Investors of all ages, and especially millennials, should seek markets that will give them an unfair advantage. Doug Casey, founder of Casey Research, and Rick Rule, president of Sprott U.S., said that great opportunities lie in the gold mining sector, as well as emerging and frontier markets, like Africa.
“Gold stocks are very cheap now in both relative and absolute terms,” Casey said. “All these trillions of dollars that the government is creating has created bubbles.”
The emergence of millennial investors and traders on Robinhood and recent foray into the gold and mining sectors is likely to push mining stocks higher, perhaps even into a bubble, Casey noted.
“The mining business itself is a crappy industry for all kinds of reasons, but the good news is that it’s the most volatile class of stocks on the planet and [traders] will discover that since 1971 when gold was freed up there have been five major bull markets, especially in the junior stocks, when the market as a whole has gone ten to one. So, when the Robinhood guys discover that, they’re all going to pile onto these things.”
Rule echoes Casey’s sentiment about investing in mining stocks.
“A precious metals bull market, is something, as Doug suggests, that’s special to behold,” Rule said. “I think that we’re in the early innings of a bull market in precious metals and precious metals equities that will continue to reward investors extremely well.”
Gold equities typically perform better than the bullion during bull markets, Rule added.
Precious metals are not the only asset class expected to perform well, Rule said.
The surprise, I think for everybody, three, four, five years out, will be that after a period of real underperformance because of economic weakness, that we will have a supply-led bull market in industrial materials reminiscent of the one we enjoyed in the 2000 to 2006 period,” he said.
Rule commented on the investment potentials of overlooked frontier market, like Africa.
“Other potential bull markets that people aren’t looking at…my suspicion is that the stage is being set for frontier and emerging markets, in particular African markets for a real bull market. It’s true that African governments are particularly pernicious, but they’re also particularly inefficient,” he said. “There is a large, unmeasured economy in Africa. There is a young population that is getting a real education that is getting a real education and getting exposed to real ideas faster than other places in the world.”
Casey said that frontier markets can provide an advantage to investors today.
“Following up on what Rick said about Africa, I’ve got a lot of views on that too. I’m not quite as optimistic as Rick is but I’ll say this, if I were a 30 year old, if I were a millennial and I wanted to make money, I would go to Africa. I’d want to go someplace that where it’s an unlevel playing field. I don’t want to be on a level playing field with 100 million people just like me. Go to Africa where the odds are on your side, where you’re the only kid on the block who’s got an education, and money, and connections,” he said.
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