WHY IS PLATINUM AT $836?
There is no logic for platinum to be trading at a $600 discount to gold. At times in markets, prices are irrational. The art is to understand when such a moment exists, and then, if you have the fortitude, do what George Soros said he did betting against the British pound in 1992, “I go for the jugular.”
Platinum is not trading down, because of its rareness and its utility and its cost of production. It could be at $936 or $1036 or $1236, and will be, as it moves it’s way much higher.
WHY IS GOLD GOING UP?
Gold has certainty in it’s purchasing power. That has value in an uncertain world. There is also not a lot of gold in the context of world money supply.
WHAT IS YOUR BIGGEST STOCK POSITION?
Sibanye-Stillwater, (SBGL) Is the largest platinum miner in the world and a major gold producer with a visionary, disciplined chairman trading at a remarkably low price. Although my average cost is $3.67 I would still be a buyer at $4.75, where it trades today.
WHAT IS YOUR FAVORITE INVESTMENT STRATEGY?
Buying LEAPS, long-term calls, on high-quality stocks with big dividends where option pricing models typically overprice the foregone dividend, resulting in opportunistic option pricing, particularly for a stock who’s price is cheap. For example, I am long January 2021 AT&T LEAPS, with a $30 strike at an average cost in the mid threes. Ultimately I intend to exercise these calls capturing a huge dividend, along with what I expect to be a significant upside in the stock, a function of its content portfolio, it’s dividend and it’s stable cash flow.