Jim Rickards Strategic Intelligence Gold update today:
Gold is now in its third great bull market since 1971. The first bull market lasted from 1971 to 1980 and saw the price of gold increase over 2,200%. The second bull market lasted from 1999 to 2011 and saw the price of gold increase over 750%. The third bull market started in December 2015 when gold was at $1,050 per ounce. So far, the price of gold has increased over 70% in this new rally, but it still has much further to run. Taking a simple average of the last two bull markets would put the price of gold at $15,000 per ounce by 2025. Of course, gold could do much better than that if it tracked the returns of the first bull market only. But before gold gets to $15,000 per ounce, it has to get to $3,000 per ounce from the current level of about $1,800 per ounce. One of the savviest gold traders in the world sees gold hitting $3,000 to $5,000 per ounce perhaps as early as 2023. According to this article, hedge fund manager Diego Parrilla, who leads the hedge fund Quadriga, sees gold surging along those lines. Parrilla has produced 47% returns for investors so far this year with a blended portfolio of Treasury notes and gold. He bases his gold forecast on continued low interest rates and the creation of new and dangerous asset bubbles in other asset classes such as equities. Central banks cannot raise interest rates without sinking stock markets and bursting a corporate debt bubble. Rates will have to remain low indefinitely, and that’s an ideal environment for higher gold prices. There’s more to the gold bull case than just low interest rates. Demand is up from central banks seeking to diversify away from U.S. dollars. Supply is limited by the inability of the mining industry to locate significant new sources of gold ore. Existing holders of gold are unwilling to sell in many cases because they can see the economic stress caused by the pandemic and are expecting a wave of corporate bankruptcies in the coming months. Strong demand, flat supply, low interest rates and fear of credit losses are a perfect recipe for higher gold prices. The path to $3,000 per ounce per Parrilla’s intermediate-term forecast and to $15,000 per ounce per my longer-term forecast is clear. The good news is, with gold at $1,800 per ounce today, it’s not too late for investors to enter the market and enjoy the ride.
Interesting Ed Bugos TDV shorts today going into the election correction...
Big Short / Swing Trades [5-15% stop loss; 3-4 months hold max; 30-50% gain potential]
Sell to Short Apple, Inc (AAPL:NYSE) at $360 or better
Sell to Short Facebook, Inc (FB:NYSE) at $225 or better
Sell to Short Intel Corp (INTC:NYSE) at $57 or better
Sell to Short Walmart (WMT:NYSE) at $125 or better
Sell to Short Disney (DIS:NYSE) at $110 or better
Option Trades [50% stop loss; 100-900% gain potential]
Buy to Open Sep 2020 FXF $100 Calls at 35 cents or better (OTM)
Buy to Open Dec 2020 FXC $78 Calls at 20 cents or better (OTM)
Buy to Open Dec 2020 FXE $105 Calls at $4 or better (ITM)
Buy to Open Sep 2020 QID $12 Calls at $1 or better (OTM)
Buy to Open Dec 2020 WMT $95 Puts at $1 or better (OTM)
Buy to Open Oct 2020 DIS $85 Puts at $1 or better (OTM)
Buy to Open Dec 2020 TBT $20 Calls at 30 cents or better (OTM)
The 6:57 AM PDT gold price for July 21, 2020: Gold $1839.38/oz + 21.12
The 7:00 AM PDT silver price for July 21, 2020: Silver $21.10/oz + 1.17
Whoa perhaps Elon Musk using Tesla stock profits to stock up on silver stocks for his Solar City and Space ops... Not sure how much silver in each Tesla vehicle?
Greg Hemke TF Metals report that years of JP Morgan Silver Futures pumps and dumps no longer work now that traders demanding physical delivery at the low dump prices depleting JPM vaulted silver at the CME... Historical Gold/Silver ratio natural in the ground is 16... Silver has much higher industrial demand than Gold.
$1839.38 / 21.10 = 87.17 still high.
Today's Silver $1.17 oz and rising pump is quite dramatic popping over $21 per ounce considering it was less than $13 a short 6 months ago...
Truist also has a healthy stream of non-interest income, including roughly $600 million per quarter from the insurance brokerage operation.
Trading at just 11 times forward earnings estimates, generating respectable returns on assets, and paying a hefty dividend (5%), we think TFC stock could rise to $50 in the year ahead, and generate a total return of nearly 40%.
ACTION TO TAKE: Buy Truist Financial (NYSE: TFC) up to $42 per share. (TFC = BB&T and Suntrust Merger)
Here are a few of the markets in which L3Harris competes. They are all expected to grow much faster than the U.S. defense budget: next generation avionics, night vision, GPS, aircraft missionization, electronic warfare, and tactical radios. These are all necessary to maintain the U.S. military’s technological edge, so budgets for them will be generous.
L3Harris’s financial metrics compare favorably to peers in the defense sector. It has higher operating margins, better conversion of net income into free cash flow, and a healthy balance sheet. And that’s before considering the efforts underway to eliminate redundant costs at the newly merged companies.
Cost savings include consolidating a footprint of more than 400 work locations, leveraging the legacy companies’ combined $8 billion in purchasing power for better terms from suppliers, and combining headquarters, IT and finance functions. Management is about a year ahead of its goal of $500 million in annualized cost synergies from the merger. That’s very meaningful for a business with an $18 billion revenue base.
Due to its significant revenue growth potential, the stock could reach a valuation of 22 times free cash flow in the year ahead. Our estimate for 2020 free cash flow is more than $13 per share, so we have a target price of $290. That’s 70% upside for a stock that’s supported on the downside by a defensive, bond-like income statement.
ACTION TO TAKE: Buy L3Harris Technologies (NYSE: LHX) up to $190 per share.
If I did not know better I would think the Robinhoodies have discovered Silver and pumping it, we are making a major B wave top on S&P so more likely a flight to quality as BTC, Gold and Silver all pumping:
3:11 PM PDT silver price for August 06, 2020: Silver $29.16/oz
It is tempting to get into silver, but considering that it historically has been more linked to industrial uses and not quite the hedge that gold has been considered, I haven't opened a large position. Nonetheless, the price difference between gold and silver has never been more stark, and silver is looking mighty cheap in comparison.
Given the constant debasement of the USD by the powers that be, I suspect gold, silver and crypto will continue on quite a bull market run that won't lose steam anytime soon.
I'm still mostly on the sidelines but am holding all commodities for the long (5-10 year) term. If we do get a correction in the coming months, I'll be buying even more. I find that with these I am almost guaranteed good, steady gains and have no significant downside risk. I don't need the roller coaster when I have that low risk and solid asymmetry on the upside.
New 52-week highs (as of 8/5/20): Agnico Eagle Mines (AEM), Amazon (AMZN), Alibaba (BABA), BlackLine (BL), Sprott Physical Gold and Silver Trust (CEF), Cognex (CGNX), Emergent BioSolutions (EBS), Equinox Gold (EQX), Fidelity Select Medical Technology and Devices Portfolio (FSMEX), VanEck Vectors Gold Miners Fund (GDX), SPDR Gold Shares (GLD), iShares U.S. Home Construction Fund (ITB), KraneShares MSCI All China Health Care Index Fund (KURE), Maxar Technologies (MAXR), Midas Gold (MAX.TO), Match Group (MTCH), Osisko Mining (OBNNF), Pan American Silver (PAAS), Palo Alto Networks (PANW), Flutter Entertainment (PDYPY), Sprott Physical Gold Trust (PHYS), Polymetal International (POLY.L), Sprott Physical Silver Trust (PSLV), Rollins (ROL), ProShares Ultra Technology Fund (ROM), Sea Limited (SE), Sabina Gold & Silver (SGSVF), Global X Silver Miners Fund (SIL), iShares Silver Trust (SLV), Silvercorp Metals (SVM), Trulieve Cannabis (TCNNF), TFI International (TFII), Torex Gold Resources (TORXF), The Trade Desk (TTD), Victoria Gold (VGCX.TO/VITFF), Vanguard Inflation-Protected Securities Fund (VIPSX), Vanguard Short-Term Inflation-Protected Securities Index Fund (VTIP), and Zebra Technologies (ZBRA).
These include some of the best Gold and Silver equities...
What do you all think of platinum? Seems like it's half the price of gold right now. More scarce as well. I didn't give it much thought but then remembered that the 2 trillion dollar coin was made from it and I can't see it falling too far behind gold. Seems like the contrarian move right now