ahead, the necessity to analyze video later to see where you can gain another split-second advantage, and lastly, the desire to increase the skill of the driver.
Two people can drive the same Porsche, yet one can do lap times, which are much better than the other. In those instances, the difference is in the driver, not the car.
Another significant component, which makes an enormous discrepancy between two similarly skillful drivers, is their mindset. While one is overly cautious, the other can wait another few meters before finally pressing the breaks, gaining a critical advantage – he has mastered fear.
Racing cars is an art, which requires unique mental fitness, just like investing. Yet, most people, when asked if they can beat a professional race driver in a 1*1 duel, know that they don’t stand a chance, while most part-time investors, who don’t even thoroughly study the companies they own, always have the nagging hope that they are onto the next holy grail.
For most investors, the best formula is to own an index fund, which tracks the S&P 500, hold 20% cash, own some real estate, and be done with it. They should focus on their main career. But for us, who are driven, educated, hard-working, and diligent, giving up the “extra juice” that comes from bargain hunting, is next to sin.
Courtesy: U.S. Global Investors
While the world’s developed economies have been closing down debt levels for the past 4-5 years, the U.S. is exploding in debt and deficit spending.
I’m absolutely shocked that Americans keep letting their elected officials run this giant casino economy.
While the government keeps pushing the limits on what debt levels could be for a developed economy, the private sector, made up of people like you and me, are building businesses and expanding the U.S. economy again!
As you can see, the demand for commodities in this part of the business cycle is overwhelming.
There is no time in history, going back 30 years, where miners were able to meet this surge, which comes when economies, especially the U.S., are growing.
When economies are getting larger, the need to shrink the balance sheets of central banks becomes vital.
The Fed’s balance sheet shows a total drop of $104 billion since the beginning of the QE Unwind in October – its lowest level since June 11, 2014.
Courtesy: U.S. Global Investors
The commodities boom hasn’t started yet, though, not even close.
Even the 2016 roar looks like an insignificant anomaly in the chart above.
Unlike 2015, though, the case for a gold stocks rally is real.
Contrary to the conditions from three years ago, which were bleak for the global recovery, Portfolio Wealth Global is confident the recovery is OVER. We’re actually outpacing projections, hiring personnel, and looking for more qualified people.
This is expansion – the next stage in a business cycle.
The average person doesn’t want to hear that gold and silver are “headed to the moon” anymore.
The “gold experts” have screamed about gold since 1971, and it has caused individuals to give up on the metals. Gold rarely “goes to the moon,” so no need to get excited, unless it is one of those rare times.
In early 2017, Portfolio Wealth Global was founded. Since then, gold is up big, but the gold stocks, and to a great extent, all commodities stocks, have performed miserably.
Look at this eye-opening research from Goldman Sachs, and you’ll see why the day of reckoning has arrived for tech investors who thought they could do away with supply constraints for good.
While money was concentrated in technology, the money devoted to drilling and exploration has been scarce. So, just when the economy is growing and opportunities to make money in tech stocks are all but gone, since the sector is hot, there is a shortage of 13 out of the 24 leading metals!
If you’re already positioned and have been crawling in the sewer, looking for the exit out of the mud pool that has been the junior mining stocks, you can start seeing the light, and it is a state-of-the-art projector.
Commodities are the best-performing asset class of 2018 thus far, so hedge funds will begin to follow the trend, and we’ve done our homework on the highest-quality ones.
The battleground has changed, and commodities have the upper hand now. I expect the next two years to be the most profitable in my career.