By Kris Sayce, editor, Casey Daily Dispatch
In yesterday’s Dispatch, we gave you the old “gold is money” routine.
It would surprise us if that’s the first time you’ve heard it.
Our view at Casey Research is that everyone should own gold.
Whether it’s gold bullion or gold coins, it doesn’t matter.
But here’s the thing: physical gold is great if you want to protect your purchasing power over the medium- to long-term.
But one thing it won’t do is give you big triple-digit percentage gains in the short-term.
So if that’s what you’re after (and who isn’t), you have to look elsewhere… at a different kind of “gold”…
If this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch, we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from our in-house investing experts: Dave Forest, Nick Giambruno, and the founder of our business, Doug Casey.
At Casey Research, we love gold. But there’s one thing we (arguably) love more – the potential to multiply our gold returns. We do that with one of our favorite types of stock plays…
The Stock Market Isn’t Dead
Check out these returns… Who says you can’t make money from stocks anymore?
These are all of Dave Forest’s open gold-related trades in his premium service, International Speculator. One thing: Despite the name, these are mostly U.S.-listed stocks, plus a few Canada-listed stocks.
(And forgive us for redacting the stock names. We have to maintain the integrity of the service for Dave’s paying subscribers.)
But we make no apology for listing every open gold-related position – warts and all. After all, we’ve never said investing in stocks is a risk-free game.
The reason for showing you these returns is to make the point that through all the panic… and the perception that it’s only tech stocks that go up… Dave has an average return on his open gold positions of 106.7%.
That’s some record. And as we think about it, it’s another example of how you can use the “10 x 10” Approach to make this kind of speculation work for you.
You Won’t Find a Better Win Rate Than This
As you may recall, the “10 x 10” Approach involves dividing your investable capital across 10 different investment types. For instance, one type could be gold stocks, another cryptos, another tech stocks, another high-yield dividend-payers, and so on.
Then, in each group, you diversify into a number of investments that fit that theme.
Now, there’s no hard and fast rule about how many that should be. But the idea is that you’re aiming to invest in things that could give you a 10x return on your money.
Bear in mind that not every pick will pay off. As you can see from the list, not every one of his gold plays is a winner.
In fact, right now, of the 29 open gold positions, seven are losers, with an average loss of 35.6%. But the remaining 22 positions are in the black, with an average return of 151.9%.
That’s a nice ratio of winners to losers.
The beauty of it is that the winners, especially the big winners, more than make up for the losers. Of course, we wouldn’t necessarily expect you to buy into all 29 of those plays.
But even buying 10 of them would give you good diversification. It would increase your chances of picking up more winners than losers.
Now think about how that could work for your portfolio. Think about how it could work with the rest of your investments.
However, you may have one final thought – have you missed the big move?
No Excuse NOT to Buy These Stocks
Writing in April’s International Speculator, Dave says that investors haven’t missed out. (Current subscribers can catch up here.)
With gold stocks heading down the last several months, gold miners are now the most undervalued they’ve been in recorded history, relative to the S&P.
The only other time gold stocks even approached this level was in the late 1990s. That bottom set up the massive gold bull market of the 2000s.
Today we’re buying gold stocks at the right price. These are some of the cheapest investments on the planet right now.
That applies to all gold companies – not just the speculative plays. World-leading gold miner Newmont, for example, is paying a 3.6% dividend yield right now. This is a company making solid profits, and paying them back to shareholders.
Since Dave wrote that, gold stocks – as measured by the VanEck Vectors Gold Miners ETF (GDX) – are up around 10%. Dave’s picks have risen over that time, too. So he was right about foreseeing an upturn.
But this isn’t the kind of market where you break open the bubbly for a 10% gain. This is the kind of market where a 10% gain is just the beginning of a much bigger move.
That’s what Dave sees here. And that’s why he says that now is the perfect time to buy into the sector – and if you already own gold stocks, it’s a great time to add more.
As always, our favorite way to play the markets is with individual stocks – like the stocks Dave has on his buy list. ETFs are useful if you’re trying to invest in a hard-to-access market (for instance foreign stocks or commodities), but with something like gold stocks, there’s no excuse.
There are hundreds of them listed on U.S. exchanges… and Dave Forest has picked what he says are the best of the bunch.
Editor, Casey Daily Dispatch
P.S. You can find out how to gain access to Dave’s favorite gold plays here. But also know that gold isn’t the only commodity Dave is excited about right now. There are a group of elements that he says will match the return of these gold stocks.
In fact, one stock could make even better gains – a potential 617% return. We’ve shown you the great success Dave has given his readers above, so head on over to check out how he does it here.