‘Uranium is more recession-proof than just about anything else besides gold’ — Lobo Tiggre

Kitco mining's special coverage of the rule Symposium natural resource investing is brought to you by G mining Ventures [Music] gold gave markets a meaningful signal when the metal hit an all-time high early this year according to our next guest La batigree editor of the independent Speculator but he is near-term bearish on gold hello and welcome to Kitco mining with me Paul Harris at the rural Symposium in Boca Raton Florida Lobo welcome back to Kitco happy to be with you Paul well thank you for joining us most speakers here at the event have been talking up the precious metals but you are bearish what gives well I'm glad to have a chance to say this clear my good name because I mean obviously I'm not anti-gold I'm not a gold bear not such on the other hand I want to be a rational Market participant I don't be religious I'm not here to save the world with a new gold standard I'm here to make money as an investor and we can go as deep down this Rabbit Hole as you want but the simple version is that the apparent victory of Team Soft Landing is not good for gold I mean Safe Haven demand is part of what it's at um but you've also got you know High interest rates and the FED is promising higher for longer without causing a recession apparently I don't think it'll stay this well but for right now while that lasts you know we've got Decades of numbers that tell us this is bearish for gold and you said you're short-term bearish in terms of you know how long is your short-term view on that when do you think that will perhaps turn into not being bearish well you know I'm famous for not wanting to make predictions right I don't have a future scene Crystal Ball but if I'm going to say something like this I feel you know I do need to quantify it a bit so I'm actually talking pretty short term like the next couple months I think that Team Soft Landing is wrong I'm not saying that they're actually right that's why I say the apparent victory of Team Soft Landing and so the sort of two Pathways here one would be they're just sort of garden variety wrong things aren't as rosy as it seems and they start falling apart over the months and quarters ahead in which case it could be that the British Bears on Wall Street are right and the recession has been pushed off to 2024 maybe even late 2024. that I see that as a worst case scenario I actually think that the FED will be forced to Pivot much sooner this year I think we'll see not the recession happen I think we're actually in a recession and it's been masked by post covid lockdown market distortions like the labor hoarding these kinds of practices make the labor market particularly but the general economy look to be in better shape than it really is even while we have mass layoffs and closures and you look at the Outlook from the Wall Street earnings season and so on never mind the leading economic indicators the yield curve uh Federal Income you know revenue from taxes you know all of these things that have Decades of correlation with recessions are flashing in red lights recession recession and Team Soft landing and denoring that and right now looks like they're right you know people on wall streeters are just all about team self-planning that's right so I think that going from zero to 500 basis points in a year is a smashing thing to do to an economy in a bad way not a British smashing thing an American smashing thing that's bad the Regional Bank excitement that we had a couple months ago I think that's just an overture I think the other shoe drops this year before the end of this year I think the FED pivots I think all kinds of good things happen for gold bugs but until then until then I think a rational Speculator should expect headwinds and goals okay thank you what do you think will cause the denouement of Team Soft landing and and expose right you know we've got candidates commercial real estate is one that's often cited the uh impending you know Doom of students with their student loan payments and those moratoriums coming off and their retrenchment and spending that could be another but I'm you know I'm thinking about what happened with those Regional Banks and it's not that no one saw it coming exactly but kind of no one really did it's after the factory guys oh yeah that was obvious and the guilt thing that happened last year in the UK it should have been obvious and maybe somebody out there was warning but generally speaking the markets didn't appreciate that risk after the fact oh yeah that was obvious I suspect that you know it might not even it might not be commercial real estate or the student loans or something that you and I will point at now but afterwards you know if we have this conversation in five months we'll be thinking that was obvious do you think there's an element that you know confirmation bias blinds us or blinds the markets you know we've got this perhaps Dr panglos aspect where everybody wants things to go well so you kind of put the blinkers on and don't recognize some of the things coming up that are going to bite you in the ass yeah yeah can we say that on TV I'm glad you did not me um but I think that's exactly where we're at right now there is not just recency bias but there's also confirmation bias and you know I've noticed this have you noticed this not on Kitco news of course but those other irresponsible folks on mainstream Financial media uh the bloombergs of the world and so on they want markets to go up if you're a Savvy Market participant you can make money going short like it doesn't have to be that stocks go up if you correctly anticipate the trends you can make money whether they go up or down you just need to be right and so if you're a financial reporter it seems to me that you should cover you know both ways of things and it doesn't matter whether the markets go up or go down it matters whether your trend is investable but that's not the way they report it if things are going down that's bad right you know what I say yeah so I think there's absolutely a confirmation bias and I think that people are hearing it from the mainstream media types you know it's it's risk on it's go go everything's fine and frankly I think that's leading the lamps to the slaughter now I might be wrong I mean and by the way this isn't a someday you know I might be proven you know I'm saying that this year the other shoe will drop and either Team Soft Landing will be more right than I'm giving them credit for or Lobo ticket it will be flat out wrong that happens this year if I'm right all of these cheerleaders on Wall Street and their lap dogs in the mainstream media they are performing an active disservice to the investing public right now it does seem there is an overwhelming fundamental support for some of the big tech companies the big names because I don't know they've risen to the level of Titans and so forth they've got to be respected perhaps protected and rah-rah all along the line you called it fundamental support I'm not sure I would agree with that characterization they have an enormous amount of support yes the narrative is fantastic hard to be better I mean but come on Nvidia 250 times PE that's not fundamentally good in any way fashion or form how can that be anything other than ridiculous pardon me right understood okay let's talk more about gold specifically now um you've noted that gold hit an all-time high early this year still it's been a tough year for gold investors the GDX is barely up year to date while the s p and the NASDAQ other key investment vehicles uh have been up much more what's Weighing on the gold sector all right well we need to differentiate a little bit here it's not gold it's gold stocks you know the things you quoted that are way down are are the start and the metal itself is actually having a good year the other yellow Metals having an even better year uh but Gold's not actually having a bad year and some people see this as a reason to be even more bearish they're giving up they're disgusted you know Gold's doing fine but the stocks are not so I'm sick of this and I'm out you know I'm not sure what to say I don't want to sound like Linus in the pumpkin patch you know the great pumpkins coming any day now just believe on the other hand I mean Decades of History tells us that if gold breaks out the gold spots will not be left behind and Oak you know gold even if it was treading sideways we're slightly up this year but even if it's treading sideways in an environment of rising and high interest rates real rates of well the dollar has been lower lately but until more recently the dollar was starting to rebound and basically there are sort of traditional headwinds if you win that explain why gold itself should have been down more than it is and so I would separate the metal from from the stocks and I'm not just quibbling here I think this is very important I I personally view gold Boolean as how I say I don't trust the banks I wasn't caught out by any Regional banking crisis because I I put my savings in boys I'm a stacker and and at that point I'm not worried about the price I have something that's real it has value and whatever happens in the paper world I'm I'm fine so gold aside the gold stocks there are some very erudite explanations for this you know Rising costs that's a real thing we talk about inflation being high well let me jump in there a little bit because um you're right the gold price has been actually pretty good and most producers have healthy margins and have been making you know good money um yet their share prices aren't really reflecting that and people often invest in gold stocks because they have leverage to the gold price but it's not there yes well it's not there right now I can't deny that that's the fact and I I see it in uh feedback mostly on Twitter my own subscribers I think are a little more common group but on Twitter I get to pushback all the time I say anything positive about goals like oh these goals are stuck they're not doing what they're supposed to you know they're supposed to offer this leverage that's our whole reason like why would you take risk on a producer let alone an Explorer if not for the lever it's the underlying so if you're not getting that payout then why bother and so my take on this is that the rational answer is that Rising costs and so on are reason to be skeptical about the stocks political risk other things I mean Africa's resource nationalism is really resurging strongly in Latin America it seems like you know even the most pro-mining jurisdictions are taking a turn to the left if not an overtly anti-mining stance so I get it but I actually don't think that's what's happening this is my take for what it's worth so what do you think there is that disconnect yeah and that's where I'm going oh sorry I I I think that recency bias or what people remember is the last Gold Spike and that was 2011 and gold hits then and not you know nominal actually a real all-time high I think that no actually it wasn't real but not not in 1980 dollars nominal all-time high waffles sideways for a bit falls off a cliff for years and years and years that's what everybody remembers right now what's their comparable their nearest comparable it's not 1980. it's 2011. so I think I think I can't prove this but I think Mr Market is like the Cat on a Hot Tin Roof just just can't get off fast enough and this isn't you or me or the average gold bug that goes down to the local coin shop to buy another you know Eagle this is the comics Traders lme Traders the people who watch Forex you know the Jeep the the dxy and the fed's latest decision these people whose trades on the Futures Market we mistakenly refer to as the price of gold those people they're just waiting for gold to crash again but their question is how long can it stay up here around 2000 before we get another big slide like from 2012 down to 2015. I think that's what the the mainstream you know to the degree that there's a part of the mainstream that cares about gold at all that's their reference their their guidepost and and if that's you know if that's your guide post and you're a forward-looking participant in the markets why on Earth would you own the stocks ahead of that so I think that what happened this year with gold hitting a new nominal all-time high really shakes that up and that's part of why gold is hung in on and the longer this goes without gold repeating that past pattern I think the more uh kindling this puts under the fire and if we get a real breakout here gold goes up to 2100 so I think all these unloved stocks will suddenly feel the love people will realize you know oh my gosh it's not going to be 2011 all over again this gold bull market has legs it's here to stay and I'm not normally a cheerleader pounding the table and I've just said I'm bearish near-term on goal but I do think Goldberg payday is coming and I think with a Vengeance may be wrong but I expect serious momentum to come into this in the next breakout it sucks too not just the metal uh the thing is another interesting uh factorial Dynamic on this is that for much of the past decade the gold Comfort has been working hard to make themselves more investable yes restricts from the parachutes paying down debt uh being very risk-averse in terms of M A and developing assets which is perhaps creating fertile conditions for an outbreak um what's your view on how the gold sector has evolved in recent years we've seen a few Mega mergers are there more to come yes is there more consolidation will the participants continue to strength yes well so you know I before the covid lockdowns and everything threw everything out the window I wrote an article called takeover tsunami is coming so you know big egg on my face just goes to show to your audience I'm not always right of course I didn't see covet coming but to be fair and you know Auto critical Frank with myself I have to say it's been really a couple years since the lockdowns went away and we're still not seeing this big wave of takeovers of you know the smaller companies that most of our audience invested um so what's wrong and my thesis now is that frankly I've been surprised I did not expect as much M A activity on the top of the pyramid as we've seen and you know they're kind of running out of big pool companies to buy but still with this new press thing it's still happening and when this happens you know a Barrack buys Rand gold or you know agnico in Kirkland when they do something like that it takes them a couple years to digest a big acquisition at that point they're not looking to buy anything they're divesting non-core assets so if if this Newmont deal goes through now that takes Newman out of the Acquisitions market for the next couple years but you know they're gonna be looking to sell what do we not need that we just got with this you know let's focus on the core assets so that's the bad news um the good news is that you know this literally is something that cannot go on I can't give you a deadline on this I can't say you know here's the date but I can say that we all know for a fact that a mining company with every ton that it mines every ounce or pound it takes out of the ground that's much less resource that they have and if they're not exploring or building they've got to buy or they will you know they will mine themselves out of existence so I think and I I think we probably look more to the mid-tiers for a while and we're starting to see you know lights on consolidations by that I mean like Juniors you know buying each other because one has a project and one has cash that doesn't really help a whole lot um but I think we probably look to the mid tiers that haven't made a discovery or haven't built a new mine and they're going to be looking for what can we buy that's an asset of value um long story short I think takeover is overdue they cannot be put off forever I think you know we may not see that you know the great tsunami this year but I think we will see more M A and I think we will see it starting to trickle down to the junior space before the end of this year thank you do you think there's an element that uh juniors are too cheap for emanate to happen you know a lot of the juniors are trading at you know 70 to 90 less than they were two years ago company management company boards uh even if they got a let's say a 50 premium they think they're that's still far too cheap for them spoken to a couple of the exhibitors here they said you know these prices we do want M A but not at these prices well yeah they don't want to get you know we call that a take under right you get a low ball offer when the Market's down and this is really important actually for the audience we have a free download if you don't mind me mentioning on our website on takeovers and what to look for and this is really important because like if you get a cash offer when the stock is down that basically is locking in a loss for anybody who bought you know anywhere above that offering price and if if you're off 90 you get a 30 premium that you know you're still under water so you want an offer for shares at that point if not you want to vote against that so we won't get lost in the weeds there I do recommend that download but in terms of what to look for who's a good acquisition Target I have a list in that report but the quick short version would be it's not actually price it's the buyers are not priced completely insensitive you know if you can't buy more than it's worth if you're really looking to reduce risk so you're looking for something that's either fully permitted or obviously you know relatively permeable it's not got red flags all over it on the permitting price uh front um you know the economics you want something that clearly works you want something as permeable you know that your your jurisdiction maybe even financing you know with with the sector in the doldrums if you're the buyer you can sit back and let the junior blow its brains out diluting its shareholders you know raising money to build and do all this stuff and then swoop in go ahead it's been a terrible market for for gold Juniors to raise money for the you know pretty much most this year and maybe a little bit longer back into the past so a lot of companies must be coming up to that real crunch time where they need to finance so they're going to be impossible or ridiculously expensive do you think that will uh facilitate a few transactions you know maybe capitulation transactions and in terms of takeovers no because I really think that's entirely like if the if it's a good project and it's and we can permit this we can build this this is a this is something we want to do then the price is secondary and and if it's not a good project being able to get that on sale doesn't do you any good so for takeovers no um for investment opportunities I think that actually is this is um you know to the discipline Speculator who's willing to buy low when you know the when capitulation is in the market space this is a very good thing it's like a litmus test you know who has the money and occasionally you know somebody just screwed up they should have raised the money they didn't now the Market's down and they can't but by and large the on the junior end the companies that are that have a nice Treasury that tells you a lot about the quality of their assets and the quality of the management that they had the foresight to raise money when they could and that investors were willing them to give them that money so you have you know what is it 3 000 of these Juniors out there how do you know which ones to buy I think this this actually is a tool that the that the investor out there can use look at their financial statements look at their fundraising history what does that tell you about this company and in this environment that really can help you sort the wheat in the chat okay it's really sound advice there let's talk about copper and critical medals for a bit um the past year or so the narrative in the in the mining space really has swung towards copper and critical medals and away from perhaps gold and silver because of the fundamental need for these materials for the energy transition and other things like that but these are better opportunity now than gold stocks uh at this moment right now I would say no uh on the and silver might be the the who knows what because silver has an increasingly industrial side as I'm sure you know many of your guests have said and that's a very real thing and for most of this here if you look at the charts the week the daily charts weekly charts you'll see silver Will Will Shadow copper on the charts more closely than gold um and so if Team Soft Landing appears to be right we might actually get a bit of a Tailwind for Industrial Metals uh which could help copper and soap even if it doesn't have gold and that's not a prediction I honestly don't know which way this will go there are times where where silver remembers it's a monetary metal and it goes back to track and gold and I I don't know how that will go this year um but despite Team Soft landing's apparent Victory right now over team TV uh I do think we're gonna see an undeniable signs of recession before the end of this year and so buying copper or any industrial metal right now ahead of that if I'm right you know if you have a long-term Outlook you know maybe you come through the other side just fine and and eventually they go much higher I actually believe that could happen but I know that if I told people go buy copper stocks now and again and your copper stock goes down 50 before the end of this year you'll be you know with pitchforks and torches outside my gate saying level why'd you say that right so I have to say that you know my viewers we're likely to see much better buying opportunities in the copper space and I say that as a long-term copper bowl I I really love copper going forward after the recession okay energy transition has been a big theme over the past couple years so let's talk a little bit about uranium uranium obviously is the fuel uh is made into the fuel for nuclear reactors the world's opinions are views about nuclear power are changing and becoming more positive given the efforts to decarbonize um but it seems to have dropped a little bit from The Narrative over the past six to 12 months although nothing really has changed in the underlying story and the uranium prices up this year what's going on well uranium prices are but honestly I mean if and below the recent Peak so it rushed up during the war outbreak to 64 bucks or so and then it corrected you know which the scare went away no surprise and then since then it's been kind of waffling sideways to slightly up not not a breakup that would get excitement so this is one of those things where if you you've been in uranium for a long time you've seen this before you know what I'm talking about if you're a more recent investor in the uranium space and you look at in the metals doing okay but the stocks are doing terrible you know what's wrong this is broken again you get capitulation I think for the wrong reasons if you're underwater and you're disgruntled you may you know may not have patience for what I'm saying here but it's just not the way markets work I mean not only decades but just think about it it makes no sense for the price of the metal to go up and the stocks to just be left behind now we know on a day-to-day basis if the market has a bad day right for something completely irrelevant right you know that the AI there's a scare or something and the tech sector sells off that will whack uranium stocks as well and people will be like pulling their hair out what's wrong this has nothing to do with uranium but stocks are stocks and your random stocks are stocks the Market's down and it whacks the stocks but that can only go on so long and it tends to happen on a daily basis if you look at the uranium stocks over even just this year they don't entirely track the mark and if you look at them over say the last five years if you take a step back from your recency bias you know the uranium is up over the last five years the uranium stocks are up over the last five years uh if you were in early enough you're actually a very happy camper here it's only the people who have bought on the recent interest and are underwater that are saying what's wrong this is broken and my message to you is nothing wrong it's not broken be patient you know may be wrong but I'm putting my own money where my mouth is right now you know I have more uranium stocks in my portfolio than I've ever had the only stock on my shopping list right now is a uranium stock and I think we talked about the recession in Industrial Metals I think uranium is more recession-proof than just about anything else besides gold because it's base load power like you may decide not to take a trip to grandma's this week if you're you know tightening the budget at home and spend less money on gasoline but you want the lights to turn on when you flip the switch you want your hospitals to have it in your G no matter what and that's what uranium nuclear power is good for so I'm I'm very bullish and we've just done some new research here that we will be publishing to for free on our website paying clients first um but we we have some a new finding there regarding high prices curing high prices and I have actually been near-term bullish on uranium for a while but long term kind of bearish because there's a lot of uranium out there that could come to Market but our latest research says not so fast that it that it may take a lot more to balance the market than I have given it credit for so I'll share that soon but I'm just saying I'm I'm actually more optimistic than I've been for a while okay thank you now we've talked about gold we've talked about copper critical minerals and a bit of uranium what kind of investment opportunities and stocks are you recommending to your readers at the moment so right now as I said uh well I I don't do recommendations as such I try to lead by example so my portfolio in the independent Speculator is it's not that I just may disclose from time to time oh I might own some of these whatever it's this is what I'm doing with my own money and so my whole stick is I lead by example and so right now when I mentioned the only stock on my shopping list is the uranium stock that's what I'm doing that's how I see the markets at this very moment and that's if you want to call it a recommendation you can but I think of it as as leading by example um that's in the nearest term over the course of the year I do think that Team Soft Landing will be proven wrong at that point I'm looking to go back into gold as well or I haven't sold but I'm not buying now but I'm looking to start buying then and we'll see how silver does and as soon as as soon as the recession really hits you know I think then we'll have an opportunity to buy great copper stocks maybe lithium too maybe silver two depending on which horse it rides um you know I'm I'm I'm I'm I'm eagerly looking forward to deploying into more sectors but right now I'm laser focused on uranium because I think it's the most resistant to the headwinds I see in the immediate future okay um to bring our conversation to a conclusion what others or catalysts or signals that you're really looking out for over the next say six to 12 months well that far ahead well the biggest one will be the recession I I sincerely believe that the U.S economy is is in and heading deeper into recession and the global economy no question um and so I don't see that as a new thing that will happen the thing to look for is for this to become undeniable I call it the recession deniers when they capitulate and that I think that creates the maximum point of fear and the maximum point of you know investment leverage to the buyer who has the guts to buy low at that time excellent well Robert Tigre thank you very much for sharing your thoughts and research with us today thank you stay tuned to Kitco mining for more from the real Symposium and Boca Raton Florida Kitco mining special coverage of the rural Symposium natural resource investing is brought to you by G mining Ventures [Music]

Channel: Kitco Mining

Views: 9,305

Keywords: Gold, Uranium

Id: UFn4BcztnH8

Length: 27min 56sec (1676 seconds)

Published: Thu Aug 10 2023