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Sunday, August 9, 2020

Gdx is a long term winner

Gdx is a long term winner

Forget about the noise, we are in a multiyear gold bull market.

Few people realize how big this gold bull run can be:
- No alternative assets as fixed income is yielding negative rates and central banks can not increase them or everything will fall apart. Just bitcoin could compete with gold but it is a much smaller market.
- All countries have huge amount of debts impossible to repay (US, Europe, China, Japan, Emerging).
- dollar collapsing
- a reform of the monetary and financial system in the coming years.
- new players buying gold (pension funds)
- current gold market cap is 2 trillion vs equity 100 trillion, which is 2%. If investors start including gold in their portfolios, just a 5% would double the price, a 10% would 5x. Gold can go to 4000$ easily. Miners would be more profitable than tech and Gdx achieving 140-150$ in this scenario is even conservative.



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