Forget about juggling a basket of country risk in places like South
Africa and South America. For his money, newsletter writer John Kaiser
would rather take a chance on explorers in his own backyard of the
Western U.S. based on millions of years of geology and some exciting new
discovery methods. In this exclusive interview with The Gold Report, Kaiser outlines the trends, and the juniors staking their claims, in Nevada.
The Gold Report: John, 2012 has been a
volatile year for junior equities. What is your thesis for diversifying
your portfolio to both protect and possibly grow wealth in this market?
John Kaiser: It's interesting that American
households currently have bank deposits totaling $8.7 trillion, which is
an all-time record, and yet these deposits are earning less than 1%.
This illustrates the anxiety about where the general economy and equity
markets are going. Given the risk that we could end up in a global
recession next year that could possibly deteriorate into a depression
down the road, it is understandable that the public wants to keep its
capital secure.
This could have very negative implications for the general equity
markets, which are vulnerable to all sorts of disruptions. That is why I
am recommending that cautious investors leave 90–95% of their portfolio
in low-yielding cash deposits and then shift the other 5–10% into a
diversified portfolio of extremely high-risk securities that could yield
some big winners. The area that I think is going to be very prospective
in the next few years is discovery exploration in the resource sector,
where stocks can go up 10, 20 or 30 times in response to a discovery.
TGR: A lot of the resource sector used to be focused
on South Africa. That's becoming riskier due to worker unrest. South
America has had violence and nationalization threats. Are there still
opportunities in relatively safe domestic markets like the U.S.? (more)
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