Brief Summary
Lobo Tigra from Independent Speculator discusses the current state of the gold and silver markets, considering whether the recent surge is a blow-off top or part of a longer-term bull market. He emphasizes the importance of having a profit-taking strategy and adapting it based on market conditions. Lobo also shares his approach to rotating profits into undervalued sectors like oil and his strategy for copper investments, highlighting the significance of due diligence and independent evaluation in investment decisions.
- Gold and silver markets are at exciting times, but it's uncertain if it's a blow-off top or a longer-term bull market.
- Profit-taking strategy should be adapted based on market conditions and personal risk tolerance.
- Rotation of profits into undervalued sectors like oil is a key strategy.
- Due diligence and independent evaluation are crucial in investment decisions.
Intro
Charlotte Mloud from investingnews.com interviews Lobo Tigra, CEO of independentspeculator.com, about the precious metals market and investment strategies. They address audience questions about the sustainability of the gold and silver bull market and discuss potential scenarios for the future.
Gold price breakout
Lobo discusses two potential scenarios for the gold and silver markets: a blow-off top phase with rapid gains or a continuation of the bull market driven by factors like central bank buying and electrification trends. If it's a blow-off top, gold and silver could double quickly, but the peak will be short-lived, followed by correction. If the bull market continues, current levels are still reasonable for investment. Lobo suggests that if investors believe in the blow-off top scenario, they should invest in well-known, top-tier royalty and gold producers, as these will be the first to attract generalist investors. If a consolidation phase is expected, it's best to wait for buying opportunities during periods of volatility rather than chasing stocks at all-time highs.
Is this a blow-off top?
Lobo says that determining whether the market is in a blow-off top phase requires monitoring price action. While his fundamental view supports a longer-term bull market, recent vertical gains suggest a 50/50 chance of a blow-off top. If the market continues to surge, he would adjust his strategy to take more profits and potentially exit positions entirely, anticipating a subsequent bear market. Lobo emphasizes that his approach is based on data and market signals, not personal hopes or desires.
Is Lobo taking profits?
Lobo discusses his profit-taking strategy, noting that it depends on the type of company and market conditions. For junior companies with exciting but unproven prospects, he would take more profits to mitigate risk. For companies in politically unstable jurisdictions, he might sell everything to eliminate risk. In contrast, for growing, profitable producers, he might only recover his initial investment and leave the rest on the table. Lobo emphasizes the importance of having a well-thought-out exit strategy and tailoring it to individual risk tolerance. He has already taken substantial profits, paid off his mortgage, and still has more money in the market than he started with.
Rotating to oil sector
Lobo explains that he is rotating profits into the oil patch because it presents opportunities to buy low, unlike uranium and copper, which are trading at high levels. He emphasizes the importance of buying low and selling high, which naturally leads to rotating into undervalued sectors. Even if gold and silver continue to rise, he will still profit, and if they decline, he has already secured profits and diversified into new areas. Lobo's strategy focuses on identifying opportunities to buy low, regardless of where the top of the market is.
Where to focus in oil
Lobo clarifies that while he sees opportunities to buy low in the oil patch, he has not yet made any new purchases. He is waiting for the next volatile spike downwards to set his entry price. Lobo prefers consistently profitable, well-known dividend-paying oil stocks because they offer low risk and decent reward. He finds this approach more appealing than high-risk, high-reward plays with uncertain outcomes.
Lobo's copper strategy
Lobo discusses his copper investment strategy, mentioning that he bought one copper stock last year due to company-specific overselling. However, he missed out on other opportunities because he refuses to chase stocks. Despite a scare in the copper space last summer, the stocks did not sell off as much as he had hoped. Lobo remains open to buying copper companies at better prices in the future, anticipating more volatility in the markets. He emphasizes that he will not chase stocks when there are other buy-low opportunities available.
