Eric Sprott Say it Best
This is why Newport is a good buy; the paper of Newport is backed by 2 x its value as cash in the bank. This is the market to be in.
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Eric Sprott Say it Best, go for the guaranteed returns;
TGR: Many are saying that the real leverage in gold right now is the equities because they got slammed initially by the gold price going down along with the market going down. So, leverage-wise, as you’re looking at any rebound as the price of gold goes up, the equities will have an even larger multiplier effect. What’s your viewpoint on that?
ES: For sure that’s true. However it depends on exactly what equity we’re dealing with and the status of, let’s say, some gold miner’s project, whether it’s in production, in the exploration stage, high-grade or low-grade, open pit,underground. There are many reasons to want one class over another; if gold goes up, the equities go up faster. And, as you know, since October 24th, from the bottom to the top, the HUI Index was almost up 100% in that short time period.
So, to get to your point, it’s obvious that there’s leverage in owning the securities rather than gold. However it cuts both ways. When we see gold go down, say, 2% or 3% today, we see the stocks go down a lot more.
I guess people would say we’re being pretty defensive owning gold instead of the shares, but we’re happy to make a steady return per year. We don’t need to knock the ball out of the park and, in essence, take on some risk of owning a piece of paper that might not ultimately prove its value.
We do own gold shares and we like gold shares, and I’m buying gold shares now. The most important thing is gold has got to go first, and then the gold shares will get going. We believe in both. It’s not going to bother me if gold under performs gold shares in the environment we’re in. We’re in such an ugly environment that any time you can make a gain, that’s a good thing.