Tuesday, March 8, 2011

Doug Casey Offers Advice At PDAC

At an interview on the sidelines of the Prospectors and Developers Association of Canada conference, Doug Casey said he wouldn't be surprised to see gold reach as high as $5,000/oz.
"Central banks all over the world are creating trillions of currency units and that in turn is creating lots of bubbles," he said in an interview on the sidelines of the PDAC prospectors and developers convention in Toronto.

"It's very probable that they're going to ignite a bubble in gold and they're going to ignite a really wild bubble in small resource stocks."
He also said exploration stocks aren't cheap now, but there is the potential for huge gains. There's also huge risk, which requires specialized knowledge to navigate.
"For the average person to get into this sector and get overweight in this sector is like giving a six-year-old a chainsaw - it's very dangerous."

The stocks are volatile, the commodities fluctuate in value, they require huge upfront capital to extract, and there are huge political risks. Most explorers will fail.
But, he did say that you only need one huge multi-bagger in a lifetime. He has no plans of shifting from gold and gold stocks until it's clear there's a huge mania in progress: it would be indicated by, say, gold appearing on the cover of Business Week after a huge run.

I think he's right about a real mania developing, not only for gold but also for junior gold stocks. The sad thing about such manias is, the ones who are experienced enough to get on board early tend to shy away when the mania gets rolling. The ones who stick it through to the top tend to go down with the ship. There's a lot of excitement, but hardly anyone winds up rich in the end.

No comments:

Post a Comment