In Part II of our in-depth interview with renowned investor Lawrence Lepard, Trey Reik continues the conversation to explore why Larry believes gold stocks are poised for explosive upside, and why a looming sovereign debt crisis will force central banks back into money printing—an event he calls “The Big Print.”
In this episode:
- The mining companies Larry believes could deliver asymmetric returns
- How he structures his portfolio across producers, developers, and drillers
- The valuation disconnect between gold prices and mining equities, and the key metrics he uses for valuing them
- Why silver miners may offer even more leverage and upside than gold miners
- Larry’s take on geopolitical risk, and why he sees overlooked opportunity in regions like Africa
- Whether rising tariffs could trigger the next global market event
Later, Brett Rentmeester of Windrock Wealth joins the conversation to reflect on Larry’s interview, offering a portfolio manager’s view on the role of physical gold, silver, and Bitcoin in protecting capital in today’s fragile macro environment. Brett also discusses why gold miners have lagged the metal itself, and whether that disconnect is about to change.
If you missed Part 1, be sure to watch it here.
Investment Concerns? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/3FXeluF
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
Larry Lepard 0:00
We’re going to see a return to zurp and a return to QE. We got to print money. And that’s just like, that’s like nectar to, you know, to gold bulls. I mean, it’s just gold’s going to go to 5000 and when that happens, these stocks are going to explode.
Trey Reik 0:22
I so and then the last sort of general question before we get into your portfolio, I always think it’s important to share a disclaimer with folks viewers who are building their own portfolios that picking one or two gold stocks is a very bad idea. Oh, terrible idea. So what do you think five to 10? Minimum,
Larry Lepard 0:48
minimum, minimum of 10. And I, you know, I mean, I’ll just give you an example. Now, some of these are only 25 basis point positions in my fund, but some of the drill stories I own, I literally own 25 or 50 basis points. That’s a half of 1% you might say, why even bother? Well, the reason to bother is that, if I’m right, you know, some of those can go up 10x and so half a percent becomes 5% or go up 20x it becomes, you know, 10% on the other hand, the half, you know, the company can fail, and so I lose a half percent. So, you know, if you look at my total portfolio, I’ve got over 100 names, but you know, if you look at the drill story and the producer side or the so they’re the three buckets, they’re producers, developers and drill stories, I’m probably 65% producers, and mostly growing producers. I’m probably call it 20% developers, and then the balance was at 15. I think it leaves. Is our drill stories. So, you know, as I said, and this is accounting for the risk we talked about earlier. You know, a producer that’s making money, there’s less risk, and by the way, they can do just fine, especially as the multiples expand. I mean, some of these are still quite cheap. So, so yeah, I mean, I think people should lean tour with the producers, and then, you know, if they want to take a flyer on a drill story or a developer, that’s fine, but they should recognize that they’re taking a bit of a flyer, that it’s got more volatility to it. And, you know, I’m going to give some names, but I should also caution, I mean, I buy and sell these things all the time. I mean, you know, there were some names I would have given you two months ago that are now up 150% right from where they were two months ago. And frankly, I’ve, I’ve sold them down quite a bit because they got ahead of themselves. So, you know, it’s, I think it’s important to when you’re whatever you’re looking at, to understand when the thing you’re looking at is cheap, and when it’s expensive, and I’ll give you the metrics. I mean, you know, in the drill story area,
Trey Reik 2:46
next question, what is your favorite metric? Like when you say to your wife, these gold stocks are so cheap, book, the cash flow, you know, price? Yeah, I
Larry Lepard 2:57
just look at metric. I look at enterprise value to EBITDA, okay, more than anything else, you know. And
Trey Reik 3:06
and what historically has it been? And where are we? You
Larry Lepard 3:10
know, in 2011 it was as high as 20. I think a good long term average is eight to 10. I think some of the better companies in my portfolio are trading at two or three, depending on whether you’re looking at that’s probably one year out. If you’re looking at trailing, maybe they’re trading at four or five. So I think that you know, what that implies is these companies could actually double in value without earning any more money. Just, you know, as these stocks get recognized as the mag seven becomes less attractive, and gold stocks, you know, which are up for the year. You know, I’m up 30% this year, roughly. And the mag seven is down, you know, I don’t know, a similar amount, but some amount. And, you know, as this whole category becomes more attractive, people are going to be willing to pay more per dollar of cash flow. So that’s probably the best metric. I mean, there’s different metrics for different areas, though, too. Trey will say, like in the drill story area. You know, I look at market cap to how many ounces I think they have. So an ounce on the ground, every ounce in the ground, is theoretically worth $3,100 once you pull it out. Well, I’ve got some companies that are trading at $9 per ounce on the ground. Now it’s going to cost money to get it out, but it’s not going to cost 29 2900 to get it out. So, or 29 you know, 3000 to get it out, right? So,
Trey Reik 4:25
so you mentioned different sectors of the industry. Where do you stand on, like your average market cap and your geo? That’s a great one too. Yeah, just to give people an idea, how big are these companies? Well,
Larry Lepard 4:39
the sweet spot, in my opinion, is when they’ve kind of gotten to 100 million or above, because below that, the financings are tough. They don’t have enough following. The institutions can’t buy it, you know, etc. Maybe the sweetest spot is more like 500 to a billion, because you can still from from 500 you can to go from 500 to two and a half billion. You can do that. Mm. You know, I mean, when you’re, I mean, when you’re, you know, barrack or something. You got a $40 billion market cap. You’re not going to go to a $200 billion market. It’s not going to happen. So, right, right. Um, but you know, some of, some of the biggest multiples are below, you know, 500 some of them, I mean, I’ve got a lot of companies that are 100 million, you know, now they’ve got financing risk, because at that size, no one’s few people pay attention. But you know, if they’re if they’re fully financed and they’re generating cash flow, well, then that’s a nice place to be. I mean, I’ll give you my favorite silver producer right now. And you know, it’s up 100% from the end of last year, so you’re not getting it as cheap as I bought it. But you know, vino silver, you know, has got a $270 million market cap, you know. And these guys are going to grow production, then silver price is going to go higher. Their margins are going to grow. I mean, I was calculating it yesterday, just playing around with the numbers. I mean, if we go to $50 silver in four or five years, which I think is very doable, and they achieve their production growth targets, they’re going to earn their market cap, you know? And then it should trade it 10 times a market cap. So, right? I mean, so this is a potential 10 bagger. If silver goes where I think it goes, if they grow the way they I think they can grow so, you know, they’re, they’re, you know, that’s the and that’s what you get when you start. I mean, I bought it more like 100 million, and it’s at 270 now, but you know, that’s what you get when you start lower right,
Trey Reik 6:24
you brought up silver. So, yeah, what’s your exposure to silver and platinum? Yeah.
Larry Lepard 6:30
Well, as you know, there are very few pure play silver companies. I mean, you know, all these companies have silver and gold. I mean, you know, Pan American used to be all silver. Now it’s probably almost 5050, silver, gold, but there are some pure play silver comings. I own all of them. I love them. As we all know, silver is a smaller market than gold. It’s a more volatile market than gold, and it’s a two tier market. It’s not just a monetary metal. In fact, it’s really less of a monetary metal than gold, because central banks don’t really hold silver. But it also has all these uses that mean there’s not much stock laying around, you know, because it gets used in solar panels and electrical chips and so forth. And so, you know, when things get tight in the silver market, as you know, it goes up faster than gold, right? And so, if we’re going to have a bull market in silver gold, which I believe we’re in, and we’re going to have Silver’s going to go up faster. I mean, Silver’s Silver’s at 30 now. I mean, silver could double to 60, in my opinion, the next year and a half, two years. I’m not sure gold’s gonna go from 3000 6000 the next year and a half to two years. I mean, it could go to 440, 500 and the silver miners are more levered because they have actually a there’s more margin in the gold miners and the silver miners. The ASICs and the silver miners are running in the 20s, mid to high 20s, and silver prices, until recently, in the low 30s, they weren’t making much money. So when suddenly, if silver goes to 35 or 40, percentage gain in their profits is going to be much larger than the percentage gain in gold company profits as gold goes higher. So so there’s more viewers ASIC means average sustaining costs, all in sustaining costs, right, the cost of mine, and then reproduce the ounces that you mine. So, so, yeah, so silver, and to my portfolio, I probably have a 30% kind of pure silver weighting. I mean, they’re really probably only 10 or 15 names that can kind of say they’re more or less all silver companies. Most other miners have a mixture of silver and gold.
Trey Reik 8:31
And where do you stand on platinum and copper? Yeah, so
Larry Lepard 8:34
I think they’re both going higher. I’m just not smart enough to know how, particularly copper, which is somewhat driven by economic growth, and I think we could have a tough economy here. So I’m, you know, Barrick is pivoting towards copper, and that’s fine. I’m not a copper guy. I’m sure platinum is going up in value. I know it’s limited in supply. I have one small drill store that I own that’s silly, cheap. I’ve been buying it recently called Clean Air metals. It’s a great platinum palladium deposit in Ontario. But in general, that’s just not, that’s not the area that I’m in. And same with uranium. I mean, there’s so many other minerals I’ve really tried to stick to what I consider the two pure monetary metals, or almost pure gold and silver.
Trey Reik 9:18
Is it because of the monetary component, or just you only want to do a small number of things?
Larry Lepard 9:25
Well, I guess it’s probably a little bit of both. I mean, you can only do so much, right? I mean, to learn the copper business. I mean the uranium business. I mean, I just don’t have the bandwidth to do it. It’s hard enough for me. As you know, they’re about 500 of these stocks, and I sort through them all the time. It’s hard to keep on top of them, right? You know which the best names are. So that’s, that’s a full time job. And
Trey Reik 9:45
40 years ago, all the golden world was found in South Africa, Mexico, Canada and the US. And now it’s, you know, found in Tanzania and the Carex Republic and all this type of stuff. How do you look. The geographic hurdle, or you
Larry Lepard 10:04
it’s a great question, and I like Rick Rules View that all geographies are dangerous, including Canada, the United States, just because they’re because they’re government, internal
Trey Reik 10:12
expropriation from taxes and that type of Yeah,
Larry Lepard 10:15
exactly, and, and as we all know, as these mines become more profitable, the government’s become more greedy. Yes, there are some areas that I will not go into, you know, there, and there are areas that I’m very leery of, but, but in general, you know, there are also opportunities in some of these less developed areas. I mean, I know there are people who say, Well, I’m only going to buy gold stocks in Canada, the US and Australia, and that’s fine, but you pay a higher price for doing that. And as I say, I’m not sure that geopolitical risk is not necessarily as low as people think. Africa actually, in my view, has been unfairly painted as a dangerous place. I’ve made a lot of money investing in Africa. And as it turns out, Africa’s got an enormous gold endowment all the way up from the whitish land all the way north, you know, that whole western side of the country, and many of those countries are fairly stable, like Coach Iver and so forth. So Ghana, I mean, there’s a, you know, there’s a, really a couple of good companies. I’ll mention when we get to the company list there. So I
Trey Reik 11:20
think one of the things people miss is, in a lot of these countries, like the Congo and all the way down, they really need these mineral resources developed. And, you know, they’re actually more focused on developing the resources as and they can’t take them away, because they can’t operate them themselves, right?
Larry Lepard 11:40
That’s exactly right. They can’t, but they can try. They can try and increase, you know, the revenues. And they, you know, they, they hold you up at times. I mean, to the miners credits, you know, the miners are all kind of pretty well United at the management team level of saying to the governments, hey, government, you mess with this, and we’re out of here, and there’s no way you can produce this gold. And so the government smartly then says, Okay, I’ll settle for my 3% NSR, for my 30% in taxes, or for whatever it is I get, because that’s real money to me that I need to help my people. So, yeah, it’s but that’s not to say, you know, there have been problems. I mean, there are there are problems. There are issues. There is some unrest in certain parts of Africa. And one has to be somewhat careful. I I actually thought there were. I mean, in recent, more recently, some of the South American things have kind of gone more in the wrong direction. Peru, well, Argentina was really a problem when they had capital controls. But Malaya is kind of unwinding that which is a positive. You know, the the Peru stuff is not great, to be honest with you. There was, there have been some ups and downs in Mexico. It now appears that we’ll be okay there. But you know it’s, it’s always a risk everywhere. Ecuador, for quite some time, was a problem. Venezuela has always been a problem. Wouldn’t touch anything there. But you know, it’s, it’s really kind of case by case. So
Trey Reik 13:05
my last general question is, how do we know that the gold stock lag isn’t foreshadowing a gold price decline? We really don’t.
I mean, that’s, that’s the catalyst to close the gap?
Larry Lepard 13:22
Yeah, that’s, it’s, that’s a great question, Trey. And I wish I knew the answer. I don’t entirely, but I think, I think this is typical wall of worry kind of stuff. I think, you know, until as recently as six months ago, I’d look at, I always look at the analysts, the Toronto analyst estimates of future gold prices. And six months ago, the gold price was at 2500 and to a bank or to an analyst, they all had the one year out estimate of being 2100 or 2000 so we’re at 26 and we’re going down. Well, guess what? That didn’t unfold. We went from 26 up to 31 and my guess is now they’re saying, Okay, well, maybe 25 sustainable. But, I mean, arguably, it’s ironic, but when we’re at 35 or four, and they’re all saying it’s going to 10, well, then I’m going to get nervous, right? Because you know, and by the way, when you know, when we transition from here to there, people are going to do the math that you and I were just speaking about, with respect to these gold stocks, and they’re going to go, Oh, my God, right. You mean to tell me I’m buying three times cash flow at 2600 and the gold price is going to 4000 and I’m paying one times cash flow at 4000 well, I need to own the stock. It’s going up and so, so I think that’s in our future. What’s going to catalyze it? I think the biggest Catalyst, and I talked about this in the book, will just be kind of the recognition, the wider spread recognition of what you and I believe and know is kind of the sovereign debt issue. And I think gold sniffing it out. That’s why I mean gold should not be doing what it’s doing. I’m surprised. I’m surprised. The gold price at 31 there hadn’t been anything really that’s happened, and yet it’s just quietly marched from 2070 last March. I mean, one year later, we’re at 3100 that’s a damn good game. And so my sense is it’s sniffing out what’s coming. And when that coming thing, what I think that coming thing is, that’s the title of the book, the big print, you know, the government has to print money to keep the system going. And when that happens, I think it’ll be very similar to what happened in the COVID example, where, you know, gold very quickly went up 30% you know, another 30, 40% right? And the gold stocks exploded. I mean, in those two years, in 99 my fund went up 97% in 2000 2000 went up 122% but full disclosure, it’s been down since then. I mean, until recently, you know, the next couple years, when Powell started tightening, I got hammered, right? So it’s a very volatile industry, but I think what’s going to happen is, I think the sovereign debt issues are going to become ever present and larger, and they’re going to burst onto the front of the page of the New of the mag, of the newspaper, and we’re going to see a return to zip and a return to QE and a realization that, in spite of the problem that we have with inflation, which is it’s really in the threes, not the twos, they’re going to say we got to ignore that, because we got to keep the system going, and therefore we got to print money. And that’s just like, that’s like nectar to, you know, to gold bulls. I mean, it’s just the gold is going to go to 5000 and when that happens, these stocks are going to explode, right? I mean, I, you know, I fully expect, I expect some more 100% up years, but hasn’t happened yet, and I’m not sure when that’s going to happen. I I put that is likely to happen in the next two years, but no guarantee, right? Just to guess so
Trey Reik 16:45
with the usual disclaimer that we are Yeah, in no way soliciting individual companies can you Yeah?
Larry Lepard 16:54
I’ll give you a big, long list. There’s a lot of free work. I own, yeah, I own all these. Everyone can make their own decisions. So let’s go through kind of the emerging producer or the producer area. And some are emerging. Some are pretty big. Started the big ones, I like a my like caliber, like Avino silver. I mentioned that I like Dundee a lot, like Adriatic. It’s a silver miner that’s kind of emerging over in the Bucha Baltics. I like Eris, very misunderstood. It’s in Columbia, very cheap. I like B to the goose project is going to come. It’s going to work, laggard, right? Like it has, it has been a laggard. You can still buy it cheap, but I think it’s going to work. And people a little bit worried about their mine, and in Philippines now the Mali mine, but I’m not too worried about it. I I know a lot of people from over there, and I look a lot at all the security. I mean, basically they have extremely high security. The smart guys in Africa know how to handle it. Maya is an amazing silver company with a great deposit. It’s still kind of emerging. You know, I like that standard core heck club, Pan American, all silver names. Galliano is a producer over in Africa that’s misunderstood. The people put an Africa discount on ozone. Same story, or zone is silly, cheap. Go run the cash flows on ozone. It’s unbelievable. There’s an amazing cash flow, and it’s growing, and the stock is cheap, hock. Child’s a good company. Good name, undervalued. Silver producer, endeavor. Silver is good heliostar is a really nice development growth story. I own G mining got too expensive. I’m lightening up. Just Sold it. K 92 was a great long term story. Ken Ross, a good major. Alamos, a good major. It’s not cheap. Torax is a very nice major, still relatively cheap in the development area. Some of these are really small names. A couple of them on the board of getchell. Gold is a great story in Nevada. West vault is another great story out west. Cabral, I’m on the board of it, so I’m just full disclosure there, but it’s a great development drill. Development story in Brazil, Discovery silver. I think it’s an amazing story. Very well run Tony mccooch. Have a lot of respect for him. They just bought an operating mine. They’re developing a huge silver mine. Goldshore is a nice development story. Maritime is coming along. Montage is coming along next. Gold is coming along US. Gold is another good development story. Silver Tiger is a great development story. Skeena, good development story. And then on the drill story side, I love Banyon. I love lavas. I’m on the board of lavas. It’s down in South America. So full disclosure there, but I think that’s a very, very prospective deposit. I love collective but this is another one of these ones. It’s, it’s up almost 100% you know, in the last three months. So I’m not sure I’d buy add to it here. FREE gold is a great is a great drill story. So those are just kind of some highlights. I mean, I their other name. I haven’t put every name. Came in here, but I just, I put some things I felt, you know, reasonably comfortable people could take a look at potentially. I
Trey Reik 20:05
think that’s a great list. It’ll keep people busy for at least a couple of weeks,
Larry Lepard 20:09
exactly. I mean, like I say, do your own work. And I could change my mind on any one of these in a minute, right? And be out of there. And I’m not going to call you and tell you, so, right? You got to do your own work, but I own all those right now. Great. Well, Larry,
Trey Reik 20:23
you were very kind to take this second hour to spend with us. Today. We’re gonna give you three months off, so we won’t call you back and look, look, I enjoy it.
Larry Lepard 20:36
And you know, the next time we’ll have to get together up on the cape when I’m back up there this summer. And you know, I love your letters. People should subscribe to your letter. It’s Trey does a great write up on the gold market, gold stocks, etc, which we subscribe to. I highly recommend that. So, yeah, look at some Trey. I got my fingers crossed. Man, I feel like our day, our ship is about to come in here, these that’s what I feel like. I hope I’m right and
Trey Reik 21:02
well, I look forward to seeing these gold stocks finally reflect this $3,100
Larry Lepard 21:07
gold price, and I think they will. I think the next year or two is going to be pretty are going to be pretty good for us, I really do. So, yeah, you know, we’ve endured a lot of pain, that’s for sure. Excellent. Well, good
Trey Reik 21:20
to see you. Bye. Take care. I’m here today with Brett rentmeester of wind, rock wealth. And Brett has had the opportunity to review my conversation with Larry Lepard, where we discussed his new book, The big print, his views on hard money and solutions, portfolio solutions to protect capital if we have some sort of monetary challenge in coming years. So, Brett, thanks for joining us. Nice to be with you. Thank you. Terrific. So we were talking earlier that your views are somewhat similar to Larry’s with respect to hard money, the Fed and the global financial system on a scale of one to 10. How worried are you about where things stand?
Brett Rentmeester 22:14
Well, you know, the problem with that question is you could have answered a 10 anytime during this last since, oh, eight period, and it’s always the devils in the details of timing. So I’d say, I’d say we’re very concerned about where we’ve been. And really, when we founded our firm back in 2012 The premise was trying to be an advisor that was keenly aware of the risk in different way of having to look at a world that’s printing money and kind of on a different trajectory. So our worries always been there. But I think, you know, the debate is, is this the big one? Are we at some kind of reset event, or is there another way to restructure give pause and kick the can, and that’s always a hard question to answer. Right in 2024
Trey Reik 23:05
stocks, I think surprised to the upside, it would be fair to say that second year above 20% 25.2% and yet gold outperformed the S and P even with rising 10 year treasury yields and a fairly strong dollar you’ve there are lots of theories about why gold has been as strong as it has in recent weeks and months, certainly year to date, I think it’s taken a lot of people by surprise. Do you think gold strength is finally reflecting the concerns that we’ve both shared for so many years. Are we hitting inflection points and anti dollar sentiment and anti fed sentiment and worries about the US deficit? Yeah.
Brett Rentmeester 23:50
I mean, I think we’re certainly getting there, you know, judged by more mainstream people talking about gold. But the reality is, all the data I see suggests most investors still don’t own any gold or precious metals. So I think we’re far away from there being a panic in the world over currencies, such that there’s a wave of money, you know, into gold and silver. I don’t think we’ve seen that yet. And I think, as we both know, one of the issues with gold and silver is it’s great to own it when you actually physically have it in a vault or tangibly. But a lot of the so called Gold and Silver ownership are in paper contracts, things that you may or may not be able to actually get your hands on the physical metal if you needed it. So I think that’s another part of the story that I don’t think we’ve seen, which is, is there going to be a scramble to get your hands on the physical metal itself, and if so, a lot of the data on gold and silver, as we both know, has, you know, paper contracts relative to that one ounce of gold. That last data I saw was about 131 times. So I don’t think we’ve seen that part of the story. So if any of those things occurred, i. You’d see much more upside potential in gold and silver, well beyond what we’ve seen to date, dating or
Trey Reik 25:08
referring back to our conversation with Larry. Larry is one of the, I think, unique investors who is a total Bitcoin enthusiast, and yet in his Fund, which he has run for a couple of decades, equity Management Associates, he focuses on not only gold miners, but emerging gold miners, and even has a few exploration and development companies in there, some emerging producers. And we all know that is a tough road to hoe in terms of research and volatility and that type of thing. But my question is, at wind rock, how do you guys differentiate between Bitcoin and gold? And you know, what roles do though those two assets play in your approach to portfolios? Yeah,
Brett Rentmeester 26:02
you know, I think for gold and silver, it’s always about what is a safe haven investment in a world that’s printing money, where we could have an issue with currencies at some point, and for us, gold and silver are the key answer to that, because they’re one of the few assets that have no counterparty risk. There are other hard assets, real estate, other things, but most have debt. Most have other factors. I think gold and silver are the cleanest way to kind of be out of the system if you want to. I mean, you can own physical gold and silver. You can hold it outside the banking system, either individually or in a third party vault. You’ve got no counterparty risk. I mean, it’s unique in that regard, bitcoins always been complimentary in our minds when we started getting involved, back towards 2012 2013 it was very much a new experiment, and there’d been a lot of failed experiments leading up to that of digital money, but it was the first to really take root, and although it’s been a very volatile path, I think we see it as a complement to gold and silver. We’ve always viewed the two as having merit in different ways, in some ways very similar, but as we see in periods like this week, during the volatility, I mean, Bitcoin still is not kind of the risk free escape valve it may become over time. It certainly has that potential in the future, but you know, right now, I think it still correlates to risk markets, and gold generally hangs tight in times of trouble. I think over time, that may change, but I see them as very complimentary as a basket of what could I own if the problem in the world is too much debt, printing money and maybe ultimately a currency crisis like, Where can I go? I think those two are key elements to that.
Trey Reik 27:49
After the weakness in global equity markets last Thursday and Friday, the S and P was down about 10 and a half percent, I noticed this morning that Bitcoin touch 74,000 down from a high a few months ago of about 110 So would you say that Bitcoin? Is it fair to say that Bitcoin has developed a pretty close correlation to equity and risk markets, as opposed to being correlated to gold?
Brett Rentmeester 28:20
Yeah, I think it still leans in that direction. I think it still leans towards the flow of global liquidity, and there’s still a lot of speculation in crypto. We know that. I think it’s maturing, though it’s almost like we have to we’re talking about Bitcoin like it’s money or a substitute, but we also have to acknowledge it’s a technology, and it’s going through a technology adoption curve. And most technologies, you know, are not a straight line. There’s there’s a lot of ebbs and flows. But what I think could change the equation in this is when you look at the regulatory environment that’s likely ahead of us in the US, and what the likely adoption will be throughout Wall Street and banks, etc. We’re not there yet. That’s kind of we’re in this gray zone, and because of that, I feel like, despite those promises, the market is saying, well, let’s wait and see. But I think we’re setting up for a framework where maybe this discussion a number of years from now, it might be viewed differently. It might be more of a safe haven asset right now, we still think there are, you know, key elements of that, but it’s still a technology. But as a technology, when you compare it to it’s a, you know, the adoption rate, it’s, it’s moving at a quicker pace than Internet adoption. So, you know, I think you’d be foolish to think it’s, it’s going to flame out, or not continue to progress, and
Trey Reik 29:43
not to be too intrusive. But do you have Bitcoin representation in all of your portfolios?
Brett Rentmeester 29:53
We customize portfolios, client by client, but I’d say generally, the answer is yes, even our more conservative clients. Have some allocation, because, you know, I think we’re entering a world where there are, there’s certainly assets of the past, like gold and silver that have merit, but increasingly, I think it’s trying to figure out where the world is going to move. And I think blockchain and Bitcoin and a number of other things are part of the future. And even if you’re a conservative investor, you ought to have a piece of that, however small in a portfolio. And
Trey Reik 30:25
how about my favorite asset class, gold equities. Does win rock maintain exposure to gold equities in additional to your physical silver and bullion? Yeah,
Brett Rentmeester 30:37
we do. We do generally, an allocation to precious metals. For us is a mix of gold, silver and actively managed mining companies. And you know, the mining companies have been volatile. And you know, we could ask the same question whether they move more with gold or more with the market. But I think, as you and I would both appreciate, with gold at these levels. You know, the margins are now tremendous at some of these companies, so that has been a staple of our portfolios, although we’ll, at times get a little more active. In years past, when it ran way up, we took a lot of gains and had a smaller position and and more recently, have added again. So that is definitely a piece of the equation.
Trey Reik 31:21
And to really put you on the spot, there’s certainly been a lag between the performance of gold shares and gold over, say, the last three to six months. And I you know, there’s lots of reasons there, not least of which is, I think sometimes when gold goes up rapidly for things like this physical movement back from London, that gold equity players just assume the gold price will weaken and you know, at some point in the future. So Why get involved in gold miners and then have them back off on you? So the by question that’s putting you on the spot. Do you think gold stocks have lagged for those reasons. Or do you think gold stocks are forecasting the fact that the gold price is likely to retreat?
Brett Rentmeester 32:09
You know, I think it’s probably more related to having the rug pulled out multiple times in the past. Gold in the past run has run up, and it seemed like a great opportunity for miners, and then all of a sudden, oil went way up, and their cost to get it out of the ground went so much further than people thought. So I think there’s just, it’s an Listen, it’s an it’s kind of an area we like. We like things that have potential and the right tailwinds, but are kind of unloved and skeptically looked at. I think we’re in one of those periods right now. But clearly, as we look today, price of oil is down. You know, some of the headwinds that could offset a higher gold price don’t seem to be prevalent today. So I think the backdrop is fairly positive,
Trey Reik 32:53
and with respect to the reputation that gold miners earned in the period following 2012 when gold had gone up 12 years, 12 consecutive years, which nothing should ever do. And I’m not sure any other asset has ever gone up 12 consecutive years, but clearly that led to, you know, dissolution of discipline and management and capital allocation, etcetera. My question is, gold stocks have certainly suffered that reputation. Do you think there have been improvements in capital discipline and execution and management that make that characterization anachronistic? Or do you think it still applies?
Brett Rentmeester 33:36
You might be closer to the details than we are in that regard. I mean, I do think with some of the ShakeOut the last 10 years, there is more discipline in the space, better management teams, more of an acknowledgement of costs relative to, you know, revenue, but so I think it’s better, you know, I don’t know if it’s quite up to the standards of some industries, but, I think it’s on the right path, and that’s part of the reason we use active management in the space. We try to rely on a couple firms that are into the details at the level that you’re discussing and
Trey Reik 34:11
just to wind things up. And thank you for spending the time with us. What’s your you know, I can’t every conversation has to have a tariff question. So what’s your view of the fact that they trump? Administration just took the blended tariff rate from two and a half to 22% which is the highest since 1910 the markets fallen 10 and a half percent. Are you think tariffs and are inflationary? Are we in trouble? What’s your view of this tariff morass?
Brett Rentmeester 34:42
Yeah, well, you know, it’s a challenging question we’re all trying to figure out. And I think, I think, I mean, at our core, we’re free market thinkers. We like free trade, etc. I think the promise of trying to use tariffs as a negotiation. Trading tactic to get down to no tariffs is a good aim. That’s negotiating, and we’d rather see that, or reciprocal tariffs. If you’re going to charge 20% fine, we’ll charge 20% if you’re not going to go to zero. I think most people are supportive of that, that kind of mindset to get to a fair, equitable trading relationship globally. I think the problem is people are trying to figure out what the strategy is. Is this just a negotiating strategy? And in three months, we’re all going to go, Okay, we got free trade, and all these countries, everything’s good, or, you know, is it a is it potentially a pin that kind of pricks the bubble we’ve had in money creation and asset values, and that’s really the dilemma. So I think right now, I’d say we’re probably more on the side of it’s a negotiating tactic, but the longer it’s outstanding, the more there’s a risk for collateral damage and unforeseen things to break in the global economy. And I guess that’s the risk right now. So on one hand, you want to feel like it’s a time to take risk and that these things will be backed off in a couple months from now. Everybody will be in good shape. But again, you know, the plumbing of the global economy, everything’s so over levered, so interdependent, that something could break along the way, even if that’s the intention. So I’d say we have a very balanced view right now with just sitting back and not reacting too much and kind of seeing what unfolds
Trey Reik 36:25
and in these exciting and tumultuous times that we find ourselves, if viewers would like to get in touch with you to talk about managed account or a little help and analyzing their own portfolios, How best can our viewers get in touch with you?
Brett Rentmeester 36:42
Yeah. I mean, I would say the best place is our website, windrockwealth.com, it’s got all our contact information, but we also do a lot of interviews and articles, thought pieces on gold and silver and Bitcoin. So there’s a research section that’s probably a good place to start to see if we’re in good alignment with what an investor is looking for
Trey Reik 37:02
excellent Brett, thanks for your time. We’ll talk to you again shortly. Okay
