A Juxtaposition:
Jan 2008: Gold at $846 – Kinross Gold Corp $23.21 – Newmont Gold $58.40
Mar 2012: Gold at $1694 Kinross Gold Corp @ $9.90 Newmont Gold @ $54.20
Bob Moriarty is a fascinating, and very wise man. The youngest naval aviator in the Vietnam war who survived 824 fighter aircraft missions, Bob had a weight problem when he was 22………given he was draped with 42 Air Medals and three Distinguished Flying Crosses when promoted to an Air Force Captain. Moriarty also holds 14 International Aviation records and simply stunned the French when he flew a Beech Bonanza through the Eiffel Tower arches.
But that’s not why Michael Campbell of Money Talks wanted to talk to Bob. No, Mike wanted to talk to Bob because his entrepreneurial mindset and wisdom motivates a 100,000 people a day to visit his 321Gold.com. Why? Because Moriarty has simply made those daily visitors money. Bob was so convinced gold/silver were at a bottom in 2001, he started one of the first websites devoted to teaching readers what they need to know about investing in resource stocks, and what a success that has been.
Ever looking for opportunity, Bob travels to dozens of mining projects a year and then writes about them. That’s why Michael thought there was no-one better to ask whether mid-tier and major Gold producing Gold companies are currently cheap and a bargain or in BIG trouble. Given Gold producer’s shares are trading at 2008 prices or lower despite Gold having exploded upwards close to 250% from its 2008 low to March 9th’s close of $1711!
When asked the whether the “Flash Crash” was important and whether Gold shares are a bargain here, Bob explained it like this: “If you were going to buy a new Cadillac, and the car was a $1000 cheaper than the price you thought you were going to have to pay, you’d think that was a good thing. But we have a whole group of Gold Bugs who when Gold gets cheaper to buy literally get into a panic, whereas I think it is an opportunity”. Well that’s pretty clear. By that measure Gold producer’s shares are remarkable opportunity here.
As for the significance of the “Flash Crash”, Bob thinks that ultimately we will find out that rather than Central Bank manipulation “we will find out that somebody big had to meet a margin call, even then after the Flash Crash Gold immediately turned around and went higher and I think that is a good thing”. When asked why there appeared to be little concern about the prices the liquidator got on the day of the Flash Crash, Bob said “you’ve got to understand that the World’s Financial System is right on the lip of a major crash” that there will be things that are happening all the time, with time bombs going off everywhere, but its as simple as “if you like Gold at $1700. you have to love it at $1600″.
How to make sense of Gold Producer’s shares trading at equal to or less than prices they were trading at in 2008 when Gold was in the $600’s.? “If you are going to make money in investing, what you always want to do is buy irrational behavior. If you see something deviate from the mean, you know that sooner or later it is going to regress to the mean. With $600 Gold in 2008, in relative terms Gold Shares are cheaper today at $1700 Gold than they were back then. Now rather than that be a cause for panic, its an opportunity because when something deviates from the mean its going to come back. So there is an incredible opportunity right now because anyone who is in production is going to be making money hand over fist. We have $33.Silver and that too is an incredible opportunity. So instead of whining, people should be getting there checkbooks out and saying I want to buy”.
One of the factors that is affecting Gold Share prices comes in the form of Gold Bullion ETF’s, where people can invest giving them complete exposure to the price of Gold Bullion, but at the same time that diverts money away from Gold Shares. “Face it, people are goofy, they do irrational things all the time. So if you are going to make money you have to look at something that is irrational. Like the price of Kinross Gold, Botero or Agnico Eagle, say wait a minute, they are really good companies doing really good things, I want to invest because the price is cheap. What the average investor wants to do when you have $4 Silver they say Gawd, I don’t want to buy that, nobody wants it. But when you have Silver at $50 they say its gone up for 3 months in a row, I want to buy because its safe here!. What you have to do is break yourself from that habit. When you see Silver at $50 there are hundreds of guru’s saying buy, but why didn’t they say buy when Silver was $4″?
Its totally irrational, we have the lowest XAU over Gold Ratio we have ever had. Gold could go to $600 and the shares would still be cheap. As for the tension between Israel and Iran, Bob thinks we are literally talking about World War III. “Russia and China have literally said is that if there is an attack on Iran, they will defend Iran, and one of the alternatives is that they mean that. We probably have right now a 1000 valid reasons to own Gold and Silver. Its like driving home and finding your house on fire and someone drives up and says Hey, do you want to buy insurance on your home? Gold is an insurance policy, I own Gold that I have had for 10 or 12 years, I was a big buyer at $252, I don’t care what the price of Gold does, it doesn’t make any difference to me, but we’ve got Greece defaulting, you’ve got the credit default swaps, a credit event has been declared, the entire financial system in the World is about to explode, we have enormous tension in Syria and Iran that could literally go to World War III, there are all kinds of valid reasons to own Gold and Silver.”
You can visit Bob’s Resource investment sites at 321Gold.com and 321Energy.com
About Bob Moriarty:
Bob Moriarty was a Marine F-4B pilot at the age of twenty and a veteran of over 820 missions in Viet Nam. Becoming a Captain in the Marines at 22, he was one of the most highly decorated pilots in the war. He went on to ferry General Aviation aircraft all over the world for 15 years with over 240 over the water deliveries. He holds 14 International Aviation records including Lindbergh’s record for time between New York to Paris in two different categories. In 1996 he began an online computer business on the internet with his wife Barbara becoming one of the early adopters of the internet. Bob and Barbara started one of the first websites devoted to teaching readers what they need to know about investing in resource stocks. Bob and Barb now operate two resource sites, 321Gold.com and 321Energy.com where up to 100,000 people a day visit. Bob travels to dozens of mining projects a year and then writes about them. He was one of the first analysts to write about NovaGold, Northern Dynasty, Silver Standard, Running Fox and YGC Resources among many, many others. He claims with some justification that all of his readers are financially better off since they have been coming to his site.
