How Casey Report Readers Made 65% in a Week
Casey Research founder Doug Casey is loading up on gold again.
As you probably know, Doug made a huge bet on gold stocks last December. Since then, he’s put more than $1 million of his own money into this tiny sector.
Doug did this because he thinks the price of gold is heading much higher…and gold stocks are the best way to profit from rising gold prices. He wrote in March:
When people wake up and realize that most banks and governments are bankrupt, they’ll flock to gold…just as they’ve done for centuries. Gold will rise multiples of its current value. I expect a 200% rise from current levels, at the minimum. There are many reasons, which we don’t have room to cover here, why gold could see a 400% or 500% gain.
This should produce a corresponding bull market in gold stocks…perhaps of a magnitude we’ve never seen. A true mania for gold stocks could develop over the coming years. This could make anyone who buys gold stocks at their current depressed levels very rich.
But Doug didn’t buy “blue chip” gold stocks. He bet on tiny gold miners.
These companies are very risky. Some aren’t even making money yet. But, if gold rises like we expect, these stocks could hand Doug, and investors like him, monster gains.
We’re talking returns in excess of 1,000%, 2,000%, or even 5,000%. Most people can’t imagine making that much money on a single stock. But Doug’s hit many home runs like this over his career.
• To be fair, Doug bought most of these stocks months ago…
At the time, the price of gold was rising.
Of course, that’s not happening right now. The price of gold has fallen 10% since early August…including a 4% drop since Election Day. This wasn’t supposed to happen.
Heading into the election, most analysts thought gold would do well no matter who won. HSBC, Europe’s biggest bank, said the price of gold would hit $1,400 by the end of the year if Hillary won. If Trump won, it predicted gold would spike to $1,500 an ounce. That’s 18% higher than where gold closed on Election Night.
• Many precious metals investors are worried that gold’s falling…
But not Doug. He’s used the recent downturn as an opportunity to buy more gold stocks.
Louis James, editor of International Speculator, also sees the pullback in gold and gold stocks as an opportunity.
Louis explained why in an alert that he sent out to his subscribers yesterday. Today, we’re sharing the best ideas from that note with you for two reasons. One, we know many (if not most) of our readers own gold stocks. We also received many emails from concerned readers over the last few days.
We hope Louis’ insights help you better understand the recent pullback in gold.
• Louis says expectations of rising interest rates have hurt gold…
He wrote yesterday:
Many pundits have reasonable arguments for why gold’s retreat on Trump’s victory makes sense. To me, the most compelling one is that he’s been saying that the Fed should raise interest rates faster. As gold prices have dropped on mere hints of rate hikes, for years, the advent of an administration that will push the Fed to raise them more and faster is a perfectly plausible explanation.
You see, gold doesn’t pay an interest like a bond. Because of this many, many investors don’t like to own gold when rates are rising or likely to rise. But as we showed you yesterday, gold can do quite well during periods of rising interest rates.
In any case, the anticipation of higher rates appears to be weighing on gold.
• Louis also says Trump might not be as much of an “outsider” as people thought…
According to Louis, Trump’s tone has changed since he won the election:
[I]nstead of mustering his new power to declare war on the Establishment that had done everything it could to stop him, he declared peace. He asked his former opponents to work with him. He dropped the insults, bigotry, and boorish behavior. He sounded… presidential.
That’s when gold started sliding.
Then, as the week went on, Trump started backpedaling on repealing Obamacare and other measures. Perhaps most telling of all, he started tapping Washington insiders for his team. That’s a far cry from his pledge to “drain the swamp.”
• It looks like many investors aren’t as afraid of Trump as they were before the election…
In other words, the needle has swung from fear to greed in record time. Louis explained:
It sounds thin, but as the ridiculous saying goes, perception is reality. At least, in market psychology, it can be. If gold rose when Trump was up in the polls because investors feared him, it makes sense for that factor to lose force if investors stopped fearing him. That creates space for Trump’s stance on interest rates to become the dominant factor, pushing gold down.
Trump’s upset victory may be weighing on gold now. But Louis isn’t convinced this will last long: