Ask Fleck
Q: Fleck: I'm flat it until the miners perk up.
What does "flat" mean to you?
Q: No question - just a holy cow it’s way worse than 1999 moment with this WSJ headline:
Sam Altman Seeks Trillions of Dollars to Reshape Business of Chips and AI
Q: In the Einhorn interview that you posted yesterday he commented that he only buys small cheap companies when they are 5x eps and when they are buying back stock because otherwise they do not work. I
I don't know much about gold mining stocks, but have you noticed that ones who buy back their stock perform better than those who do not? (Apologies if this is a stupid question as I understand mining is capital intensive and possible that the smaller companies are unable to buyback their stock).
Q: I have followed Mr Hickey and you for years so apologies for my ignorance.
Can you simplistically explain how gold tons within GLD can decrease while GLD and gold price in general goes up in any given time frame? And why it is bullish for gold prices when the above occurs?
Q: Bill:
Is it possible that the Fed will not allow a repeat of the dot.com bust if/when market forces kick in that could drive it much lower? They've been pulling rabbit's out of their hat since '08-'09 so markets haven't gone down and stayed down for any appreciable length of time.
This moral hazzard coupled with the passive bid has twisted our "free market" into a casino. No wonder the miners have decoupled from gold. Who needs gold or miners if stocks always go up?
The political pressure to keep stocks elevated is massive. Last year they created a bank bailout fund from thin air and made everyone whole regardless of FDIC limits. More moral hazzard; no consequences for your actions. Did the same thing when Covid insanity hit and stocks tanked, for six whole weeks before they rode to the rescue with $6 trillion of new money.
Obviously they can't do this forever, but who really knows? Could this be a reason for the head scratching disconnect between miners and gold?
Q: Fleck,
For those that are interested, here's a great recent discussion with Ross Beaty in which he talks about gold and mining stocks. He talks about Equinox and Lumina. At the very end he gets about as close as he can to confirming that he's going to sell Lumina this year.
Ross Beaty Interview
Q: Just a thought from someone who isn't in the game anymore:
Here we are, years of a bubble that never seems to end as the rally gets more and more narrow. Back in 2000 (and I think it was this time of year) we were about a month away from the Naz breaking 5000. If you looked anywhere but tech, there were incredible value stocks beyond cheap, and the gold sector was left for dead.
I think it was '99 when the Brits sold all theirs and set the bottom at around $250 (I had started buying bullion at around $325 after that). All you had to do was sell tech and buy anything else and you were in a good position.
So here we are again, and again, after years of bad Fed policy (Volcker was the only real deal I've ever seen) and the rally narrows as we head into March, but now it's the S&P that is at the edge of 5000. Wouldn't it be interesting if we had the same ending, break 5000 on a major index, big break and panic, then a few weeks (maybe a month?) later you get a test of the old highs (one I used to bail on any tech I had left) and then the real decline began.
Not saying that is going to happen but the stars do look lined up.......
Q: The current generation of investment "professionals", those brightest stars, armed with their Ivy League "educations" (polluted by DEI nonsense and ESG indoctrination), gave up on analysis in favor of simple "price" recognition. They know the "price" of things but have no clue, nor interest in, the "value" of things.
Pick a stock and see it suddenly drop 20% on a small BS reaction from some idiotic sense of a "miss" rather than a "beat" on a minor piece of financial news (which is likely not a real number anyway). Well,...that hurt so next time, I'll pick an ETF or an index that protects against a sudden rupture in an individual name.
"Investing" has evolved into a simple exercise in "gamesmanship". Perhaps, half (or more) stock market "action" resembles a perpetual bid from both passive influence and stock buybacks. Since many of the remaining genius "investors" are essentially lazy and fearful of "under performing" (which threatens AUM), they simply "play" themes by buying an ETF that captures that "theme" which, in turn, relies on a chart pattern to confirm that the "theme" is "working".
Another, even more pervasive influence is "index" or "bench mark" chasing, which resembles a cattle stampede, with all the cows clustered together seeking the warmth of the herd, for fear of becoming an "outlier". This results on frequent FOMO influences that make no "rational" sense but, nevertheless become dominant.
The entire "game" boils down to understanding the lowest common denominator of intelligence, which, in turn evolves from chart patterns that are recognized by the dominant "players" in the game.
Q: Hi Bill:
(1) This slow motion miner crash is really rough. Have you yourself or other successful professional investor you know been in red and waited so long for a turnaround in anything that comes to mind, that just never came? Got example to soothe us?
(2) If miners take a huge tumble, you going to step in for bargains or maybe even throw in towel? They look ready to dive if gold corrects or dollar keeps moving up or even if stock market corrects. Keep "unreasonably" low buy orders in, maybe get lucky.
This is pretty crazy.
Thanks much
Q: Milton Berg posted some "Xeets" about the potential for a stonx turning point. The insanity hurricane is blowing so hard even the flying pig, MU, is stalling out.
What odds would you assign that this bout of speculation breaks down hard soon?
Q: Bill, I believe some of the large funds are not able to buy certain stocks due to that stocks size. If this is correct which of the pm tickers are eligible to be bought?
I mean for example is CEF or say NEM a way to participate in a gold rush, should that occur.
Also by the way I'm 74 and as a kid NO family had 2 cars
Q: If you're the CEO or Board of one of these huge miners like NEM or GOLD, and your stock is just dropping day after day, month after month, despite gold price now being firmly above 2000 for a while, and supposedly your company is generating tremendous free cash flow, why are they not aggressively out there buying back their stock?
If the disconnect is really as massive as we all think, then what am I missing?
Q: I'd like to see Mike Green debate Burt Malkiel on Grant Williams podcast. Just heard Burt say on a podcast that passive indexing could get up to 95% of the market and it wouldn't matter. Says even as low 5% of market being active managers is enough to keep market prices reflecting all public information efficiently.
I'd like to hear his response to Mike Green pressing him on if 401k passive flows into cap weighted indexes create bubbles, distort markets, etc....
Would be great to hear those two go back and forth on this issue.