Runaway Debt & Deficits + AI Buildout = HUGE Demand For Hard Assets | Jonathan Wellum
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YOU CAN STILL GET THE ‘LAST CHANCE TO SAVE’ PRICE DISCOUNT FOR THE THOUGHTFUL MONEY FALL …
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If you look at the debt to GDP over just over the last five years in UK, in Germany, in France, in Italy, in Japan, it is skyrocketed. It just skyrocketed, Adam. It's going exactly the wrong way. The United States also, of course, has been going the wrong way. So, I'm and and we're in Canada and we having no economic growth. In fact, we have seen the shrinkage of GDP per capita because we've increasing um so much immigration into our country and the GDP isn't growing. So on a per capita basis is shrinking. [Music] >> Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Uh very pleased to be sitting down today with Jonathan Wellum. Uh the head of Rocklink Investment Partners. Uh this is one of the financial advisory firms endorsed by Thoughtful Money. Specifically, they are endorsed Canadian provider. Jonathan, how you doing today? >> Doing very well. It's exciting day. We've uh got a new record close on the Komox gold over $4,000 I think the last I looked just right before four. >> And Jonathan um I know that gold futures have crossed 4,000 an ounce. Has spot itself crossed 4,000 yet? Do you know? >> Spot was trading just a few moments ago at 3980. 39.80. So very close up up about $20 today. Uh again just before the close. >> All right, spinning distance. Well, look um folks, we're going to talk about a lot of things today. Uh Jonathan was very kind enough uh to drop what he was doing and come record with me today. Uh we were it's a it's a Wednesday. This was supposed to be one of Stephanie Pomboy's appearances. Um she's had a couple of curve balls that she's been having to deal with. She feels terrible about having to push out her return to the channel, but she's hoping she's going to be able to make it next week. So anyways, just um wanted to let you know what's up with her, but thankfully Jonathan was willing to step in to the void here and fill it for us. So, first off, let's let's start with the precious metals, Jonathan. So, um first off, kudos to you because uh you have been uh quite a supporter of owning precious metals in your portfolio for a variety of reasons. Um some of them defensive, but I think much over the past year plus, you'd said that you thought there was a lot of opportunity for precious metals to rise. Uh and they have $4,000 an ounce for gold. Uh that is a phenomenal year so far for gold. I want to say it's up 45% so far year to date. >> Yeah, it is. Well, as of the end of September, it was up about 41, but now I think it's about 46% or so year to date, which is phenomenal. I think it's the best return since 1979 in terms of an annual return. So, that's uh that's that is that is a great return. No question about that. >> No question about that. And of course, that's just for gold. Now, silver has had an even better performance so far this year. Uh and the miners have done phenomenally well. Uh, I haven't looked at GDXJ um this week, but looking at it about a week ago, it was up well over 100% year to date. Um, and I know that the miners have been a big part of your um uh investment strategy is having a material percentage of the Rocklane portfolio in a couple of of really good high-quality miners. I've got to imagine that has paid off very well for you so far this year. >> Yeah, it's it's it's been amazing as you would expect. Agnigo Eagle has been really a major holding now for a number of years just simply because of the quality of the management, the quality of the assets, the political stability in terms of uh where they're located. And uh it's quite interesting um if you actually look at a company like Agniko Eagle and you look at the free cash flow yield um currently uh even though the price of the stock has gone you know it's it's tripled over the last couple of years uh it's still trading the free cash flow yield at uh at a higher rate than it was uh three four years ago. And um if you if you actually factor in um maybe 4,500 gold, 50 silver, which isn't crazy um over the next year if you are bullish on the on the metals um you you can you can you can really justify like a 9 10% free cash flow yield in some of these stocks. What it's telling you is that they're incredibly profitable that uh with the increase in gold going uh you know up a couple thousand dollars here that's all going to bottom line to really well-run companies. you know, the costs have really been maintained by some of these firms and the uh the free cash flow growth is absolutely astounding uh Adam. So, we look at some of these companies and um you know, they're probably trading at uh similar net asset values even after they've doubled um than they were before simply because the price of the commodities have gone up so much. So, okay, help me understand then, Jonathan. Um, does does that mean that despite as well as the complex has performed year-to- date, you still think it's it's I don't want to know if I should use the word undervalued, but but that um there's still plenty of potential for appreciation here because they're not overvalued at least. >> Well, what's happened? Yeah. I mean, what I would say is the following. If you believe that gold will maintain its value in the $4,000 range and even continue to sneak up, not at the same rate that we've seen, but continue to edge up because of the global uh problems, economic problems, debt problems, all of the things that uh we can rattle off, which is why you want to own gold, concern over fiat currency and so on. Then the valuations today on some of these companies um is uh no different than it was a couple of years ago. And so, yeah, >> which was believed to be pretty undervalued, right? >> Yeah. Now, again, that that was anticipating a, you know, a larger rise in the price of gold. But if you can buy some of these great companies at 10 11% free cash flow yields next year based upon say $4,500 gold, um, that's not that's not overly expensive, especially again if you believe that fiat currency is going to be under under uh pressure. If you believe that $350 trillion dollars of global debt is too large, if you think a $2 trillion deficit, you know, in terms of the US deficit and 37 trillion debt is way too large and all of those things which haven't gone away, um then um and you think gold will continue to, you know, edge higher as a protection against your your purchasing power erosion because of inflation, then yeah, I think that some of these stocks are are continuing to be very good value. >> All right. So you had some ifs there and probably the biggest one was if you still think that fiat currencies are going to come under pressure. Well, let's ask the question, okay, what would what would make fiat currencies not come under pressure? Um, you mentioned the debt. The debts the debt's a big issue, but it is less of an issue if economic growth really picks up. I I talked to a lot of people. There are some now that are expecting the economy might be a little bit more robust this year than it is this year, but nobody at least that I talked to is predicting like a boom ahead, right? So, probably unlikely that we're going to have economic growth like materially boom from here in the next immediate year or two. uh then the other thing that would help uh fiat currencies would be if the deficit spending got slashed and I don't see that happening anywhere around the world even in America where we had Doge and it was a big part of the current administration's um campaign platform largely they've basically said we're we're going to take care of it we're going to take care of it down the road right so the the one big beautiful bill basically had a ton of spending provisions now with the hope or intent that yeah 3 four years out maybe some fiscal discipline comes into the picture but I know there's a lot of people that still have a lot of you know understandable doubt around that so you know the whole lynald and nothing stops this train we're in the situation right now where the the central planners just have to keep running bigger and bigger deficits so again I don't see relief coming on the GDP growth side nor do I see uh relief coming on the uh deficit reduction side is there any other reason to to think that Oh, fiat currencies might actually have a a rebound here in terms of their value. >> Yeah, when I when I give some of those conditions, uh I'm just giving them just to make sure that people understand uh you know uh what could reverse. I don't think those will reverse. I agree with you 100%. We are bullish on gold and think it will continue to go up. But I'm I'm a money manager. I'm also an investment manager. I have to manage the risk. I have to manage the expectations of clients and uh do reasonable asset allocation so that we're protecting people. Everyone's got different risk tolerances, but when I look at the current economic environment around the world, it is not pretty. I mean, you go over to Europe and there's there's virtually no, you know, very little growth over in Europe. We just see we just had the third collapse of the French government in the last 12 months. We've got social problems in all of these countries in Europe. Uh Germany's industrial production is collapsing. Um they're going to have to reverse their green policies. Uh energy costs are way too high for the manufacturing. Um, >> they all have to pay more for their defense now. >> Yes. And and some of these people are saying they're going to pay up to 5% of GDP of defense, which I don't where are they going to get that money? I mean, Germany now is starting to borrow at a record rate. Um, and so what you're seeing is these comp countries are actually going further into debt. I mean I ran some numbers uh just looking around here um on the debt to GDP and u if you look at the debt to GDP over just over the last five years in UK in Germany in France in Italy in Japan it is skyrocketed it just skyrocketed Adam it's going exactly the wrong way the United States also of course has been going the wrong way so I'm and and we're in Canada and we having no economic growth in fact we have seen a shrinkage of GDP per capita because we've increasing u so much immigration into our country and the GDP isn't growing so on a per capita basis it's shrinking so I think the United States currently is an anomaly when it comes to economic growth and that is because again you are running large deficits tax policy has been more favorable regulations are going down Trump is attracting a lot of capital to the country I can say that being a Canadian because it's leaving Canada and going to the US and so I think that if you're in the US you're actually seeing a much more robust economy. Um lower unemployment 4%, we've got 7% up here in Canada and so but so you know my my point in terms of the gold is that uh no around the world you're not seeing great economic growth. The US is quite unique but the debts just continue to pile up and so I think that's going to be very favorable in terms of gold going forward. and uh the policies of uh the green agenda um the increasing costs of energy around the world um those all have to reverse before we're going to see a change in the price of gold um we're going to see a continual erosion in fiat currency think it's it's irreversible at this point until we until we uh degrade the currencies quite a bit >> okay and that's sort of where I was going from here which is your thesis about gold's continue to rise from here was okay one of the things that could derail it is if fiat currencies suddenly just started getting a lot more hail and hearty but for the reasons you just mentioned that does not seem to be a high profitability event um is a is a diplomatic way of putting it. So if if indeed uh prices of gold and silver still continue to hang out where they are, continue to go up from here even at a lower rate, you're saying that the mining company mining shares should continue performing really nicely. And kind of where I'm going with this, Jonathan, is in our previous discussions, we've talked about how a decade ago there was not much interest in gold. And then several years ago, the central banks started buying it, beginning to really eventually see it as a as a preferential holding to US treasuries, which is a pretty pretty big and seismic shift in and of itself. Along that path, we saw the the eastern investor wake up and say, "Yeah, I'll I'll buy basically as much gold from the West as you're willing to sell it to us at today's prices." We've been we've been wondering, okay, when is the Western investor going to wake up in this? And you and I have talked about how Wall Street is really not a huge fan of gold, but at the end of the day, Wall Street is a much bigger fan of momentum and making profits. And when a sector starts catching fire enough, doesn't matter what people's ideologies are, they just want to chase, you know, the momentum that's going on there. Are we seeing that yet in the precious metal space? Is part of gold's rise and part of the rise of the miners here? Is that Western capital really starting to flow into the space or is this just happening organically and we still have yet to have that big tailwind of the western investor pile in here? I don't think that uh the average investor has become uh really increased the percentage of gold in any material way. Um again, according to individuals who have been looking at this, they still say it's on average about a half a percent of someone's portfolio. Um so it's quite small. And when you look at the total gold space in terms of gold, you know, companies and royalty companies, you're probably talking about uh maybe $600 billion in terms of market cap. Um that's that's really just a little over what's that 10 12% of Nvidia. I mean it's it's really quite small and it's quite shocking how how small it actually is. And so I do think there's a lot more uh room to go. Now we are getting calls from you know this is antidotal. We're getting calls from more retail investors saying you know should I be buying more gold? Should I you be increasing my portfolio? And we hear that you know clearly that's on the street. People are starting to talk about it more. I was listening to an interview with Pierre Lassan just a couple about a week or so ago and he said that he was doing an institutional run which he hadn't done for 10 years in Europe for a company that he's promoting and he said that only 10% of the institutional managers had any exposure to gold that he was talking to in Europe and that's in Europe and so no I think it is underweighted underowned underlod and uh people continue to pound into the AI stocks and um and the the Magnificent 7 interesting enough I I had one of my guys at the office just run some quick numbers on, you know, year-to- date gold if you started at $10,000, just started at $10,000, gold would be trading at the end of September about 14,100. Um, the Royal Six, we call it would be the six biggest royal royalty companies. They'd be about uh 18,000, so up about 80%. And the Mag 7 are actually up uh to 11,200, up about 11 11 and a quarter percent. Um, if you take Nvidia out of there, only $11,000. So, um, they haven't performed as well this year. If you take a video out of some of the numbers, even going back three years, um, you've got, uh, the royal six, uh, royalty companies, the top six, you know, Franco Nevada, wheat and precious metals, Royal Gold, Sandstorm, Cisco, O, and, um, Triple Flag, they've actually outperformed a lot of these tech companies. I don't think the market realizes that. And if you look at some of the mining companies, I think they've got a lot more room to go. They they've done well this year, but they've got a lot more upside. So, one of the things two of the things that have sort of hampered Wall Street from investing in this sector of late, um, one is its size, right? It's just a small market and and big institutional funds like to look for places where they can put lots of money. Uh, so they just tend to look at the bigger sectors. Um, and obviously, you know, the tech sector over the past bunch of years has had all the glory, and that's where they've been focusing on their attention. But also, I think over the past 10 plus years, and you would know this better than I, the the firms have kind of gotten rid of a lot of their mining analysts, right? There's just there's just not anybody at these companies that really follow this space. So, even if they're kind of interested, they don't have an in-house expert to go to and say, "Well, which of the ones are best positioned or what?" So there's just a lot more, I think, opacity and friction preventing Wall Street from getting in here. Do you see that as being a permanent barrier or do you think at some point Wall Street's just going to say, "Look, we got to get in this game. These things are doing too well." >> Well, Wall Street will chase the profits. And so I do think that there's going to be more coverage and people are will step into. I mean, Goldman um is is pretty active in the space, JP Morgan. Um so you are seeing reports coming out uh from those companies and uh some others. Um but it is a it's still a small space. So they'll look at u they'll look at the economic viability of covering the space. But um like anything if it continues to go if if this goes for another number of years and again not at the same rate we saw this year but if it continues to uh go higher gold simply because fiat currencies are under massive pressure as we've talked about that's not going to go away. People will look for protection. They're going to look for a hedge. um they're seeing that also in uh you know the cryptocurrencies and bitcoin and so on um then I think you will get more people coming into the space and following it. The other issue that um has been a big one is just index investing and you don't have many of these gold companies in the index. You really just pneumon um and so uh you know they're not being picked up by the these massive flows that are going into um the the index products and some of the ETFs. >> Yeah, that's right. They're they're sort of left out of that game. So, I I think you've answered the question, but I I just want to put it fully on the table. You know, is is there anything about this mining sector that might preclude this expected title wave, if you will, of Wall Street capital flowing into the space at some point um because of it's so small or so opaque or whatever. And I guess what I've heard from you is is no, if if it keeps performing like this, eventually Wall Street Capital will find its way there. But I just want to make sure. >> Yeah. And you don't need to have every firm following it. So there might be some might not be comprehensively followed, but if you just have a couple of the major players, that'll be enough to shift money into this space and really ratchet up some of the uh some of the prices very quickly. So uh that's what I would anticipate. Even if it's not broadly covered, it's going to be impossible uh for some of the major players not to continue covering it and covering it more in depth. And um so I that's I again I would I would see that the ability and the probability of a large uptick and uh over the next couple of years is still there. Yeah. >> Okay. Um so I've asked you this variance of this question in the past but you know given the small size of this space um there is uh a question which I'll ask you um so I'll put on the table right now which is about sober is is sober in any way part of is it an AI play in any way and the reason why I asked that is is you know sober's as far as I know it's the most conductive element out there, the most conductive metal out there. We're going to need to be dramatically expanding our electrical grid so that we can build a ton of data centers. There's presumably going to be silver used in in, you know, a good chunk of that. I've asked this question to other precious metals guys before, Jonathan, just so you know, and they've said maybe copper is probably the better bet better bet, which I agree with. There's a lot of copper that's going to be needed for that. But but where I'm going with this is there aren't that many pure play silver miners out there, right? So I just looked up the market cap for um first Majestic, which is one of the largest silver more or less pure play silver miners out there. It's market cap 6 billion. I mean, why wouldn't a company say like, you know, an Nvidia or, you know, somebody who's just got gobs of cash, big uh big cash position on their balance sheet and just say, you know what, I'm going to buy that company. I'm going to lock up that supply so at least I have it if I need it commercially, but also if hey, if if this thing's got a big tailwind at it, that could be a good, you know, asset on the books for the company. Um, why or just a billionaire? I mean, there are billionaires out there right now that have 50 billion, you know, more. Why don't they just buy a ton of silver sober or whatever and just take a big chunk of it off the market or buy some of these players? >> Yeah, I mean I'm I think those are all possibilities, Adam. That's that is the reality. Um, I'm I'm going to be doing a presentation um in in a day or two up in our capital city um in Ottawa in Canada talking about uh just this resource boom as a result of AI digitization, robotics, EV, all of these things which is really causing a large uptick in energy demand. And according to my research, and I've gone into, you know, this fair fair detail, they're talking in the next 25 30 years, we're going to need about a 100% increase in the silver um content. So that's fairly substantial. I mean copper you're looking at about 80% which is in 20 years which is very hard to come by. So I think silver copper yeah there will be a large increase in the demand as a result again if these trends continue uh because of AI robotics digitization um EVs batteries all of these things silver is going to be very important and as as you know uh it's pretty tight market now it's very tight market at this point I mean some people say again there's been uh not enough production really to meet the demand both manufacturing and for the precious metals uh monetary side of it so I think it is incredibly strategic IC investment on two fronts both both in terms of uh the green know technology and and uh and for energy and also for as a monetary uh unit and so I think it's quite possible you're going to see strategic investments in these companies we're seeing that in other metals the US government I was bought into trilogy I mean they're trying to get rare earth so I think yeah this precedent is being set and uh this would not surprise me at all uh to see strategic investments in some of these companies and they are as you say relative to the market cap of some of these AI companies, it's nothing. It's it's like it's like it's it's uh it's a drop in the bucket and uh and these companies are, you know, create a lot of cash flow. So, yeah, I would expect um potentially more of that. And copper is another one. I mean I mean it's it's growing 3 4% a year and as you know to develop a copper mine it takes 10 years plus it takes tens of billions of dollars and there's not very many places where you can find these massive deposits. Um and uh in some cases as we saw in Panama Cobra Cobra mine there it was actually shut down right at the time it started to produce but uh even there there's so much pressure to get that open uh because uh the government needs that revenue needs that money and we need the copper. So I think yeah some of these things could materialize over the next year in a couple years uh because of the increase in demand and the strategic nature of some of these metals. >> Okay. So, um, there was a there was a billionaire, uh, who, um, Twitter was a buzz with this or X was a buzz with this a few weeks ago. Um, David Baitman, I think was his name. Um, and he, um, he bought, I would say maybe a billion dollars worth of of uh, of silver. I don't know if it was quite that much, but it was a lot. Um, definitely closer to a billion than not. Um and and and to me that was sort of evidence of what we've been talking about which is hey why don't some of these guys just just buy a ton of it and there's not that much on a relative basis uh above ground silver and so you could really take a lot of supply off the market right away now that might be a reason why silver is continuing to have the run that it's having but I know I'm asking you to guess here but but what do you think would happen to the price of silver if say an Nvidia uh or an Apple um just bought First Majestic. What do you think would happen the next day? Where I'm going with this is like not only would it be potentially a good strategic asset for you to have, but you might be able to like double your money in in a week. >> Freaks out. Yeah. >> Yeah. I mean I mean look, I think the longer term trends mean that silver go triple digit anyway. Um but uh I think it would go triple digit digit very quickly which is at this point it would be a double uh very quickly up into the hundreds of dollars. Um and that's not crazy thinking. That's I think very reasonable. You remember Warren Buffett he he bought a lot of silver back was like 9798. I remember going down to the annual meetings people said what the dickens is he doing buying silver. Um but he was told later on he did say that the uh the US Treasury told him to get off of it. They tapped him on the shoulder. Yeah, they they gave him a little tap and say, "Hey, Warren, you know, uh we like you and you like to get along with us uh a little bit better than get off that silver." And so that was the strategic he saw that he saw how tight the market is. And so if there, you know, demand comes in um to the marketplace and it's going to because we're going to need more and more silver and again the silver production is not growing that quickly. Um again, you talk about First Majestic and Keith Nummire there. I mean, he's he'll rattle off all the all the stats on silver and it's a tight market. Um, and demand's going up. So, and it's in countries which, you know, there's there's they're always fighting to get it out of the ground. There's issues in Mexico, different places. It's not it's not in easy places either. Um, so yeah, no, I think there's a lot of upside potential um and silver and we maintain uh some silver exposure in a number of the companies we own and also in some of the royalty businesses, they have exposure to the silver. Yeah. >> Um, all right. Well, just parting point on this. Um I think the metals that are essential to the buildout of um America's or actually most countries um the rebuilding of uh their energy their electrical production capacity have an uncommon tailwind behind them. And the reason for that is um when you compare our electrical production capacity to China's they are leaving us in the dust. Uh there's a chart I'll try to find it. uh to put it up here when I edit this. Jonathan, I've showed it before, but um the US's um electrical production capacity has basically been flatlined for the past couple decades. China has super invested in this space. They're now way ahead of us and their our line is like a horizontal flatline. Their line now is almost like a vertical flat a vertical line. Um and um if we want to win the AI race, which I think we have all said is a sovereign um existential priority for the US um we have to be a winner in providing plentiful cheap electrons to the AI data centers. Um so we could we could even go through I think a big bust of the AI bubble market value-wise where the market says you know what we price these stocks way too much. we're going to cut them in half by 50 plus percent or whatever. You could have kind of a wipeout like that like the dot era. Even if we do, and that would be very painful marketwise, I don't think that's going to stop the buildout of the electrical grid because I think that that is market independent. I think that is the US and other countries too, but the US in particular saying we must win this just like we had to win the nuclear race. So, we're going to do whatever it takes. And that buildout is just going to place increasing amounts of demand on these metals. Copper uh you probably know some other ones more than I do that will be >> nickel, cobalt, lithium. There's a whole host of uh host of them really a good a large assortment of them at the end of the day. Um some some more difficult to acquire than others, >> right? So, um I I I think as long as as winning AI remains as important a sovereign strategic objective as say winning the nuclear arms race, um these things are just going to have I mean almost infinite demand over the next decade or so for them. And you know, as Rick Rule has been warning us about a lot with a lot of commodities is is no matter what happens going forward, demand goes up, demand stays flat. We have underinvested a lot in the capex in these industries and in building the mines, doing the explorations and stuff like that. So that we could very a very high probability of some of these key resources be entering into shortages. Hopefully those will be you know uh those shortages will be cleared up over time but that may take years once they manifest to your point because you can't just turn on a mine like that. It takes takes a good while. Um, so anyways, it just it seems like the investment thesis behind the metals related to the electrical buildout play uh seems to be one that we can have pretty good confidence in. Do you do you feel similarly? >> No, I agree 100%. The underinvesting has been I think largely due again to this whole green um ideology that we've seen across the world. And uh I mean you see it with Germany. They they shut down their nuclear facilities. Now they've got to get them back up again. and they think they're going to rely just on solar and wind and so forth. It's it's not doable in Canada. I mean, again, I'm go back to my own country. What we've done is we've bypassed um best estimates about $700 billion of capital that should have been invested in the resource sector over the last 10 years alone. That's like a trillion and a half of GDP. Um and so this underinvestment in the resource sector isn't just in Canada. It's just not over in Europe. Um it's really been around much of the world with the exception of course of India and China and Russia. they continue to go full steam ahead and in the US um it was under a lot of pressure again in the Obama years and of course under Biden. Um now Trump is reversing that and he's putting on a big push to get the resources developed. Drill drill drill drill baby drill um get the rare earths um make sure you're not vulnerable and I think that is going to help kick up you know some of the some of the production in some of these areas but as you know it takes years. It takes years and um United States can't do all that on its own. So other countries are going to have to get their act together also or they're going to fall very far behind. If you look at the data centers, I mean there's about 12,000 data centers uh in the world right now. The US has about uh 40% 45% of them and they anticipate again these are estimates but you know it gives us a direction to go anyway. By 2050, we're going to have 90,000 of these in the world. And they're estimating because of the US leadership and the place to, you know, the best place to put money and attract capital that you guys will have like 55% or more, 60% of those uh data centers. And that would be phenomenal, but you're going to have to put trillions into the grid. No question about it. And that's why I think a um Google, Amazon, and um Microsoft and so forth are doing these deals uh to make sure that they're securing the energy as they build these facilities out. Yeah. So >> yeah, and to my point in my point like I I just don't understand why they don't do deals to secure the mining supply and just like literally buy something. >> That's probably coming, Adam. I that's probably coming. I I again I think you you've hit on something there. And if it's if it's going to be profitable and it's strategic and it's not going to be very expensive for these companies to swallow some of these productions and uh secure it, it'll happen. It'll happen. >> Okay. So, um obviously you guys have had your positions in the precious metals space for a while. Um are you also positioning for some of these trends that we're talking about here? Whether it's AI, whether it's the metals demand on the data center buildout, uh etc. I mean are these things that you are looking at in your portfolio construction? >> Yeah, we we try to get we try to get exposure to copper. I mean copper I think a lot of people have talked about that. We're not we're not geniuses when it comes to that either. I think copper is incredibly strategic. Very very hard to come by though in terms of growing it. So copper we also get exposure to some of the companies building the AI facilities. So we have some exposure to Brookfield. They have some of the they're building some of these um data centers. uh Snyder Electric which is uh again also building some of the data centers and contributing you know parts equipment into the electrical grid and things like that. So yeah we are trying our best to to look at this space we haven't we don't have any Nvidia um and so we've missed some of the high-flying ones but we are trying to buy you know the uh the picks and shovels if you will of the industry those guys who are going to be build it and be able to take advantage of it on a number of levels. >> Okay. All right. Um, and when you talk about playing copper, um, you you're buying the metal, you buying, um, I'm getting a guess probably not because you you're you're more of a Buffett type. Let's find a great operator. Um, is it the big guys like the Freeport McMorins or I mean, who are you looking at? >> Yeah, I mean, of course, we had a we we maintain a very large position in Franco. We're hoping that uh that will come back online. The Cobra Panama um property will come back online. So, uh, we got some exposure there. And then, uh, we're looking at some smaller, uh, more focused miners also and see if we can't get some some better exposure also to the copper. >> Okay. Um, and speaking of copper, um, again, you're in Canada, but, um, in America, I I forgetting which state this is in. Um, it's in the West. Um, but there's the resolution mine, which I think has been like 30 years in permitting. I mean, just to show you kind of how bad or how crazy it it has gotten um in in even in the US uh to to open a mine, right? But apparently, if I'm remembering Rick Rule correctly, this is one of the like best untapped copper deposits left around. Um you're nodding as I'm saying this. So, with the the Trump administration kind of getting into drill, baby drill, I've heard him say, "Mine, baby, mine as well." Um could could something like that come into play and and who owns it? I think maybe Riot Tinto owns part of that. >> Yeah, I'm not sure. I I've heard Rick Rule speak about it and followed it from that perspective. So, I'm aware of it there. But I do think that what you're seeing with Trump and his uh his cabinet is that they want to unleash the mining sector also. You have to um and uh the the rules, the bureaucracy that you go through in Canada. Um we had the Trudeau government which we've had for 10 years. Now it's transitioned into the Carney government which is the same government but just a different leader. I mean they actually put roadblock up after roadblock after roadblock after roadblock. Instead of two to three years it comes 10 years, 12 years, 15 years and capital just disappears. So you have to take the regulations uh down. Again, you want to make sure they're looking after the environment, they're being good stewards. That's that's not the issue. You just don't tie them up in unnecessary red tape. And that's really what the bureaucracies have been doing. And um no, I think you're going to see a lot of changes with Trump. um and you are seeing those changes and hopefully that will put pressure on other regions around the world. are going to have to need to need need to compete otherwise um you're going to have a rip roaring economy in some areas um if you get all this capital going in the next couple of years >> right and and this isn't you know a proTrump type of thing but I think what you're saying Jonathan is is just company countries are waking up to the fact that look resources are you know the foundation of prosperity and if we want to get to where we want to go we're going to have to really make the best use of the resources as we have, right? >> You're going to go on the internet and you're going to use Grock and you're going to use, you know, different AI and you're going to have robots in your house like Elon Musk is talking about and you're going to have, you know, automated systems and e, you know, electric vehicles, you need to dig a lot of holes and you need to expand your mining industry dramatically, dramatically. Um so this idea that somehow um you know you don't have you can be green and you can drive your Tesla and uh you can live on the internet and you you never touch uh any any dirt is just ridiculous. In fact, we have to do more mining and more development, more exploration and more production than we've ever done in human history by far. Um if we're going to continue the trends that we're on right now. >> Okay. Um real quick, I I looked up uh the resolution mind. It's in Arizona and it's a joint venture between Rio Tinto which owns 55% and BHP which owns the other 45%. I also just looked at the Rio Tinto stock price. It's done okay this year Jonathan but not not gang busters not not barn burner. Do you do you do you look at companies like that and think hey that's something that's getting overlooked right now by the greater market. We are spending we're actually in the next the next month or so we've got a couple of our guys just looking at the copper the copper sector more and we got Mchuan mining he's got some interesting copper assets um and some of the other businesses uh like Riotinto uh tech and so forth so we are looking at a number of those companies they're tough businesses yeah and um they historically have uh uh not created a lot of wealth over time and that's what makes us a little more hesitant versus the precious metals and some of the you know clearer cut uh commodities. Um, and so that's what makes us just hesitant. But we are looking because, you know, the the demand factors and the and the pricing factors will work to their advantage. And there could be a nice trade there for just a couple of years where you can buy them relatively inexpensively and then, you know, sell them in a little couple years. I mean, we're value investors. We like to own three, five, 10 years. Best your best holding period according to Buffett and we agree is forever. But, uh, those aren't businesses you really can own forever. So, um, you have to be careful. The other sector that's been beaten down especially in Canada and for and for probably for good reason is the oil and gas. >> Oil. Yeah. Yeah. Same in the US. >> Yeah. And so we're looking at that area and even in the tech area I'm we're quite amazed at some of the software companies um uh have not done very well. You get constellation, you have Roer, you've got uh there's a Tyler that does a lot of municipal software. Um they also have really lagged. Um you've really seen um just the money really going into anything that's AI related. Um, so I think that's going to create some opportunities for investors to look at nonAI related sectors that have underperformed, not doing as well, and yet continue to grow their businesses and and do quite well. >> Okay. Well, so, uh, let's talk about oil and gas for a second, but particularly oil right now. Um, you know, what barrel oil is what, low 60s right now? >> Yeah, I guess the WTI is trading with 61, 62. >> Okay. Um and uh the stocks haven't performed all that great of late. And um what's this has really been catching my attention. Um look, there's a lot of reasons right now why oil is as low as it is. It's it's getting below the cost of extraction. Um, and so, you know, it's going to be challenging for Trump to have all the drill baby drill that he wants to have happen because a lot of these companies are like, it's just not economic for us to go do that right now, right? So, they're going to resist that. Um, the oil industry in general is a boom bust industry, right? We know it has these cycles. So, it's clearly right now seems to be in a down cycle. Now, could it go lower? Sure, absolutely. Um, but it will it should come back unless world demand for oil looks like it's going to change. Looking at it, world demand for oil, Jonathan, I don't see that happening anytime soon. I mean, the oil demand year after year after year, as as much as a lot of people would would love for it not to be the case, the world still runs on liquid hydrocarbons. >> Absolutely. And again, I go back to I'm going going to be doing a presentation a day or two up in Ottawa looking at where the energy is going to come from over the next 20 25 years. And most of the um most of the projections would have us at 100 million barrels a day 25 years from now. I mean, it really doesn't drop much. Some have it up to 120 million barrels a day, some down to 80 depending on where you stand on net zero and how that all gets implemented, but the basic projection is to continue using as much oil as we're using today. Um so, um that's that's our best guess. And uh I I think it actually could edge higher. is very difficult to get around the fossil fuels and the natural gas as you know is is quite clean and very plentiful and we've got lots of it up here in Canada too as you as you have down in the United States and again that's going to be used to uh again to power a lot of these data center >> these data centers yeah exactly so so on the oil side which really >> cheap and it's really cheap in Canada it's like just a couple bucks I mean right um we we turned down opportunities to sell it to Japan and over to Europe which Donald Trump was quite happy to fill in for us. Um, and we could have been making, you know, selling for two, three bucks and well, selling our cost would be two to three three bucks and selling it for, you know, 1012. It was it's insane the opportunities there are in in terms of that. Yeah. >> Okay. So, I I actually want to get to that specifically in a second, but um on the oil side, um it's it's cheap right now. Prices are depressed. um the industry will likely uh not be drilling aggressively, increasing supply uh until price recovers. Um so, you know, essentially it just means we're likely to have even, you know, rising odds of of some sort of shortage uh in our future here. And and again, this is one of those sectors Rick Rule has said, we have underinvested in capex for a good long time. And those sense of the past are going to catch up with us even if demand doesn't grow, which it likely will, as you said. Um, but my point is is this is a time where you can buy stocks like like the blue chip stocks in this space for really at really deep discounts and get paid handsomely. They're good dividend providers. Um, so to me this kind of feels like the situation a couple years ago buying some of these quality like like the Agneos of the world, right? Where they were really attractively priced. You got great management. You got a really quality company but at a really good value except you get paid more. You get paid a lot more to wait now and you still have that upside ahead of you. So I'm curious does it feel that way to you? You're a lot more experienced than I am in investing in the space. >> Yeah. No, absolutely. I mean we've had um Canadian Natural Suncore. We've also had a Mega Energy. We had we had a pretty good position in Mega Energy. Unfortunately, they're selling their business. They're being bought out um at what we believe is as a very inexpensive price. But these companies um were generating uh 12 13 14% free cash flow yields and so um they were getting their debt under control. A lot of them have uh you know very manageable debt. So what are they doing with all that cash if they're not you know investing it back into capital because the prices are too low dividends and stock repurchases. So in some cases you're also getting substantial stock repurchases. So you're getting uh again an increased ownership in this in the in the company and a deferred capital gain basically in the stock uh as they buy back the stock. So >> as a as a as a precious metals mining share owner over the past decade getting used to dilution uh this sort of anti-dilution sounds wonderful. >> No, that's exactly right. And uh when we looked at some now the prices were this is back if you get up to say $80 on some of the Canadian uh players and it wouldn't be different in the US they could basically buy back with free cash flow uh you know the whole the whole company in eight you know sometimes eight nine years it was crazy now look what is Warren Buffett buying you know where's he where is he putting some of his cash to work you know he's putting it in the oil and gas sector so uh and he's he's he's known to be a pretty smart investor so >> somebody I'm trying to remember who was telling I Jesse Felder, he said, "You can actually buy shares of accidental right now at a lower price than Warren Buffett's cost basis in it." >> Yeah. Yeah. Well, that that happens. But uh um and again, that just shows that uh even when Warren Buffett's buying, people aren't just don't care. They're not paying paying attention to what he's clearly signaling, and that is that is very inexpensive, and he's he's committed to be there for the next number of years. Yeah. >> All right. Um All right. Well, look, last question. I know we got to wrap up because you got to go. Um uh you talked about uh some of the we'll call it maybe the own goals that Canada has made against itself in terms of um uh using its resources to its best national interest. Um you talked about uh you know not selling your natural gas to Japan. Um, as I understand it, uh, you you're very oil rich domestically. Nobody argues with that. Um, but you're very poor in infrastructure to get that oil out of Canada to other countries that would want to buy it. Uh, you're you're smirking as I'm saying this. >> Well, Americans Americans should be very happy that we are very inefficient with our infrastructure because it all goes down south of the border. >> Well, that that's my question to you. So, I know right now in Alberta, you know, there's a huge hunger to to free up the landlocked oil there. They would love nothing more than to build a pipeline out to the Pacific and start shipping it off to to Asia. It does not seem like that's going to happen anytime soon. It seems like there's still a ton of resistance to that. What do you think is more likely, Canada to eventually find a way internally to come up with a way to build that infrastructure and start really exporting its own oil to the to the world? or you know once people simmer down from Trump's 51st state you know heranginguh from the campaign to strike a deal with America to to just have a much greater increased transfer of of resources between our countries. Yeah, I think it's getting, you know, um the the current government the current government is as as we know governments are that is incredibly ideologically driven and it really is driven by a a radical environmentalism. And so um what's happened recently is uh the pre the prime minister Carney says that he wants to build Canada. He talks about building Canada. They've got this great verbiage. We're going to build Canada. And so he's come up with five four or five projects that he wants to do, but none of them are pipelines. I mean, one of the most important things we need are pipelines, as you say, to be able to move uh the most important commodity we have in Canada, oil, um out to the coasts and so we could sell it into the um into the world market. 96% of our exports go to the United States because that's the only way we can go south. And so this is really really hurting us. And the other factor is uh Carney shouldn't be deciding what projects are done. That should be done in the private sector. So you've already got a top- down management by government, which means that if you're going to get any projects done in the in Canada under the current regime, um you've got to go hatinand to uh the prime minister and his cabinet and convince him that um that uh you know this is a project they should do. So that is really frustrating Alberta. No question about it and I think rightly so. So, if the they don't move these things forward, I think it will feed a separatist movement in in Alberta, which is already alive and well, and Alberta will do more deals south of the border. Um, no question about that. And that could even lead to potential succession from Canada. Um, the United States, uh, again, I'm speaking as a Canadian. I hope this doesn't happen. Um, but the United States would incredibly benefit massively from uh from having a direct relationship with Alberta, whether it was just economic or whether it was both economic and political. Um, as well as Saskatchewan. Saskatchewan's got uh the second largest uranium reserves in the world, active uranium reserves in the world. And it's also one of the bread baskets in terms of uh its agricultural uh business, you know, canola, wheat, the different pulses and so forth. So these are two very very rich provinces, very rich provinces, and they are being stymied by a federal government that won't let them do their projects. So they're of course going to look south the border and look to Trump and look to other opportunities to exploit those uh great resources if they're going to be styied within Canada and they can't get them to the global market. >> All right. Well, speaking as a single American, um you know, our interests are are I think best served by having a strong, prosperous, uh self-reliant partner to the north. Um but if uh if that just is not the way the cards are falling, we would love to partner uh you know, I think it only goodness would come from tighter economic partnerships with the parts of Canada that would want to partner around this stuff. So anyways, I I wish you guys the best in solving it all for yourselves, but if not, you know, I I certainly hope we would be happy to play whatever role we can uh in and helping you tap into that national treasure of yours uh in a way where you guys benefit the way you should from it. Um all right. Well, look, in in wrapping up here, we only have a couple minutes left, Jonathan. Um uh we've talked a lot about the the hard assets, the minerals, the natural resources side of things right now. um for um let me put it this way. Folks that are watching who watch Thoughtful Money, you know, episode in, episode out, and they they they like the whole pie. And for those who really also just like the the natural resource side of things, um if they live in Canadia in Canadia in Canada, uh and would like to get some help, uh from you and your firm, you know, help meaning just sort of some direction, some feedback on their personal situation and what they should do given their investment goals. um what are the ways in which RockBlank could help them out? >> Yeah, I know we've had a number of uh listeners, Canadian listeners through thoughtful money uh come to us and uh and we will have you know conversation talk look at their existing portfolios uh see what you know look at their objectives uh get to know them in terms of risk tolerances and uh suggest uh portfolios for them in terms of how best to manage the monies going forward. No pressure there's no cost to that whatsoever. come in um listen to us. Uh we've got some fantastic uh fantastic team members and uh we love talking to the different clients and giving them some long-term options in terms of how they can protect their capital and grow it uh despite the challenges. There's lots of challenges out there, but you can't hide your money under a mattress. You have to have a a program and uh you need to have a a good idea of where you're going. Good good investment strategy. >> All right. Well, look, um, in wrapping up here then, folks, if you'd like to get help from Jonathan and his team there at Rocklink if you live in Canada, or if you'd like to get help from ThoughtfulMoney's endorsed US partners, if you live here in the US, uh, feel free to reach out and talk to them by filling out the very short form at thoughtfulmoney.com. These discussions are free. Uh, it only takes you a couple seconds to fill out that form. There's no commitments involved, as Jonathan just said. They'll just do whatever they can to be as helpful to you as possible. Um, that being said too, folks, don't forget that uh, uh, Jonathan is going to be participating at Thoughtful Money's fall online conference, which is now coming up in just a week and a half. So, if you haven't bought your ticket yet, go buy it now at thoughtfulmoney.com/conference and go quickly. You've missed the early bird discount price, but we are offering a last chance to save discount price this week before ticket prices go up to full price next week. So, get your ticket on discount while you can. And if you are a premium subscriber to Thoughtful Money's Substack, look for the code that I've emailed you that you can use to get an additional $50 off of whatever the ticket price is. Um, Jonathan, thank you so much. I know you had a busy schedule and you shoehorn this in. I really appreciate it. >> Oh, it's wonderful speaking with Adam and I'm looking forward to that conference also in a week and a half. That'll be a wonderful time to to get caught up in all the different issues and the different speakers that you'll have on on that uh on that day. That's that'll be a great day. >> Thanks. Yeah, it's uh this is I say this every year, but I think this is the best faculty we've ever had. Uh and uh it could not be more timely given all the uncertainty going into the new year. So really look forward to it and again thank you for participating. All right, Jonathan, I'll see you there. And everybody else, thanks so much for watching.
Runaway Debt & Deficits + AI Buildout = HUGE Demand For Hard Assets | Jonathan Wellum
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YOU CAN STILL GET THE ‘LAST CHANCE TO SAVE’ PRICE DISCOUNT FOR THE THOUGHTFUL MONEY FALL …Transcript
If you look at the debt to GDP over just over the last five years in UK, in Germany, in France, in Italy, in Japan, it is skyrocketed. It just skyrocketed, Adam. It's going exactly the wrong way. The United States also, of course, has been going the wrong way. So, I'm and and we're in Canada and we having no economic growth. In fact, we have seen the shrinkage of GDP per capita because we've increasing um so much immigration into our country and the GDP isn't growing. So on a per capita basis is shrinking. [Music] >> Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. Uh very pleased to be sitting down today with Jonathan Wellum. Uh the head of Rocklink Investment Partners. Uh this is one of the financial advisory firms endorsed by Thoughtful Money. Specifically, they are endorsed Canadian provider. Jonathan, how you doing today? >> Doing very well. It's exciting day. We've uh got a new record close on the Komox gold over $4,000 I think the last I looked just right before four. >> And Jonathan um I know that gold futures have crossed 4,000 an ounce. Has spot itself crossed 4,000 yet? Do you know? >> Spot was trading just a few moments ago at 3980. 39.80. So very close up up about $20 today. Uh again just before the close. >> All right, spinning distance. Well, look um folks, we're going to talk about a lot of things today. Uh Jonathan was very kind enough uh to drop what he was doing and come record with me today. Uh we were it's a it's a Wednesday. This was supposed to be one of Stephanie Pomboy's appearances. Um she's had a couple of curve balls that she's been having to deal with. She feels terrible about having to push out her return to the channel, but she's hoping she's going to be able to make it next week. So anyways, just um wanted to let you know what's up with her, but thankfully Jonathan was willing to step in to the void here and fill it for us. So, first off, let's let's start with the precious metals, Jonathan. So, um first off, kudos to you because uh you have been uh quite a supporter of owning precious metals in your portfolio for a variety of reasons. Um some of them defensive, but I think much over the past year plus, you'd said that you thought there was a lot of opportunity for precious metals to rise. Uh and they have $4,000 an ounce for gold. Uh that is a phenomenal year so far for gold. I want to say it's up 45% so far year to date. >> Yeah, it is. Well, as of the end of September, it was up about 41, but now I think it's about 46% or so year to date, which is phenomenal. I think it's the best return since 1979 in terms of an annual return. So, that's uh that's that is that is a great return. No question about that. >> No question about that. And of course, that's just for gold. Now, silver has had an even better performance so far this year. Uh and the miners have done phenomenally well. Uh, I haven't looked at GDXJ um this week, but looking at it about a week ago, it was up well over 100% year to date. Um, and I know that the miners have been a big part of your um uh investment strategy is having a material percentage of the Rocklane portfolio in a couple of of really good high-quality miners. I've got to imagine that has paid off very well for you so far this year. >> Yeah, it's it's it's been amazing as you would expect. Agnigo Eagle has been really a major holding now for a number of years just simply because of the quality of the management, the quality of the assets, the political stability in terms of uh where they're located. And uh it's quite interesting um if you actually look at a company like Agniko Eagle and you look at the free cash flow yield um currently uh even though the price of the stock has gone you know it's it's tripled over the last couple of years uh it's still trading the free cash flow yield at uh at a higher rate than it was uh three four years ago. And um if you if you actually factor in um maybe 4,500 gold, 50 silver, which isn't crazy um over the next year if you are bullish on the on the metals um you you can you can you can really justify like a 9 10% free cash flow yield in some of these stocks. What it's telling you is that they're incredibly profitable that uh with the increase in gold going uh you know up a couple thousand dollars here that's all going to bottom line to really well-run companies. you know, the costs have really been maintained by some of these firms and the uh the free cash flow growth is absolutely astounding uh Adam. So, we look at some of these companies and um you know, they're probably trading at uh similar net asset values even after they've doubled um than they were before simply because the price of the commodities have gone up so much. So, okay, help me understand then, Jonathan. Um, does does that mean that despite as well as the complex has performed year-to- date, you still think it's it's I don't want to know if I should use the word undervalued, but but that um there's still plenty of potential for appreciation here because they're not overvalued at least. >> Well, what's happened? Yeah. I mean, what I would say is the following. If you believe that gold will maintain its value in the $4,000 range and even continue to sneak up, not at the same rate that we've seen, but continue to edge up because of the global uh problems, economic problems, debt problems, all of the things that uh we can rattle off, which is why you want to own gold, concern over fiat currency and so on. Then the valuations today on some of these companies um is uh no different than it was a couple of years ago. And so, yeah, >> which was believed to be pretty undervalued, right? >> Yeah. Now, again, that that was anticipating a, you know, a larger rise in the price of gold. But if you can buy some of these great companies at 10 11% free cash flow yields next year based upon say $4,500 gold, um, that's not that's not overly expensive, especially again if you believe that fiat currency is going to be under under uh pressure. If you believe that $350 trillion dollars of global debt is too large, if you think a $2 trillion deficit, you know, in terms of the US deficit and 37 trillion debt is way too large and all of those things which haven't gone away, um then um and you think gold will continue to, you know, edge higher as a protection against your your purchasing power erosion because of inflation, then yeah, I think that some of these stocks are are continuing to be very good value. >> All right. So you had some ifs there and probably the biggest one was if you still think that fiat currencies are going to come under pressure. Well, let's ask the question, okay, what would what would make fiat currencies not come under pressure? Um, you mentioned the debt. The debts the debt's a big issue, but it is less of an issue if economic growth really picks up. I I talked to a lot of people. There are some now that are expecting the economy might be a little bit more robust this year than it is this year, but nobody at least that I talked to is predicting like a boom ahead, right? So, probably unlikely that we're going to have economic growth like materially boom from here in the next immediate year or two. uh then the other thing that would help uh fiat currencies would be if the deficit spending got slashed and I don't see that happening anywhere around the world even in America where we had Doge and it was a big part of the current administration's um campaign platform largely they've basically said we're we're going to take care of it we're going to take care of it down the road right so the the one big beautiful bill basically had a ton of spending provisions now with the hope or intent that yeah 3 four years out maybe some fiscal discipline comes into the picture but I know there's a lot of people that still have a lot of you know understandable doubt around that so you know the whole lynald and nothing stops this train we're in the situation right now where the the central planners just have to keep running bigger and bigger deficits so again I don't see relief coming on the GDP growth side nor do I see uh relief coming on the uh deficit reduction side is there any other reason to to think that Oh, fiat currencies might actually have a a rebound here in terms of their value. >> Yeah, when I when I give some of those conditions, uh I'm just giving them just to make sure that people understand uh you know uh what could reverse. I don't think those will reverse. I agree with you 100%. We are bullish on gold and think it will continue to go up. But I'm I'm a money manager. I'm also an investment manager. I have to manage the risk. I have to manage the expectations of clients and uh do reasonable asset allocation so that we're protecting people. Everyone's got different risk tolerances, but when I look at the current economic environment around the world, it is not pretty. I mean, you go over to Europe and there's there's virtually no, you know, very little growth over in Europe. We just see we just had the third collapse of the French government in the last 12 months. We've got social problems in all of these countries in Europe. Uh Germany's industrial production is collapsing. Um they're going to have to reverse their green policies. Uh energy costs are way too high for the manufacturing. Um, >> they all have to pay more for their defense now. >> Yes. And and some of these people are saying they're going to pay up to 5% of GDP of defense, which I don't where are they going to get that money? I mean, Germany now is starting to borrow at a record rate. Um, and so what you're seeing is these comp countries are actually going further into debt. I mean I ran some numbers uh just looking around here um on the debt to GDP and u if you look at the debt to GDP over just over the last five years in UK in Germany in France in Italy in Japan it is skyrocketed it just skyrocketed Adam it's going exactly the wrong way the United States also of course has been going the wrong way so I'm and and we're in Canada and we having no economic growth in fact we have seen a shrinkage of GDP per capita because we've increasing u so much immigration into our country and the GDP isn't growing so on a per capita basis it's shrinking so I think the United States currently is an anomaly when it comes to economic growth and that is because again you are running large deficits tax policy has been more favorable regulations are going down Trump is attracting a lot of capital to the country I can say that being a Canadian because it's leaving Canada and going to the US and so I think that if you're in the US you're actually seeing a much more robust economy. Um lower unemployment 4%, we've got 7% up here in Canada and so but so you know my my point in terms of the gold is that uh no around the world you're not seeing great economic growth. The US is quite unique but the debts just continue to pile up and so I think that's going to be very favorable in terms of gold going forward. and uh the policies of uh the green agenda um the increasing costs of energy around the world um those all have to reverse before we're going to see a change in the price of gold um we're going to see a continual erosion in fiat currency think it's it's irreversible at this point until we until we uh degrade the currencies quite a bit >> okay and that's sort of where I was going from here which is your thesis about gold's continue to rise from here was okay one of the things that could derail it is if fiat currencies suddenly just started getting a lot more hail and hearty but for the reasons you just mentioned that does not seem to be a high profitability event um is a is a diplomatic way of putting it. So if if indeed uh prices of gold and silver still continue to hang out where they are, continue to go up from here even at a lower rate, you're saying that the mining company mining shares should continue performing really nicely. And kind of where I'm going with this, Jonathan, is in our previous discussions, we've talked about how a decade ago there was not much interest in gold. And then several years ago, the central banks started buying it, beginning to really eventually see it as a as a preferential holding to US treasuries, which is a pretty pretty big and seismic shift in and of itself. Along that path, we saw the the eastern investor wake up and say, "Yeah, I'll I'll buy basically as much gold from the West as you're willing to sell it to us at today's prices." We've been we've been wondering, okay, when is the Western investor going to wake up in this? And you and I have talked about how Wall Street is really not a huge fan of gold, but at the end of the day, Wall Street is a much bigger fan of momentum and making profits. And when a sector starts catching fire enough, doesn't matter what people's ideologies are, they just want to chase, you know, the momentum that's going on there. Are we seeing that yet in the precious metal space? Is part of gold's rise and part of the rise of the miners here? Is that Western capital really starting to flow into the space or is this just happening organically and we still have yet to have that big tailwind of the western investor pile in here? I don't think that uh the average investor has become uh really increased the percentage of gold in any material way. Um again, according to individuals who have been looking at this, they still say it's on average about a half a percent of someone's portfolio. Um so it's quite small. And when you look at the total gold space in terms of gold, you know, companies and royalty companies, you're probably talking about uh maybe $600 billion in terms of market cap. Um that's that's really just a little over what's that 10 12% of Nvidia. I mean it's it's really quite small and it's quite shocking how how small it actually is. And so I do think there's a lot more uh room to go. Now we are getting calls from you know this is antidotal. We're getting calls from more retail investors saying you know should I be buying more gold? Should I you be increasing my portfolio? And we hear that you know clearly that's on the street. People are starting to talk about it more. I was listening to an interview with Pierre Lassan just a couple about a week or so ago and he said that he was doing an institutional run which he hadn't done for 10 years in Europe for a company that he's promoting and he said that only 10% of the institutional managers had any exposure to gold that he was talking to in Europe and that's in Europe and so no I think it is underweighted underowned underlod and uh people continue to pound into the AI stocks and um and the the Magnificent 7 interesting enough I I had one of my guys at the office just run some quick numbers on, you know, year-to- date gold if you started at $10,000, just started at $10,000, gold would be trading at the end of September about 14,100. Um, the Royal Six, we call it would be the six biggest royal royalty companies. They'd be about uh 18,000, so up about 80%. And the Mag 7 are actually up uh to 11,200, up about 11 11 and a quarter percent. Um, if you take Nvidia out of there, only $11,000. So, um, they haven't performed as well this year. If you take a video out of some of the numbers, even going back three years, um, you've got, uh, the royal six, uh, royalty companies, the top six, you know, Franco Nevada, wheat and precious metals, Royal Gold, Sandstorm, Cisco, O, and, um, Triple Flag, they've actually outperformed a lot of these tech companies. I don't think the market realizes that. And if you look at some of the mining companies, I think they've got a lot more room to go. They they've done well this year, but they've got a lot more upside. So, one of the things two of the things that have sort of hampered Wall Street from investing in this sector of late, um, one is its size, right? It's just a small market and and big institutional funds like to look for places where they can put lots of money. Uh, so they just tend to look at the bigger sectors. Um, and obviously, you know, the tech sector over the past bunch of years has had all the glory, and that's where they've been focusing on their attention. But also, I think over the past 10 plus years, and you would know this better than I, the the firms have kind of gotten rid of a lot of their mining analysts, right? There's just there's just not anybody at these companies that really follow this space. So, even if they're kind of interested, they don't have an in-house expert to go to and say, "Well, which of the ones are best positioned or what?" So there's just a lot more, I think, opacity and friction preventing Wall Street from getting in here. Do you see that as being a permanent barrier or do you think at some point Wall Street's just going to say, "Look, we got to get in this game. These things are doing too well." >> Well, Wall Street will chase the profits. And so I do think that there's going to be more coverage and people are will step into. I mean, Goldman um is is pretty active in the space, JP Morgan. Um so you are seeing reports coming out uh from those companies and uh some others. Um but it is a it's still a small space. So they'll look at u they'll look at the economic viability of covering the space. But um like anything if it continues to go if if this goes for another number of years and again not at the same rate we saw this year but if it continues to uh go higher gold simply because fiat currencies are under massive pressure as we've talked about that's not going to go away. People will look for protection. They're going to look for a hedge. um they're seeing that also in uh you know the cryptocurrencies and bitcoin and so on um then I think you will get more people coming into the space and following it. The other issue that um has been a big one is just index investing and you don't have many of these gold companies in the index. You really just pneumon um and so uh you know they're not being picked up by the these massive flows that are going into um the the index products and some of the ETFs. >> Yeah, that's right. They're they're sort of left out of that game. So, I I think you've answered the question, but I I just want to put it fully on the table. You know, is is there anything about this mining sector that might preclude this expected title wave, if you will, of Wall Street capital flowing into the space at some point um because of it's so small or so opaque or whatever. And I guess what I've heard from you is is no, if if it keeps performing like this, eventually Wall Street Capital will find its way there. But I just want to make sure. >> Yeah. And you don't need to have every firm following it. So there might be some might not be comprehensively followed, but if you just have a couple of the major players, that'll be enough to shift money into this space and really ratchet up some of the uh some of the prices very quickly. So uh that's what I would anticipate. Even if it's not broadly covered, it's going to be impossible uh for some of the major players not to continue covering it and covering it more in depth. And um so I that's I again I would I would see that the ability and the probability of a large uptick and uh over the next couple of years is still there. Yeah. >> Okay. Um so I've asked you this variance of this question in the past but you know given the small size of this space um there is uh a question which I'll ask you um so I'll put on the table right now which is about sober is is sober in any way part of is it an AI play in any way and the reason why I asked that is is you know sober's as far as I know it's the most conductive element out there, the most conductive metal out there. We're going to need to be dramatically expanding our electrical grid so that we can build a ton of data centers. There's presumably going to be silver used in in, you know, a good chunk of that. I've asked this question to other precious metals guys before, Jonathan, just so you know, and they've said maybe copper is probably the better bet better bet, which I agree with. There's a lot of copper that's going to be needed for that. But but where I'm going with this is there aren't that many pure play silver miners out there, right? So I just looked up the market cap for um first Majestic, which is one of the largest silver more or less pure play silver miners out there. It's market cap 6 billion. I mean, why wouldn't a company say like, you know, an Nvidia or, you know, somebody who's just got gobs of cash, big uh big cash position on their balance sheet and just say, you know what, I'm going to buy that company. I'm going to lock up that supply so at least I have it if I need it commercially, but also if hey, if if this thing's got a big tailwind at it, that could be a good, you know, asset on the books for the company. Um, why or just a billionaire? I mean, there are billionaires out there right now that have 50 billion, you know, more. Why don't they just buy a ton of silver sober or whatever and just take a big chunk of it off the market or buy some of these players? >> Yeah, I mean I'm I think those are all possibilities, Adam. That's that is the reality. Um, I'm I'm going to be doing a presentation um in in a day or two up in our capital city um in Ottawa in Canada talking about uh just this resource boom as a result of AI digitization, robotics, EV, all of these things which is really causing a large uptick in energy demand. And according to my research, and I've gone into, you know, this fair fair detail, they're talking in the next 25 30 years, we're going to need about a 100% increase in the silver um content. So that's fairly substantial. I mean copper you're looking at about 80% which is in 20 years which is very hard to come by. So I think silver copper yeah there will be a large increase in the demand as a result again if these trends continue uh because of AI robotics digitization um EVs batteries all of these things silver is going to be very important and as as you know uh it's pretty tight market now it's very tight market at this point I mean some people say again there's been uh not enough production really to meet the demand both manufacturing and for the precious metals uh monetary side of it so I think it is incredibly strategic IC investment on two fronts both both in terms of uh the green know technology and and uh and for energy and also for as a monetary uh unit and so I think it's quite possible you're going to see strategic investments in these companies we're seeing that in other metals the US government I was bought into trilogy I mean they're trying to get rare earth so I think yeah this precedent is being set and uh this would not surprise me at all uh to see strategic investments in some of these companies and they are as you say relative to the market cap of some of these AI companies, it's nothing. It's it's like it's like it's it's uh it's a drop in the bucket and uh and these companies are, you know, create a lot of cash flow. So, yeah, I would expect um potentially more of that. And copper is another one. I mean I mean it's it's growing 3 4% a year and as you know to develop a copper mine it takes 10 years plus it takes tens of billions of dollars and there's not very many places where you can find these massive deposits. Um and uh in some cases as we saw in Panama Cobra Cobra mine there it was actually shut down right at the time it started to produce but uh even there there's so much pressure to get that open uh because uh the government needs that revenue needs that money and we need the copper. So I think yeah some of these things could materialize over the next year in a couple years uh because of the increase in demand and the strategic nature of some of these metals. >> Okay. So, um, there was a there was a billionaire, uh, who, um, Twitter was a buzz with this or X was a buzz with this a few weeks ago. Um, David Baitman, I think was his name. Um, and he, um, he bought, I would say maybe a billion dollars worth of of uh, of silver. I don't know if it was quite that much, but it was a lot. Um, definitely closer to a billion than not. Um and and and to me that was sort of evidence of what we've been talking about which is hey why don't some of these guys just just buy a ton of it and there's not that much on a relative basis uh above ground silver and so you could really take a lot of supply off the market right away now that might be a reason why silver is continuing to have the run that it's having but I know I'm asking you to guess here but but what do you think would happen to the price of silver if say an Nvidia uh or an Apple um just bought First Majestic. What do you think would happen the next day? Where I'm going with this is like not only would it be potentially a good strategic asset for you to have, but you might be able to like double your money in in a week. >> Freaks out. Yeah. >> Yeah. I mean I mean look, I think the longer term trends mean that silver go triple digit anyway. Um but uh I think it would go triple digit digit very quickly which is at this point it would be a double uh very quickly up into the hundreds of dollars. Um and that's not crazy thinking. That's I think very reasonable. You remember Warren Buffett he he bought a lot of silver back was like 9798. I remember going down to the annual meetings people said what the dickens is he doing buying silver. Um but he was told later on he did say that the uh the US Treasury told him to get off of it. They tapped him on the shoulder. Yeah, they they gave him a little tap and say, "Hey, Warren, you know, uh we like you and you like to get along with us uh a little bit better than get off that silver." And so that was the strategic he saw that he saw how tight the market is. And so if there, you know, demand comes in um to the marketplace and it's going to because we're going to need more and more silver and again the silver production is not growing that quickly. Um again, you talk about First Majestic and Keith Nummire there. I mean, he's he'll rattle off all the all the stats on silver and it's a tight market. Um, and demand's going up. So, and it's in countries which, you know, there's there's they're always fighting to get it out of the ground. There's issues in Mexico, different places. It's not it's not in easy places either. Um, so yeah, no, I think there's a lot of upside potential um and silver and we maintain uh some silver exposure in a number of the companies we own and also in some of the royalty businesses, they have exposure to the silver. Yeah. >> Um, all right. Well, just parting point on this. Um I think the metals that are essential to the buildout of um America's or actually most countries um the rebuilding of uh their energy their electrical production capacity have an uncommon tailwind behind them. And the reason for that is um when you compare our electrical production capacity to China's they are leaving us in the dust. Uh there's a chart I'll try to find it. uh to put it up here when I edit this. Jonathan, I've showed it before, but um the US's um electrical production capacity has basically been flatlined for the past couple decades. China has super invested in this space. They're now way ahead of us and their our line is like a horizontal flatline. Their line now is almost like a vertical flat a vertical line. Um and um if we want to win the AI race, which I think we have all said is a sovereign um existential priority for the US um we have to be a winner in providing plentiful cheap electrons to the AI data centers. Um so we could we could even go through I think a big bust of the AI bubble market value-wise where the market says you know what we price these stocks way too much. we're going to cut them in half by 50 plus percent or whatever. You could have kind of a wipeout like that like the dot era. Even if we do, and that would be very painful marketwise, I don't think that's going to stop the buildout of the electrical grid because I think that that is market independent. I think that is the US and other countries too, but the US in particular saying we must win this just like we had to win the nuclear race. So, we're going to do whatever it takes. And that buildout is just going to place increasing amounts of demand on these metals. Copper uh you probably know some other ones more than I do that will be >> nickel, cobalt, lithium. There's a whole host of uh host of them really a good a large assortment of them at the end of the day. Um some some more difficult to acquire than others, >> right? So, um I I I think as long as as winning AI remains as important a sovereign strategic objective as say winning the nuclear arms race, um these things are just going to have I mean almost infinite demand over the next decade or so for them. And you know, as Rick Rule has been warning us about a lot with a lot of commodities is is no matter what happens going forward, demand goes up, demand stays flat. We have underinvested a lot in the capex in these industries and in building the mines, doing the explorations and stuff like that. So that we could very a very high probability of some of these key resources be entering into shortages. Hopefully those will be you know uh those shortages will be cleared up over time but that may take years once they manifest to your point because you can't just turn on a mine like that. It takes takes a good while. Um, so anyways, it just it seems like the investment thesis behind the metals related to the electrical buildout play uh seems to be one that we can have pretty good confidence in. Do you do you feel similarly? >> No, I agree 100%. The underinvesting has been I think largely due again to this whole green um ideology that we've seen across the world. And uh I mean you see it with Germany. They they shut down their nuclear facilities. Now they've got to get them back up again. and they think they're going to rely just on solar and wind and so forth. It's it's not doable in Canada. I mean, again, I'm go back to my own country. What we've done is we've bypassed um best estimates about $700 billion of capital that should have been invested in the resource sector over the last 10 years alone. That's like a trillion and a half of GDP. Um and so this underinvestment in the resource sector isn't just in Canada. It's just not over in Europe. Um it's really been around much of the world with the exception of course of India and China and Russia. they continue to go full steam ahead and in the US um it was under a lot of pressure again in the Obama years and of course under Biden. Um now Trump is reversing that and he's putting on a big push to get the resources developed. Drill drill drill drill baby drill um get the rare earths um make sure you're not vulnerable and I think that is going to help kick up you know some of the some of the production in some of these areas but as you know it takes years. It takes years and um United States can't do all that on its own. So other countries are going to have to get their act together also or they're going to fall very far behind. If you look at the data centers, I mean there's about 12,000 data centers uh in the world right now. The US has about uh 40% 45% of them and they anticipate again these are estimates but you know it gives us a direction to go anyway. By 2050, we're going to have 90,000 of these in the world. And they're estimating because of the US leadership and the place to, you know, the best place to put money and attract capital that you guys will have like 55% or more, 60% of those uh data centers. And that would be phenomenal, but you're going to have to put trillions into the grid. No question about it. And that's why I think a um Google, Amazon, and um Microsoft and so forth are doing these deals uh to make sure that they're securing the energy as they build these facilities out. Yeah. So >> yeah, and to my point in my point like I I just don't understand why they don't do deals to secure the mining supply and just like literally buy something. >> That's probably coming, Adam. I that's probably coming. I I again I think you you've hit on something there. And if it's if it's going to be profitable and it's strategic and it's not going to be very expensive for these companies to swallow some of these productions and uh secure it, it'll happen. It'll happen. >> Okay. So, um obviously you guys have had your positions in the precious metals space for a while. Um are you also positioning for some of these trends that we're talking about here? Whether it's AI, whether it's the metals demand on the data center buildout, uh etc. I mean are these things that you are looking at in your portfolio construction? >> Yeah, we we try to get we try to get exposure to copper. I mean copper I think a lot of people have talked about that. We're not we're not geniuses when it comes to that either. I think copper is incredibly strategic. Very very hard to come by though in terms of growing it. So copper we also get exposure to some of the companies building the AI facilities. So we have some exposure to Brookfield. They have some of the they're building some of these um data centers. uh Snyder Electric which is uh again also building some of the data centers and contributing you know parts equipment into the electrical grid and things like that. So yeah we are trying our best to to look at this space we haven't we don't have any Nvidia um and so we've missed some of the high-flying ones but we are trying to buy you know the uh the picks and shovels if you will of the industry those guys who are going to be build it and be able to take advantage of it on a number of levels. >> Okay. All right. Um, and when you talk about playing copper, um, you you're buying the metal, you buying, um, I'm getting a guess probably not because you you're you're more of a Buffett type. Let's find a great operator. Um, is it the big guys like the Freeport McMorins or I mean, who are you looking at? >> Yeah, I mean, of course, we had a we we maintain a very large position in Franco. We're hoping that uh that will come back online. The Cobra Panama um property will come back online. So, uh, we got some exposure there. And then, uh, we're looking at some smaller, uh, more focused miners also and see if we can't get some some better exposure also to the copper. >> Okay. Um, and speaking of copper, um, again, you're in Canada, but, um, in America, I I forgetting which state this is in. Um, it's in the West. Um, but there's the resolution mine, which I think has been like 30 years in permitting. I mean, just to show you kind of how bad or how crazy it it has gotten um in in even in the US uh to to open a mine, right? But apparently, if I'm remembering Rick Rule correctly, this is one of the like best untapped copper deposits left around. Um you're nodding as I'm saying this. So, with the the Trump administration kind of getting into drill, baby drill, I've heard him say, "Mine, baby, mine as well." Um could could something like that come into play and and who owns it? I think maybe Riot Tinto owns part of that. >> Yeah, I'm not sure. I I've heard Rick Rule speak about it and followed it from that perspective. So, I'm aware of it there. But I do think that what you're seeing with Trump and his uh his cabinet is that they want to unleash the mining sector also. You have to um and uh the the rules, the bureaucracy that you go through in Canada. Um we had the Trudeau government which we've had for 10 years. Now it's transitioned into the Carney government which is the same government but just a different leader. I mean they actually put roadblock up after roadblock after roadblock after roadblock. Instead of two to three years it comes 10 years, 12 years, 15 years and capital just disappears. So you have to take the regulations uh down. Again, you want to make sure they're looking after the environment, they're being good stewards. That's that's not the issue. You just don't tie them up in unnecessary red tape. And that's really what the bureaucracies have been doing. And um no, I think you're going to see a lot of changes with Trump. um and you are seeing those changes and hopefully that will put pressure on other regions around the world. are going to have to need to need need to compete otherwise um you're going to have a rip roaring economy in some areas um if you get all this capital going in the next couple of years >> right and and this isn't you know a proTrump type of thing but I think what you're saying Jonathan is is just company countries are waking up to the fact that look resources are you know the foundation of prosperity and if we want to get to where we want to go we're going to have to really make the best use of the resources as we have, right? >> You're going to go on the internet and you're going to use Grock and you're going to use, you know, different AI and you're going to have robots in your house like Elon Musk is talking about and you're going to have, you know, automated systems and e, you know, electric vehicles, you need to dig a lot of holes and you need to expand your mining industry dramatically, dramatically. Um so this idea that somehow um you know you don't have you can be green and you can drive your Tesla and uh you can live on the internet and you you never touch uh any any dirt is just ridiculous. In fact, we have to do more mining and more development, more exploration and more production than we've ever done in human history by far. Um if we're going to continue the trends that we're on right now. >> Okay. Um real quick, I I looked up uh the resolution mind. It's in Arizona and it's a joint venture between Rio Tinto which owns 55% and BHP which owns the other 45%. I also just looked at the Rio Tinto stock price. It's done okay this year Jonathan but not not gang busters not not barn burner. Do you do you do you look at companies like that and think hey that's something that's getting overlooked right now by the greater market. We are spending we're actually in the next the next month or so we've got a couple of our guys just looking at the copper the copper sector more and we got Mchuan mining he's got some interesting copper assets um and some of the other businesses uh like Riotinto uh tech and so forth so we are looking at a number of those companies they're tough businesses yeah and um they historically have uh uh not created a lot of wealth over time and that's what makes us a little more hesitant versus the precious metals and some of the you know clearer cut uh commodities. Um, and so that's what makes us just hesitant. But we are looking because, you know, the the demand factors and the and the pricing factors will work to their advantage. And there could be a nice trade there for just a couple of years where you can buy them relatively inexpensively and then, you know, sell them in a little couple years. I mean, we're value investors. We like to own three, five, 10 years. Best your best holding period according to Buffett and we agree is forever. But, uh, those aren't businesses you really can own forever. So, um, you have to be careful. The other sector that's been beaten down especially in Canada and for and for probably for good reason is the oil and gas. >> Oil. Yeah. Yeah. Same in the US. >> Yeah. And so we're looking at that area and even in the tech area I'm we're quite amazed at some of the software companies um uh have not done very well. You get constellation, you have Roer, you've got uh there's a Tyler that does a lot of municipal software. Um they also have really lagged. Um you've really seen um just the money really going into anything that's AI related. Um, so I think that's going to create some opportunities for investors to look at nonAI related sectors that have underperformed, not doing as well, and yet continue to grow their businesses and and do quite well. >> Okay. Well, so, uh, let's talk about oil and gas for a second, but particularly oil right now. Um, you know, what barrel oil is what, low 60s right now? >> Yeah, I guess the WTI is trading with 61, 62. >> Okay. Um and uh the stocks haven't performed all that great of late. And um what's this has really been catching my attention. Um look, there's a lot of reasons right now why oil is as low as it is. It's it's getting below the cost of extraction. Um, and so, you know, it's going to be challenging for Trump to have all the drill baby drill that he wants to have happen because a lot of these companies are like, it's just not economic for us to go do that right now, right? So, they're going to resist that. Um, the oil industry in general is a boom bust industry, right? We know it has these cycles. So, it's clearly right now seems to be in a down cycle. Now, could it go lower? Sure, absolutely. Um, but it will it should come back unless world demand for oil looks like it's going to change. Looking at it, world demand for oil, Jonathan, I don't see that happening anytime soon. I mean, the oil demand year after year after year, as as much as a lot of people would would love for it not to be the case, the world still runs on liquid hydrocarbons. >> Absolutely. And again, I go back to I'm going going to be doing a presentation a day or two up in Ottawa looking at where the energy is going to come from over the next 20 25 years. And most of the um most of the projections would have us at 100 million barrels a day 25 years from now. I mean, it really doesn't drop much. Some have it up to 120 million barrels a day, some down to 80 depending on where you stand on net zero and how that all gets implemented, but the basic projection is to continue using as much oil as we're using today. Um so, um that's that's our best guess. And uh I I think it actually could edge higher. is very difficult to get around the fossil fuels and the natural gas as you know is is quite clean and very plentiful and we've got lots of it up here in Canada too as you as you have down in the United States and again that's going to be used to uh again to power a lot of these data center >> these data centers yeah exactly so so on the oil side which really >> cheap and it's really cheap in Canada it's like just a couple bucks I mean right um we we turned down opportunities to sell it to Japan and over to Europe which Donald Trump was quite happy to fill in for us. Um, and we could have been making, you know, selling for two, three bucks and well, selling our cost would be two to three three bucks and selling it for, you know, 1012. It was it's insane the opportunities there are in in terms of that. Yeah. >> Okay. So, I I actually want to get to that specifically in a second, but um on the oil side, um it's it's cheap right now. Prices are depressed. um the industry will likely uh not be drilling aggressively, increasing supply uh until price recovers. Um so, you know, essentially it just means we're likely to have even, you know, rising odds of of some sort of shortage uh in our future here. And and again, this is one of those sectors Rick Rule has said, we have underinvested in capex for a good long time. And those sense of the past are going to catch up with us even if demand doesn't grow, which it likely will, as you said. Um, but my point is is this is a time where you can buy stocks like like the blue chip stocks in this space for really at really deep discounts and get paid handsomely. They're good dividend providers. Um, so to me this kind of feels like the situation a couple years ago buying some of these quality like like the Agneos of the world, right? Where they were really attractively priced. You got great management. You got a really quality company but at a really good value except you get paid more. You get paid a lot more to wait now and you still have that upside ahead of you. So I'm curious does it feel that way to you? You're a lot more experienced than I am in investing in the space. >> Yeah. No, absolutely. I mean we've had um Canadian Natural Suncore. We've also had a Mega Energy. We had we had a pretty good position in Mega Energy. Unfortunately, they're selling their business. They're being bought out um at what we believe is as a very inexpensive price. But these companies um were generating uh 12 13 14% free cash flow yields and so um they were getting their debt under control. A lot of them have uh you know very manageable debt. So what are they doing with all that cash if they're not you know investing it back into capital because the prices are too low dividends and stock repurchases. So in some cases you're also getting substantial stock repurchases. So you're getting uh again an increased ownership in this in the in the company and a deferred capital gain basically in the stock uh as they buy back the stock. So >> as a as a as a precious metals mining share owner over the past decade getting used to dilution uh this sort of anti-dilution sounds wonderful. >> No, that's exactly right. And uh when we looked at some now the prices were this is back if you get up to say $80 on some of the Canadian uh players and it wouldn't be different in the US they could basically buy back with free cash flow uh you know the whole the whole company in eight you know sometimes eight nine years it was crazy now look what is Warren Buffett buying you know where's he where is he putting some of his cash to work you know he's putting it in the oil and gas sector so uh and he's he's he's known to be a pretty smart investor so >> somebody I'm trying to remember who was telling I Jesse Felder, he said, "You can actually buy shares of accidental right now at a lower price than Warren Buffett's cost basis in it." >> Yeah. Yeah. Well, that that happens. But uh um and again, that just shows that uh even when Warren Buffett's buying, people aren't just don't care. They're not paying paying attention to what he's clearly signaling, and that is that is very inexpensive, and he's he's committed to be there for the next number of years. Yeah. >> All right. Um All right. Well, look, last question. I know we got to wrap up because you got to go. Um uh you talked about uh some of the we'll call it maybe the own goals that Canada has made against itself in terms of um uh using its resources to its best national interest. Um you talked about uh you know not selling your natural gas to Japan. Um, as I understand it, uh, you you're very oil rich domestically. Nobody argues with that. Um, but you're very poor in infrastructure to get that oil out of Canada to other countries that would want to buy it. Uh, you're you're smirking as I'm saying this. >> Well, Americans Americans should be very happy that we are very inefficient with our infrastructure because it all goes down south of the border. >> Well, that that's my question to you. So, I know right now in Alberta, you know, there's a huge hunger to to free up the landlocked oil there. They would love nothing more than to build a pipeline out to the Pacific and start shipping it off to to Asia. It does not seem like that's going to happen anytime soon. It seems like there's still a ton of resistance to that. What do you think is more likely, Canada to eventually find a way internally to come up with a way to build that infrastructure and start really exporting its own oil to the to the world? or you know once people simmer down from Trump's 51st state you know heranginguh from the campaign to strike a deal with America to to just have a much greater increased transfer of of resources between our countries. Yeah, I think it's getting, you know, um the the current government the current government is as as we know governments are that is incredibly ideologically driven and it really is driven by a a radical environmentalism. And so um what's happened recently is uh the pre the prime minister Carney says that he wants to build Canada. He talks about building Canada. They've got this great verbiage. We're going to build Canada. And so he's come up with five four or five projects that he wants to do, but none of them are pipelines. I mean, one of the most important things we need are pipelines, as you say, to be able to move uh the most important commodity we have in Canada, oil, um out to the coasts and so we could sell it into the um into the world market. 96% of our exports go to the United States because that's the only way we can go south. And so this is really really hurting us. And the other factor is uh Carney shouldn't be deciding what projects are done. That should be done in the private sector. So you've already got a top- down management by government, which means that if you're going to get any projects done in the in Canada under the current regime, um you've got to go hatinand to uh the prime minister and his cabinet and convince him that um that uh you know this is a project they should do. So that is really frustrating Alberta. No question about it and I think rightly so. So, if the they don't move these things forward, I think it will feed a separatist movement in in Alberta, which is already alive and well, and Alberta will do more deals south of the border. Um, no question about that. And that could even lead to potential succession from Canada. Um, the United States, uh, again, I'm speaking as a Canadian. I hope this doesn't happen. Um, but the United States would incredibly benefit massively from uh from having a direct relationship with Alberta, whether it was just economic or whether it was both economic and political. Um, as well as Saskatchewan. Saskatchewan's got uh the second largest uranium reserves in the world, active uranium reserves in the world. And it's also one of the bread baskets in terms of uh its agricultural uh business, you know, canola, wheat, the different pulses and so forth. So these are two very very rich provinces, very rich provinces, and they are being stymied by a federal government that won't let them do their projects. So they're of course going to look south the border and look to Trump and look to other opportunities to exploit those uh great resources if they're going to be styied within Canada and they can't get them to the global market. >> All right. Well, speaking as a single American, um you know, our interests are are I think best served by having a strong, prosperous, uh self-reliant partner to the north. Um but if uh if that just is not the way the cards are falling, we would love to partner uh you know, I think it only goodness would come from tighter economic partnerships with the parts of Canada that would want to partner around this stuff. So anyways, I I wish you guys the best in solving it all for yourselves, but if not, you know, I I certainly hope we would be happy to play whatever role we can uh in and helping you tap into that national treasure of yours uh in a way where you guys benefit the way you should from it. Um all right. Well, look, in in wrapping up here, we only have a couple minutes left, Jonathan. Um uh we've talked a lot about the the hard assets, the minerals, the natural resources side of things right now. um for um let me put it this way. Folks that are watching who watch Thoughtful Money, you know, episode in, episode out, and they they they like the whole pie. And for those who really also just like the the natural resource side of things, um if they live in Canadia in Canadia in Canada, uh and would like to get some help, uh from you and your firm, you know, help meaning just sort of some direction, some feedback on their personal situation and what they should do given their investment goals. um what are the ways in which RockBlank could help them out? >> Yeah, I know we've had a number of uh listeners, Canadian listeners through thoughtful money uh come to us and uh and we will have you know conversation talk look at their existing portfolios uh see what you know look at their objectives uh get to know them in terms of risk tolerances and uh suggest uh portfolios for them in terms of how best to manage the monies going forward. No pressure there's no cost to that whatsoever. come in um listen to us. Uh we've got some fantastic uh fantastic team members and uh we love talking to the different clients and giving them some long-term options in terms of how they can protect their capital and grow it uh despite the challenges. There's lots of challenges out there, but you can't hide your money under a mattress. You have to have a a program and uh you need to have a a good idea of where you're going. Good good investment strategy. >> All right. Well, look, um, in wrapping up here then, folks, if you'd like to get help from Jonathan and his team there at Rocklink if you live in Canada, or if you'd like to get help from ThoughtfulMoney's endorsed US partners, if you live here in the US, uh, feel free to reach out and talk to them by filling out the very short form at thoughtfulmoney.com. These discussions are free. Uh, it only takes you a couple seconds to fill out that form. There's no commitments involved, as Jonathan just said. They'll just do whatever they can to be as helpful to you as possible. Um, that being said too, folks, don't forget that uh, uh, Jonathan is going to be participating at Thoughtful Money's fall online conference, which is now coming up in just a week and a half. So, if you haven't bought your ticket yet, go buy it now at thoughtfulmoney.com/conference and go quickly. You've missed the early bird discount price, but we are offering a last chance to save discount price this week before ticket prices go up to full price next week. So, get your ticket on discount while you can. And if you are a premium subscriber to Thoughtful Money's Substack, look for the code that I've emailed you that you can use to get an additional $50 off of whatever the ticket price is. Um, Jonathan, thank you so much. I know you had a busy schedule and you shoehorn this in. I really appreciate it. >> Oh, it's wonderful speaking with Adam and I'm looking forward to that conference also in a week and a half. That'll be a wonderful time to to get caught up in all the different issues and the different speakers that you'll have on on that uh on that day. That's that'll be a great day. >> Thanks. Yeah, it's uh this is I say this every year, but I think this is the best faculty we've ever had. Uh and uh it could not be more timely given all the uncertainty going into the new year. So really look forward to it and again thank you for participating. All right, Jonathan, I'll see you there. And everybody else, thanks so much for watching.