Gold: a saving asset, not a trade
Precious metals bull markets are led by gold, driven by the fear buyer. I save the gap between what I earn and what I spend, and I keep those savings in gold. Because it is something I want to keep buying, I would rather see the price stay low. It feels good when the buying power of my gold rises, but it would take a much higher price to make me sell. I am content to buy at current levels, so my own interest is served by lower gold prices, not higher ones.
That sits inside a firm long-term view. Debt and deficits will cut the buying power of the US dollar sharply over the next 10 years, so I am very confident in gold measured in dollars over that span. The near-term price does not concern me at all. Over the next 10 weeks, though, higher US interest rates could keep gold soft or even push it down for the rest of 2026.
Silver follows, then overtakes
Silver tends to track gold at first. When a rising gold price makes the metals story interesting to the general investor, that investor moves in, and silver's lower price per unit pulls their money into silver rather than gold. Silver then starts to outpace gold. This rotation usually happens fairly late in both long and short precious metals cycles.
Silver stocks: quality versus leverage
Over a 5-to-6-year window, there is 100% certainty that a carefully chosen set of higher-quality silver stocks will do extremely well. Even more money can be made in low-quality silver stocks if you can handle the risk and the swings. The weak companies often do better than the strong ones in a bull market because they get bigger margin expansion. Most people cannot stomach that volatility. These low-quality names usually trade at a premium relative to the quality of their earnings compared with companies that look more expensive, but they offer more leverage to the silver price. Eric Sprott, perhaps the most successful of that type of speculator, treats leverage to silver as the key thing to look for. I am drawn to quality instead; the junk names are inelegant to me, and I don't do it.
Platinum: ignored, and supply is the risk
Three reasons draw me to platinum. First, nobody is talking about it, and I like assets out of the mainstream. Second, platinum and palladium are critical parts of auto catalysts. Big thinkers say we will use fewer auto catalysts because the internal combustion engine is dying off; I think that is wrong. We will keep needing auto catalysts for cars and for burning fossil fuels to make energy. Third, supply is fragile. Most platinum-group metals come from just three countries: South Africa, Zimbabwe, and Russia, and the chance of supply cuts or social chaos in any of them is fairly high. I am not predicting a breakdown, but if one happened, demand would hold while supply fell hard, opening the possibility, not the probability, of very fast price jumps.
Gold versus real estate
Real estate has been good to me, but investing in it is a business: you have to add value. I don't have to add value to gold. I put it in a safe deposit box and let it do what it does. When I was younger I bought duplexes and triplexes, and that was active work. For 40 years until 2022-2023, real interest rates were falling, which pushed real estate along. Now that rates are rising, it is less certain. At 73 I would rather do less than more. Real estate has also become so popular that storing wealth in gold is easier for me than storing it in buildings. For people who can buy an underperforming building and fix it themselves, no asset class on earth is better; I am just not one of those people. Warren Buffett said that as he aged he grew more attracted to investments that required sloth and lethargy of him, and I agree.
Measured in gold, expensive US real estate is about as cheap as it was in the 1970s. High nominal prices can hide falling buying power, which is part of why there is little alternative to saving in gold.
Emotions and valuation
People get emotional and angry when they hear an opinion that clashes with theirs. Many are simply unhappy and broadcast it in whatever sector they inhabit. I am a happy person, and except for government and taxes, I try to stay cheerful.
Money is made in the gap between price and value. In bull markets value gets more expensive, which is bad; in bear markets value gets cheap, which is good. People buy consumer goods carefully. Someone will spend 15 hours buying a car, 4 hours buying a coat, or 10 minutes checking calorie counts and expiration dates at the grocery store. With stocks they go on a hunch. If a stock rises from $2 to $4 with nothing changing, they get excited by the momentum. If a can of tuna went from $2 to $4 in two weeks, they would be outraged. If people bought stocks the way they buy tuna fish, more of them would make more money. A stock doubling with no change in fundamentals should trigger scrutiny, not excitement. To stay rational, work hard enough to fix a fair value in your mind, then write down why you bought.
Liquidity as an option premium
Holding cash has a cost. A US 10-year Treasury pays 4.6% or 4.7% now, which looks attractive against history. But the buying power of the dollar is falling at 8% compounded, so you are not making 4.7%, you are losing 3.3%. I treat that 3.3% negative yield as an option premium. In a liquidity-driven crisis like 2008, holding cash gives you the tools and the courage to act. 2009 was the best single investing year of my career. I am not forecasting a crash; I am saying a liquidity-driven crash is possible, and those holding liquidity then would earn returns like 2009's.
Cash and gold help me sleep and stay calm. I split my savings between bullion, the US dollar, and a couple of other currencies. I hold liquidity in currencies I am likely to use as an investor, traveler, and citizen, and I save the bulk of my extra income in gold.
Where hate still creates value
Nothing is cheap right now; there is no hate left in commodities. The hate that remains is geographic. For people who can afford to speculate and are willing to be a geographic contrarian, real money is there. Sudan has made me money. Congo has made me money. You can make a lot speculating, if you stay rational, after the flak jackets come off but before the currency becomes convertible. If you are very aggressive, as I was in the Congo in 1996, you invest while the flak jacket is still on, which the Rothschilds described as buying when there is blood in the streets. True hate-based contrarian investing survives geographically rather than by commodity. This is not conservative; it means accepting real instability before conditions normalize. Fear creates value only when the risk is understood.
Patience and concentration
Over 30 years I have evaluated almost 100,000 portfolios for free, and I have learned as much as I have taught. Most speculators lack patience. The great miracle in finance is compounding, and a short-term trader throws away his biggest advantage, which is time. Most speculators are not contrarian and not tenacious, mainly because they don't work hard enough. If you accept that money is made in the gap between price and value, you must work hard enough to set a fair value in your mind. Do that, and when the price falls you lean toward buying rather than selling. Most investors can't. Seeing a stock at a dollar, they have no idea what it is worth, so a rising price feeds a story with no basis in fact and they like it, while a falling price shakes the story and they sell. They characteristically overpay.
The number of stocks in your portfolio should match the hours per month you will spend studying them: roughly 10 hours a month for 10 stocks. Studying means reading annual reports, quarterly reports, proxies, resource statements, and insider filings, not just watching videos. Many people hold 40, 50, or 60 stocks and spend 2 hours a month on them, and that does not work. Doug Casey calls that technique "got a hunch, bought a bunch." Owning 60 stocks you barely study is not diversification; it is outsourced conviction, and neglected holdings can hide risk long before it shows up in the headlines.
