Convince Me in 15 Minutes that gold is the safest investment
With Joe Boskovich, Sr.
Joe Boskovich, Sr., Chairman and Chief Investment Officer of Old West Investment Management, discusses the attributes of gold as the safest investment. He emphasizes the historical significance of gold and its role as a hedge against inflation, diversifier, and performer during crises. Boskovich criticizes the Federal Reserve’s manipulation of interest rates, attributing it to causing economic bubbles and speculations.
Joe, with over 40 years of investment experience, founded Old West. As Vice Chairman at Aletheia Research and Management, he played a key role in co-portfolio management and marketing, contributing to growing assets from $80 million to over $10 billion. Previously, as CEO of Boskovich Farms, he established major business relationships with industry giants like Wal-Mart, Costco, Sysco, Safeway, Albertson’s, Kroger, and Disney. Joe also served on the Board of Santa Clarita National Bank for over a decade, playing a pivotal role in its sale to Security Pacific National Bank, now part of Bank of America.
Timestamps:
02:15 Federal Reserve’s manipulation of interest rates caused damage, contributing to the housing bubble in 2005 and the speculative market conditions leading up to the pandemic.
04:05 Gold and cryptocurrency share the same rationale as a cash alternative, expressing distrust in government manipulation of currency, massive money printing, and currency devaluation.
05:38 Central banks, including China, India, and Singapore, have been accumulating gold due to its role as an inflation hedge, diversifier, and its performance during crises.
06:50 Gold recently breached its previous high but still has potential to surpass its real all-time high, presenting an opportunity.
08:50 The gap between the price of gold and gold mining companies is at an all-time high due to changes in the behavior of gold mining companies, focusing on judicious capital allocation and improved profit margins.
11:31 Gold miners’ low valuations relative to the S&P 500 can be attributed to the dominance of technology stocks in the index and the current favorability towards technology investments.
13:34 Gold mining companies, often based in Canada, operate globally, benefiting from favorable laws. The risk associated with international operations is seen as part of the business, and companies diversify their projects worldwide.
17:17 Improved capital allocation and conservative approaches by gold mining companies, akin to changes seen in oil and gas producers, contribute to the industry’s current positive outlook.
21:46 Gold mining stocks’ current unpopularity is attributed to the prevailing focus on technology investments, creating a temporary phenomenon that is expected to change as investor sentiment shifts.
24:48 Joe Boskovich predicts that ongoing massive global debt issuance will lead to lower interest rates, benefiting gold as governments may resort to buying their own debt, ultimately devaluing fiat currencies.
