Asset protection

Investors Go “All-In” Without A Net

We have recently written a couple of posts about the “exuberance” that has invaded the market since the election. Such is often seen near short- to intermediate-term peaks in markets as investors go “all-in” without a net.

It was on December 5th, 1996, during a televised speech, that Fed Chairman Alan Greenspan stated:

“Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

It is an interesting point that the U.S. has sustained low rates of inflation combined with monetary and fiscal stimulus, which have lowered risk premiums, leading to an inflation of asset prices.

Big Fat Idea – How Investors Can Qualify for the Lowest Interest Rates

Kyle Green, President of the Green Mortgage Team joins Mike to explain that while interest rates are incredibly low, the ability to qualify for them is not – especially if you are buying for investment purposes. Find out how he is managing his client applications for maximum acceptance.

Warren Buffett Sold His Last 3 Canadian Stocks

In 2020, Warren Buffett has been lying low. Preferring to play his cards close to his chest, he hasn’t revealed much about what he’s been buying and selling. However, once every quarter, he is forced to reveal what he was up to in the quarter before. As it turns out, the “Oracle of Omaha” massively reduced his exposure to Canadian stocks this year.

In the second quarter, Warren Buffett sold out of Restaurant Brands International completely. That move was well publicized, leaving two Canadian stocks in his portfolio. He has trimmed both of those positions throughout the year as well. If this continues, Buffett may be out of Canadian stocks completely by the end of the year. That’s not a great sign for the Canadian economy but — as you’re about to see — there’s a silver lining. CLICK for complete article

Quote of the Week, Shocking Stat & Goofy Award

Quote of the Week 
Question: are things so bad that the head of the central bank feels the need to address bankruptcy concerns? 

Shocking Stat 
Look what a minor change in interest rates does to the cost of servicing the federal debt. 

As protests against Covid related restrictions grow, we should be asking how do we bring more people on board to support the measures to fight COVID-19. 

Beware “The Great Reset”

The “Great Reset” agenda is finally in the news. It’s absurd to call it a conspiracy theory. It’s a global agenda that the federal government is on board with. The question is are you?

Q3 Mining Trends, Themes and Companies to Watch

Growth and Balance Sheet Improvement:
With commodity prices across the metals complex improving q/q and many operations returning to full capacity after Covid related downtime in 2Q20, the majority of precious and base metals producers in our coverage universe posted strong FCF growth q/q driving balance sheet improvement. Among the gold producers we highlight AEM, AUY, BTO, CXB, IAG and KGC as having significant q/q increases in FCF with FM and LUN as standouts among the base metals producers. The strong FCFs drove a reduction in net debt for the majority of our coverage companies

Gold Producers Increase Giving – Dividends Keep Increasing:
With the strong FCFs and improving balance sheets, all of our dividend paying gold producers increased dividend rates in 3Q with KGC re-instating its dividend after a multi-year hiatus. Over the past year, BTG has quadrupled its dividend while both AUY and AEM have grown dividends by ~160% and 100% respectively. The base metals producers maintained dividend rates in the quarter

4Q20 Expected to be Strongest Production Quarter of the Year:
The majority of our gold producers are expecting 4Q20 to be the strongest production quarter of the year incorporating operational re-starts, ramp-ups and mine sequencing. With the exception of OGC, gold producers in our coverage universe have delivered 71-75% of annual production guidance YTD which we expect will allow the majority to achieve production guidance for the year when incorporating the expectation of a strong 4Q. Our modeling suggests AEM could exceed annual production guidance while we expect OGC’s production to come in slightly below the guided level. Among the base metals producers, we expect FM and ERO to have strong 4Q production positioning both to achieve the top end or potentially exceed annual production guidance… CLICK HERE for the full report