Gold & Silver Rally: Monetary System Resetting or Just Another Bubble? | Jonathan Wellum
Summary
Precious Metals: The guest is long-term bullish on gold and silver as hedges against a historic global debt bubble and fiat currency debasement.
Portfolio Strategy: Advises establishing positions now and dollar-cost averaging over 6–12 months, with disciplined rebalancing to avoid overweights.
Miners vs Bullion: Expects miners, especially silver-focused, to see outsized earnings leverage relative to the underlying metals but stresses significant operational and jurisdictional risks.
Royalty Companies: Favors royalty/streaming models as lower-risk ways to gain exposure to mining cash flows compared to individual junior miners.
Commodity Supercycle: Sees a multi-year upcycle driven by digitization, AI, robotics, EVs, and power demand, with structural supply constraints.
Copper Demand: Projects robust copper needs and long lead times for new supply, supporting a positive long-term price outlook.
AI Infrastructure: Highlights data center build-outs and related power/equipment suppliers as alternative plays linked to metals demand.
Macro Risks: Flags debt, deglobalization, and monetary system stress as catalysts for owning real collateral like gold and silver.
Transcript
We have amassed a le a level of debt which is unprecedented in human history. Truly unprecedented. I think this whole monetary system we've had since Breton Woods is under tremendous tremendous stress. We want something that's real, tangible, and has proven itself over thousands of years. Hello and welcome to Wealthy. I'm Maggie Lake and joining me to discuss the outlook for Gold and Silver is Jonathan Wellm, the CEO and CIO at Rocklink. Hi, Jonathan. It's great to have you again. >> Yes, Maggie. Good to be back on with you and uh speak about such a interesting and hot topic. [laughter] >> Hot is hot is probably the word. I mean, we it's really been a historic run for these precious metals and I think a lot of people are wondering, does it feel sustainable or is this starting to look frothy? We were just talking before we came on about the huge swings we saw in silver just yesterday. I mean, how is this feel? How does this market feel to you? >> Yeah, it's a great question and we're getting that from clients and just what what is our position and so on. >> We we back up a little bit. We have to go back to why do we own the precious metals in the first place? Why have we built large positions in gold, silver and and some of the other uh metallic substances like copper, nickel and so on, but particularly the precious metals and that's because we're looking at a large large buildup in debt. Uh the whole debasement trade that's taking place um the demand for physical uh the you know the power demand for silver going forward in terms of AI data centers all of that. So when we look at the bigger picture, we want to be in this space for the long term despite the large price increases. Having said that, we're trying to warn clients and say, look, we've had a large move up uh in gold and silver, and we're starting to see a lot of volatility right now, which tells you there could be a consolidation, some price drops in the short term. Uh and from our perspective, that would be an opportunity to first of all re reallocate a little bit within the portfolio if someone's become overweight. uh in in in terms of precious metals, but also dollar cost average and pick off some opportunities for people who are uh coming into the market and haven't been in in the space already. But again, you want to take a longer term view on this. You just you don't want to be be, you know, suffering from fear of missing out, the whole FOMO thing, which we see all of the time come into the marketplace. Uh we do think this is a long-term systemic move. uh we think that we have intractable uh problems in terms of the the money supply uh value of fiat currencies del globalization all of these things that we can talk about these are longer term trends but that doesn't mean you can't get a lot of volatility and downward moves and bit bit of a correction in any of these precious metals at any time. So just be patient focus on the long-term fundamentals know what you own know why you own it and make sure you've got healthy allocations that uh are responsible and you're not overweight in any particular area. Yeah, I think this is I think this is such an important point and I and we all sort of nod our head and understand that, but when you're in the moment looking at your individual portfolio, those are those are things that are sometimes easier said than done. So, talk let's talk about the if you're in it already uh a little bit more specifically and then and then if you're not. So, if you're in it there, how do you there is a temptation to ride the winners, right? like how do you talk to clients about rebalancing and is it okay to leave profit on the table? I mean, it feels hard when something's experiencing these kinds of gains to actually rotate out of it. That seems counterintuitive to some people. It's very difficult and even for professionals uh the emotion is powerful and the pull to buy things that are going up is amazingly strong and we see that all of the time whether it's in the technology area whether it was Bitcoin a few years ago people just I have to own it >> and when it comes to the precious metals I do think you want to have a long-term position because of the things that we've talked about these big macroeconomic factors and changes going on in the world having said that uh we have clients that uh you know back In 2010 when I started Rocklink after being in the mutual fund industry uh for many years uh we started with about 15% allocation to precious metals and people said you know why am I in that space for a few years you know it didn't do much right and and then they've come to thank us we we've let that go up to about 20 25%. So when we have people that are in this space, I'm I was just going through accounts yesterday. We are trimming some of the positions where they just become very very large. For example, we had we had a position in sandstorm gold royalties and also royal gold and they merged and so all of a sudden people have 12 13% of their portfolio in one stock. Well, we're going to haul that back down to about 8% or so even though we love the combined position. So, if you're in the in in gold and silver and you start to become overweight, and I think uh again, you've got to target what your what your what your waiting should be in advance. We look at around 25% or so, then we'll start trimming back positions and uh and keep within that allocation uh fairly disciplinedly. I mean, we'll we'll let a few go if we think there's a lot more upside on on the stocks. If you're not in the space and you're coming and you're saying, "Wow, I've missed this. What's wrong with me?" And that's a lot of investors because >> and that's the hard thing right now I think because people are listening to oh this is a this is a new era this is a reset if you don't have diversification into metals you are at risk. So there's there's this I think a lot of fear driving that. >> Yeah. And it's it's it's it's really scary. I mean your neighbors made all this money and you haven't made any money and uh and so there's a lot of pressure on people. There's pressure on us as money managers. If someone comes in and they haven't been in the space what do we do? I mean, do we we believe in the space. So, what do we do? >> Well, what we're doing is we we'll we'll establish about 50% weights where we'd like to be over time. So, we will go in and we will establish positions in this market. And that's because we do believe in the long-term fundamentals and we don't believe we're going to be exceptional market timers. We have to be careful about thinking that we're smarter than we are. Then, we're going to dollar cost average over the next uh six to 12 months into the marketplace and take advantage of swings in the market. So my my my summary point would be establish a nice waiting because things are changing. I think the long-term fundamentals are pushing the metals forward, but don't put all of it in just at one time. Uh that's that's our advice. That could work out. Of course, maybe the market takes off and you leave a little money in the table, but I think you want to be prudent, be careful, and then dollar cost average. And then make sure you know what you're buying. Please, please, please. There are a lot of junior companies that can move uh spectacularly, but are they substantive companies? Make sure you're buying companies that are in good jurisdictions run by great people. They're well financed. You understand the business or buy an ETF that will give you exposure to a a variety of miners. I mean, you know, some sometimes we'll even recommend for junior companies uh if someone wants to get in the space, you know, Sprat's got an ETF in that space and so on. So be very careful because even if price of gold and silver goes up and you start getting into risky miners, you could lose your shirt even when even as the prices of these commodities go up. So again, you've got to know what you're buying. Be careful, talk to professionals uh who like the space, who understand the space and uh and pick off start with very high quality names. >> Yeah, that's great advice. And and we are going to put a link in the description if you want a free portfolio review and some help just wrapping your head around this area. uh you can hit the link in the description or go to wealthon.comfree to get uh someone from the team at Rocklink or one of the other adviserss to give you that. Um Jonathan, I I'm going to come back to the minor issue because I think that's really important. But just on that dollar cost averaging in, I think that because we've seen such big moves that people feel like they need to wait for a big correction down before they enter. So like why am I buying at the high? Um, is there any merit in that? If you if you're if you've missed this whole leg, should you be patient and wait for a pullback or are you better dollar cost averaging in because we don't know whether what what kind or whether we are going to see a pullback? >> Yeah, the best answer I can give to that because we don't know how the prices are going to move in the future, but we are biased on the upside is to get a position, establish a position now and then dollar cost average. I think if you wait to to pick the ultimate time to go in um you might never find that and you might be hesitant to go in and if the market does come off um is it going to fall further? Um should I wait until it goes down even more? These are these are questions that are very very difficult to deal with and that's why I think a systematic approach a disciplined approach. Um, again, if you believe the space is going to go much much higher, which we think the possibility again of of silver going higher than it is, as much as we've seen these large increases and gold going much higher also, um, then you've got to establish position and get in and then dollar cost average. That's our best call. Is that the perfect call? No, we don't know. Um, as I think Warren Buffett said many years ago, it's better to be approximately right rather than precisely wrong. And you have to be humble about the knowledge that you have and stick to the longer term fundamentals which I think are easier to discern and easier to understand um and uh and get your mind around. >> Yeah, I think that's one of the hardest things right now because we all have this information right in front of us. So we all kind of feel like we can time the market um but that that's what's so tricky. So you mentioned the miners. Explain for someone who may not be in this space and let's face it, it's a lot of people because you know this is not traditionally area that a lot of people had exposed to. Most people were um were in stocks and bonds and good for you if you already moved into the metal space. Uh but for some it's going to be new. So just talk a little bit about the this miners issue. Uh because I think a question some are asking is if I miss the rally in gold and silver itself, can I still get in on the miners? are they uh sort of the next hockey stick up? How has that performance been relative to the commodity itself? And then again, why do we have to be so careful in that space? >> Yeah, good good questions. A couple of things. Number one, um you could argue that the miners have not um generated the returns that are potentially in the tank based upon the rapid rise in the commodities. If you take if you take silver for example and if it stays in the 110 range let alone go to maybe 150 or 200 but just stays where it is now around the 100 110 range I mean you've got silver miners that uh you know their break even profit might be at uh $18$20 silver I mean you're talking about margins that are unprecedented uh the cash flow that these businesses can generate are substantial so we have seen a number of the miners go up a couple hundred% to 300% but their profits are going to go up much more than that. So there is a very strong argument Rick Rule has made this also just recently where he said he pulled back a little bit on the bullion and went into he's going into some of the silver miners that the profitability of the miners has not been manifested at all and in the next couple of quarters uh we're going to see some massive massive gains and that will probably spur on the miners. So all of that is to say yes um I think there are some opportunities in miners. Having said that, the risk is that any individual minor that you buy can have all sorts of problems emerge. They can have environmental problems. They can have government nationalize their assets. Um they can uh have missteps. Uh all of a sudden they're drilling and they're not finding the same quality uh or concentration of uh of precious metal, you know, per ton that they're digging and extracting and so forth. So there's all sorts of mining specific issues that can arise and can derail any particular minor. So if you are going to go into this space, you must go with a lot of knowledge. Uh follow very smart people. Buy an ETF, buy a number of them. Please don't just think you're going to buy one and that's going to solve your problem. It's not like buying, you know, Apple and going into the technology industry or something like that. This is a wild wild west. I think I think it was Rick Rule many years ago that said, you know, you could take um if you took all of the uh the junior miners that trade on the venture exchange in in in Toron in in Canada and uh probably only 10% of them are worth anything. The other 90% over time are worth nothing because they ultimately will not generate profits from their uh their mind. So be careful. It's a risky business. It's not an easy one. That's why in our business our largest positions have always been in the royalty companies which are basically you know they finance the mines but they're they're more investment bankers to the miners. So uh again I think there are uh greater opportunities going forward in the miners. They haven't responded as as dramatically as the underlying commodity. But careful please be careful. Talk to some professionals. Develop a strategy if you're going to go into miners. Yeah, I think that's such that's such good advice and it's something that I hear repeatedly from people who really understand the market and and we're talking about boots on the ground understand these minor visiting the sites and not just not just reading the you know the financials. So you really have to understand what's happening. >> We're we're there's there's six of us that does do the research here at at Rocklink and we're finance guys. We're not geologists and we do go out and visit some sites occasionally but not that often. And so that's why we look at jurisdiction, the people that run the company, making sure the people who run the company own a lot of the stock. They have their personal net worth there. They've already proven up some reserves. They have a strong balance sheet to execute uh you know, the next couple of years and they've got they're anchored with some really smart investors. I mean, there's a number of things you need to go through. Um and if you go through those, then of course you start to derisk some of your investments, but even then you need to have a diversified portfolio. >> Yeah. Absolutely. Absolutely. Uh so you mentioned before copper, nickel. What's the outlook for other parts of the commodity market? Uh are we going to see is this part of a sort of commodity super cycle or do we need to treat these different metals individually? >> I do believe and again I'm I'm I'm not a super commodity oriented person over my whole career. I've been in the business for 36 years and we made tons of money you know in tech and in uh in financial services and a whole host of different areas. consumer product companies. Um, more recently though, I think as you look at the debasement trade and concern over um the debt problems in the world and then de deg globalization where you've got east versus west emerging and so countries are trying to cover make sure they have all the resources they need without having to uh interact with their enemies or potential enemies and so on. Um and then you've got this digitization. You've got uh AI, the data centers, um the EVs, all all of these things are putting a large demand on power and the need for increased power production. >> That I don't think is going away. These are long-term trends we're not going to get away from. You could argue about how fast it's going to grow and and so forth. Uh that's that's that's a legitimate argument. But I think the longer term trends for digitization, robotics and uh and AI and data centers is here. What does that mean? It means there is going to be and I in my view a super cycle for some of these commodities. We need more copper. I mean the best estimates in the next 30 years by the professionals is we need another 70% production in copper. That's huge. I mean it takes 10 years maybe 8 10 years to develop a copper mine. It takes tens of billions of dollars. And so you can't turn copper on overnight. You can't turn nickel on. That's also important. Uh silver of course is important. This uh the the PGM metals, you know, the platinum platium metals are also very important. So, um we increasingly are looking at poly metallic mines as an opportunity to invest and poking around in that space. And again, we're trying to be very careful as we as we uh invest in this area. But uh um yeah, I think there will be a lot more demand in copper. Have we seen that to the full extent now? No. I think that's because there's softness in the global economy. The global economy is not rip roaring. I think the US is by far the strongest in terms of the global economy of any particular economy. But uh so copper hasn't responded as much as I think it's going to, but basically the longer term trends are very positive for a number of these commodities aside from just silver and and gold. >> Are there when we're talking about you people like to refer to it as like the pick pick and axes, right? like that if you're if you're looking for away from the metal itself, obviously there's a focus on the producers. Are there other aspects of the global economy or supply chain that also may benefit from that uh that commodity demand uh for for lack of a better way to explain it? Are there other parts of the food chain that could benefit or that you're looking at? Yeah. Well, when we think of AI in the data centers, uh you know, we are looking at and have investments in some of the uh the ones that are building these data centers. So, the Brookfield's in that involved in that business. Uh we have positions in Snyder Electric, uh Eaton, uh which are a lot of the equipment they're building also, but also the parts and and equipment that goes into the data centers. Um we have a smaller position in Prologess, which uh is managing some of these properties through REITs. Um, so there's different ways that you can cut and slice it rather than just going into Nvidia and buying uh uh chips or uh or into just the commodities. And I think the commodities are a legitimate way to play it. Uh what I get I get a little bit of a kick out of this that everybody talks about digital digital digital and virtual virtual virtual but the digital and virtual world is completely built on the physical world. And so I think people need a need a wakeup call once in a while. Uh again, I've been I've overseen some endowment funds at universities and the and the students will say, "Don't invest in oil and gas. Don't invest in the, you know, in mining industries. These are evil, evil, wicked industries." But they're all sitting on their computers. Um and so you can't run the computer industry and you can't do any of this stuff that we want to do going forward in terms of digitization without mining. Mining is the most important industry um underneath all of this. It's foundational. I think people are waking up to that reality that uh if you want to have all this you know chat gpt and grock and all of the AI then we need copper we need nickel we need water for that matter we need uh uranium power to power these things natural gas and so forth so that's why I think the commodity super cycle is probably alive uh is quite quite alive and quite strong coupled with the fact Maggie that we have way too much debt and our currencies cannot maintain purch purchasing power. We just have I mean China has got this massive debt and problem. Japan we're seeing the problems over there. Their bond markets, their currencies, lots of swings over there which is causing problems with the carried trade and interest rates that's going to come back and uh and hit us. So there's all of these things that are going on in the world and they all point to make sure you have a safe asset. Make sure that you have some hedge. Make sure that you're protected. Make sure you know what you're buying. Um it's it is a bit of a wild wild west and east out there on both sides, east and west. Yeah. And uh and so you you just have to be prepared and uh have quality. >> So what is the biggest risk that you're concerned about right now or that you're talking to clients about? >> It's the debt bubble. It's the debt bubble. I I that's to me that's the biggest risk is uh that we have created over the last 50 years or you could argue since you know we went off the we went off the partial gold standard in this early 70s um that we have amassed a level a level of debt which is unprecedented in human history truly unprecedented and that's because we've financialized and we have all these fancy derivatives and structures that have allowed us to to rack up debt at levels that is that are just simply not sustainable. I mean it's not possible. We have intractable problems when it comes to the debt. Um, even 10 years ago, I was just looking back in our our history as our company. 10 years ago, I did a whole series on YouTube for our investors on the debt storm, I called it. And uh, it just gets worse every year. And and people seem to just think that we can just keep piling on more and more debt. And I think that whole debasement trade is what's really fundamental to what's happening between gold and silver. There's all these other factors too, >> but but after all said and done, I think this whole monetary system we've had since Breton Woods is under tremendous tremendous stress. We heard that even uh from some of our friends over there in Davos, Ray Dallio and others speaking about uh you know this this ultimately has to be u reset in some way, shape or form. I don't know what that looks like, but when you hear that, you go for real collateral. You go for collateral. You want your you you want collateral. We want something that's real, tangible, and has proven itself over thousands of years. And I think again, I think this is one of the reasons for the precious metals being uh supported. >> Yeah, it's a new era we're in. Jonathan, we always appreciate you joining us and sharing your views. Uh this is, I think, an important time for people to plug back in and take a look at what their portfolio looks like and prepare for what's coming. >> Absolutely. I mean, with every crisis comes an opportunity. That's the way we have to look at it going forward, especially as investment managers. And I think that's the way everyone else should look at it. Every crisis brings an opportunity and just make sure that uh you're thinking through the opportunities wisely, carefully, and uh and have that long-term horizon in in perspective. >> Absolutely. And if you would like some help doing that, as we mentioned earlier, you can get a free portfolio review. Just hit the link in the description or go to wealthy.comfree. Jonathan, thanks so much. Thanks to all of you. We'll see you again soon. >> Great. Thanks, Maggie. If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hard Assets Alliance, at hardassetsalliance.com. That's hardassallalliance.com.
Gold & Silver Rally: Monetary System Resetting or Just Another Bubble? | Jonathan Wellum
Summary
Transcript
We have amassed a le a level of debt which is unprecedented in human history. Truly unprecedented. I think this whole monetary system we've had since Breton Woods is under tremendous tremendous stress. We want something that's real, tangible, and has proven itself over thousands of years. Hello and welcome to Wealthy. I'm Maggie Lake and joining me to discuss the outlook for Gold and Silver is Jonathan Wellm, the CEO and CIO at Rocklink. Hi, Jonathan. It's great to have you again. >> Yes, Maggie. Good to be back on with you and uh speak about such a interesting and hot topic. [laughter] >> Hot is hot is probably the word. I mean, we it's really been a historic run for these precious metals and I think a lot of people are wondering, does it feel sustainable or is this starting to look frothy? We were just talking before we came on about the huge swings we saw in silver just yesterday. I mean, how is this feel? How does this market feel to you? >> Yeah, it's a great question and we're getting that from clients and just what what is our position and so on. >> We we back up a little bit. We have to go back to why do we own the precious metals in the first place? Why have we built large positions in gold, silver and and some of the other uh metallic substances like copper, nickel and so on, but particularly the precious metals and that's because we're looking at a large large buildup in debt. Uh the whole debasement trade that's taking place um the demand for physical uh the you know the power demand for silver going forward in terms of AI data centers all of that. So when we look at the bigger picture, we want to be in this space for the long term despite the large price increases. Having said that, we're trying to warn clients and say, look, we've had a large move up uh in gold and silver, and we're starting to see a lot of volatility right now, which tells you there could be a consolidation, some price drops in the short term. Uh and from our perspective, that would be an opportunity to first of all re reallocate a little bit within the portfolio if someone's become overweight. uh in in in terms of precious metals, but also dollar cost average and pick off some opportunities for people who are uh coming into the market and haven't been in in the space already. But again, you want to take a longer term view on this. You just you don't want to be be, you know, suffering from fear of missing out, the whole FOMO thing, which we see all of the time come into the marketplace. Uh we do think this is a long-term systemic move. uh we think that we have intractable uh problems in terms of the the money supply uh value of fiat currencies del globalization all of these things that we can talk about these are longer term trends but that doesn't mean you can't get a lot of volatility and downward moves and bit bit of a correction in any of these precious metals at any time. So just be patient focus on the long-term fundamentals know what you own know why you own it and make sure you've got healthy allocations that uh are responsible and you're not overweight in any particular area. Yeah, I think this is I think this is such an important point and I and we all sort of nod our head and understand that, but when you're in the moment looking at your individual portfolio, those are those are things that are sometimes easier said than done. So, talk let's talk about the if you're in it already uh a little bit more specifically and then and then if you're not. So, if you're in it there, how do you there is a temptation to ride the winners, right? like how do you talk to clients about rebalancing and is it okay to leave profit on the table? I mean, it feels hard when something's experiencing these kinds of gains to actually rotate out of it. That seems counterintuitive to some people. It's very difficult and even for professionals uh the emotion is powerful and the pull to buy things that are going up is amazingly strong and we see that all of the time whether it's in the technology area whether it was Bitcoin a few years ago people just I have to own it >> and when it comes to the precious metals I do think you want to have a long-term position because of the things that we've talked about these big macroeconomic factors and changes going on in the world having said that uh we have clients that uh you know back In 2010 when I started Rocklink after being in the mutual fund industry uh for many years uh we started with about 15% allocation to precious metals and people said you know why am I in that space for a few years you know it didn't do much right and and then they've come to thank us we we've let that go up to about 20 25%. So when we have people that are in this space, I'm I was just going through accounts yesterday. We are trimming some of the positions where they just become very very large. For example, we had we had a position in sandstorm gold royalties and also royal gold and they merged and so all of a sudden people have 12 13% of their portfolio in one stock. Well, we're going to haul that back down to about 8% or so even though we love the combined position. So, if you're in the in in gold and silver and you start to become overweight, and I think uh again, you've got to target what your what your what your waiting should be in advance. We look at around 25% or so, then we'll start trimming back positions and uh and keep within that allocation uh fairly disciplinedly. I mean, we'll we'll let a few go if we think there's a lot more upside on on the stocks. If you're not in the space and you're coming and you're saying, "Wow, I've missed this. What's wrong with me?" And that's a lot of investors because >> and that's the hard thing right now I think because people are listening to oh this is a this is a new era this is a reset if you don't have diversification into metals you are at risk. So there's there's this I think a lot of fear driving that. >> Yeah. And it's it's it's it's really scary. I mean your neighbors made all this money and you haven't made any money and uh and so there's a lot of pressure on people. There's pressure on us as money managers. If someone comes in and they haven't been in the space what do we do? I mean, do we we believe in the space. So, what do we do? >> Well, what we're doing is we we'll we'll establish about 50% weights where we'd like to be over time. So, we will go in and we will establish positions in this market. And that's because we do believe in the long-term fundamentals and we don't believe we're going to be exceptional market timers. We have to be careful about thinking that we're smarter than we are. Then, we're going to dollar cost average over the next uh six to 12 months into the marketplace and take advantage of swings in the market. So my my my summary point would be establish a nice waiting because things are changing. I think the long-term fundamentals are pushing the metals forward, but don't put all of it in just at one time. Uh that's that's our advice. That could work out. Of course, maybe the market takes off and you leave a little money in the table, but I think you want to be prudent, be careful, and then dollar cost average. And then make sure you know what you're buying. Please, please, please. There are a lot of junior companies that can move uh spectacularly, but are they substantive companies? Make sure you're buying companies that are in good jurisdictions run by great people. They're well financed. You understand the business or buy an ETF that will give you exposure to a a variety of miners. I mean, you know, some sometimes we'll even recommend for junior companies uh if someone wants to get in the space, you know, Sprat's got an ETF in that space and so on. So be very careful because even if price of gold and silver goes up and you start getting into risky miners, you could lose your shirt even when even as the prices of these commodities go up. So again, you've got to know what you're buying. Be careful, talk to professionals uh who like the space, who understand the space and uh and pick off start with very high quality names. >> Yeah, that's great advice. And and we are going to put a link in the description if you want a free portfolio review and some help just wrapping your head around this area. uh you can hit the link in the description or go to wealthon.comfree to get uh someone from the team at Rocklink or one of the other adviserss to give you that. Um Jonathan, I I'm going to come back to the minor issue because I think that's really important. But just on that dollar cost averaging in, I think that because we've seen such big moves that people feel like they need to wait for a big correction down before they enter. So like why am I buying at the high? Um, is there any merit in that? If you if you're if you've missed this whole leg, should you be patient and wait for a pullback or are you better dollar cost averaging in because we don't know whether what what kind or whether we are going to see a pullback? >> Yeah, the best answer I can give to that because we don't know how the prices are going to move in the future, but we are biased on the upside is to get a position, establish a position now and then dollar cost average. I think if you wait to to pick the ultimate time to go in um you might never find that and you might be hesitant to go in and if the market does come off um is it going to fall further? Um should I wait until it goes down even more? These are these are questions that are very very difficult to deal with and that's why I think a systematic approach a disciplined approach. Um, again, if you believe the space is going to go much much higher, which we think the possibility again of of silver going higher than it is, as much as we've seen these large increases and gold going much higher also, um, then you've got to establish position and get in and then dollar cost average. That's our best call. Is that the perfect call? No, we don't know. Um, as I think Warren Buffett said many years ago, it's better to be approximately right rather than precisely wrong. And you have to be humble about the knowledge that you have and stick to the longer term fundamentals which I think are easier to discern and easier to understand um and uh and get your mind around. >> Yeah, I think that's one of the hardest things right now because we all have this information right in front of us. So we all kind of feel like we can time the market um but that that's what's so tricky. So you mentioned the miners. Explain for someone who may not be in this space and let's face it, it's a lot of people because you know this is not traditionally area that a lot of people had exposed to. Most people were um were in stocks and bonds and good for you if you already moved into the metal space. Uh but for some it's going to be new. So just talk a little bit about the this miners issue. Uh because I think a question some are asking is if I miss the rally in gold and silver itself, can I still get in on the miners? are they uh sort of the next hockey stick up? How has that performance been relative to the commodity itself? And then again, why do we have to be so careful in that space? >> Yeah, good good questions. A couple of things. Number one, um you could argue that the miners have not um generated the returns that are potentially in the tank based upon the rapid rise in the commodities. If you take if you take silver for example and if it stays in the 110 range let alone go to maybe 150 or 200 but just stays where it is now around the 100 110 range I mean you've got silver miners that uh you know their break even profit might be at uh $18$20 silver I mean you're talking about margins that are unprecedented uh the cash flow that these businesses can generate are substantial so we have seen a number of the miners go up a couple hundred% to 300% but their profits are going to go up much more than that. So there is a very strong argument Rick Rule has made this also just recently where he said he pulled back a little bit on the bullion and went into he's going into some of the silver miners that the profitability of the miners has not been manifested at all and in the next couple of quarters uh we're going to see some massive massive gains and that will probably spur on the miners. So all of that is to say yes um I think there are some opportunities in miners. Having said that, the risk is that any individual minor that you buy can have all sorts of problems emerge. They can have environmental problems. They can have government nationalize their assets. Um they can uh have missteps. Uh all of a sudden they're drilling and they're not finding the same quality uh or concentration of uh of precious metal, you know, per ton that they're digging and extracting and so forth. So there's all sorts of mining specific issues that can arise and can derail any particular minor. So if you are going to go into this space, you must go with a lot of knowledge. Uh follow very smart people. Buy an ETF, buy a number of them. Please don't just think you're going to buy one and that's going to solve your problem. It's not like buying, you know, Apple and going into the technology industry or something like that. This is a wild wild west. I think I think it was Rick Rule many years ago that said, you know, you could take um if you took all of the uh the junior miners that trade on the venture exchange in in in Toron in in Canada and uh probably only 10% of them are worth anything. The other 90% over time are worth nothing because they ultimately will not generate profits from their uh their mind. So be careful. It's a risky business. It's not an easy one. That's why in our business our largest positions have always been in the royalty companies which are basically you know they finance the mines but they're they're more investment bankers to the miners. So uh again I think there are uh greater opportunities going forward in the miners. They haven't responded as as dramatically as the underlying commodity. But careful please be careful. Talk to some professionals. Develop a strategy if you're going to go into miners. Yeah, I think that's such that's such good advice and it's something that I hear repeatedly from people who really understand the market and and we're talking about boots on the ground understand these minor visiting the sites and not just not just reading the you know the financials. So you really have to understand what's happening. >> We're we're there's there's six of us that does do the research here at at Rocklink and we're finance guys. We're not geologists and we do go out and visit some sites occasionally but not that often. And so that's why we look at jurisdiction, the people that run the company, making sure the people who run the company own a lot of the stock. They have their personal net worth there. They've already proven up some reserves. They have a strong balance sheet to execute uh you know, the next couple of years and they've got they're anchored with some really smart investors. I mean, there's a number of things you need to go through. Um and if you go through those, then of course you start to derisk some of your investments, but even then you need to have a diversified portfolio. >> Yeah. Absolutely. Absolutely. Uh so you mentioned before copper, nickel. What's the outlook for other parts of the commodity market? Uh are we going to see is this part of a sort of commodity super cycle or do we need to treat these different metals individually? >> I do believe and again I'm I'm I'm not a super commodity oriented person over my whole career. I've been in the business for 36 years and we made tons of money you know in tech and in uh in financial services and a whole host of different areas. consumer product companies. Um, more recently though, I think as you look at the debasement trade and concern over um the debt problems in the world and then de deg globalization where you've got east versus west emerging and so countries are trying to cover make sure they have all the resources they need without having to uh interact with their enemies or potential enemies and so on. Um and then you've got this digitization. You've got uh AI, the data centers, um the EVs, all all of these things are putting a large demand on power and the need for increased power production. >> That I don't think is going away. These are long-term trends we're not going to get away from. You could argue about how fast it's going to grow and and so forth. Uh that's that's that's a legitimate argument. But I think the longer term trends for digitization, robotics and uh and AI and data centers is here. What does that mean? It means there is going to be and I in my view a super cycle for some of these commodities. We need more copper. I mean the best estimates in the next 30 years by the professionals is we need another 70% production in copper. That's huge. I mean it takes 10 years maybe 8 10 years to develop a copper mine. It takes tens of billions of dollars. And so you can't turn copper on overnight. You can't turn nickel on. That's also important. Uh silver of course is important. This uh the the PGM metals, you know, the platinum platium metals are also very important. So, um we increasingly are looking at poly metallic mines as an opportunity to invest and poking around in that space. And again, we're trying to be very careful as we as we uh invest in this area. But uh um yeah, I think there will be a lot more demand in copper. Have we seen that to the full extent now? No. I think that's because there's softness in the global economy. The global economy is not rip roaring. I think the US is by far the strongest in terms of the global economy of any particular economy. But uh so copper hasn't responded as much as I think it's going to, but basically the longer term trends are very positive for a number of these commodities aside from just silver and and gold. >> Are there when we're talking about you people like to refer to it as like the pick pick and axes, right? like that if you're if you're looking for away from the metal itself, obviously there's a focus on the producers. Are there other aspects of the global economy or supply chain that also may benefit from that uh that commodity demand uh for for lack of a better way to explain it? Are there other parts of the food chain that could benefit or that you're looking at? Yeah. Well, when we think of AI in the data centers, uh you know, we are looking at and have investments in some of the uh the ones that are building these data centers. So, the Brookfield's in that involved in that business. Uh we have positions in Snyder Electric, uh Eaton, uh which are a lot of the equipment they're building also, but also the parts and and equipment that goes into the data centers. Um we have a smaller position in Prologess, which uh is managing some of these properties through REITs. Um, so there's different ways that you can cut and slice it rather than just going into Nvidia and buying uh uh chips or uh or into just the commodities. And I think the commodities are a legitimate way to play it. Uh what I get I get a little bit of a kick out of this that everybody talks about digital digital digital and virtual virtual virtual but the digital and virtual world is completely built on the physical world. And so I think people need a need a wakeup call once in a while. Uh again, I've been I've overseen some endowment funds at universities and the and the students will say, "Don't invest in oil and gas. Don't invest in the, you know, in mining industries. These are evil, evil, wicked industries." But they're all sitting on their computers. Um and so you can't run the computer industry and you can't do any of this stuff that we want to do going forward in terms of digitization without mining. Mining is the most important industry um underneath all of this. It's foundational. I think people are waking up to that reality that uh if you want to have all this you know chat gpt and grock and all of the AI then we need copper we need nickel we need water for that matter we need uh uranium power to power these things natural gas and so forth so that's why I think the commodity super cycle is probably alive uh is quite quite alive and quite strong coupled with the fact Maggie that we have way too much debt and our currencies cannot maintain purch purchasing power. We just have I mean China has got this massive debt and problem. Japan we're seeing the problems over there. Their bond markets, their currencies, lots of swings over there which is causing problems with the carried trade and interest rates that's going to come back and uh and hit us. So there's all of these things that are going on in the world and they all point to make sure you have a safe asset. Make sure that you have some hedge. Make sure that you're protected. Make sure you know what you're buying. Um it's it is a bit of a wild wild west and east out there on both sides, east and west. Yeah. And uh and so you you just have to be prepared and uh have quality. >> So what is the biggest risk that you're concerned about right now or that you're talking to clients about? >> It's the debt bubble. It's the debt bubble. I I that's to me that's the biggest risk is uh that we have created over the last 50 years or you could argue since you know we went off the we went off the partial gold standard in this early 70s um that we have amassed a level a level of debt which is unprecedented in human history truly unprecedented and that's because we've financialized and we have all these fancy derivatives and structures that have allowed us to to rack up debt at levels that is that are just simply not sustainable. I mean it's not possible. We have intractable problems when it comes to the debt. Um, even 10 years ago, I was just looking back in our our history as our company. 10 years ago, I did a whole series on YouTube for our investors on the debt storm, I called it. And uh, it just gets worse every year. And and people seem to just think that we can just keep piling on more and more debt. And I think that whole debasement trade is what's really fundamental to what's happening between gold and silver. There's all these other factors too, >> but but after all said and done, I think this whole monetary system we've had since Breton Woods is under tremendous tremendous stress. We heard that even uh from some of our friends over there in Davos, Ray Dallio and others speaking about uh you know this this ultimately has to be u reset in some way, shape or form. I don't know what that looks like, but when you hear that, you go for real collateral. You go for collateral. You want your you you want collateral. We want something that's real, tangible, and has proven itself over thousands of years. And I think again, I think this is one of the reasons for the precious metals being uh supported. >> Yeah, it's a new era we're in. Jonathan, we always appreciate you joining us and sharing your views. Uh this is, I think, an important time for people to plug back in and take a look at what their portfolio looks like and prepare for what's coming. >> Absolutely. I mean, with every crisis comes an opportunity. That's the way we have to look at it going forward, especially as investment managers. And I think that's the way everyone else should look at it. Every crisis brings an opportunity and just make sure that uh you're thinking through the opportunities wisely, carefully, and uh and have that long-term horizon in in perspective. >> Absolutely. And if you would like some help doing that, as we mentioned earlier, you can get a free portfolio review. Just hit the link in the description or go to wealthy.comfree. Jonathan, thanks so much. Thanks to all of you. We'll see you again soon. >> Great. Thanks, Maggie. If you're looking for a simple, secure way to invest and own physical gold and silver, visit our sister company, Hard Assets Alliance, at hardassetsalliance.com. That's hardassallalliance.com.