I'm bullish on metals.
It's like a dark confession as an investment manager to admit that you have developed a fondness for gold and silver. It's bad enough I tend to dwell in sectors that are loathed by the masses, it's quite another when the sector I dwell in is occupied by investors who carry zombie repellent on their belts and a half dozen headlamps in the trunk of their vehicles. In fact, it's one of the few portfolio moves I've made in my career where the decision itself has dictated calls and meetings with clients to explain exactly why I have chosen this path.
There are many factors attracting me to precious metals down here. I discussed them extensively in this recent piece. This is really the first time I have even looked at metals since going angry brown bear on them in 2011 when investors were going gold crazy.
The purpose of this article, however, is not to pound the table on investment attributes of gold and silver down here. I'll be doing that plenty over the next several months.
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After multiple decades in this business I have seen every type of investor rewarded. I have also seen every type of investor destroyed. I have seen paranoid investors outperfom. I have seen brilliant investors underperform. I have seen technology mavens get it absolutely wrong during cycles where they should be shining. I have seen gold bugs with years of gains that would be the envy of most investors.
Point being that there isn't one rhythm for this dance floor. Every single thing in the markets is cyclical, including the punditry that is so common in finance today. The perpetual, hardened bears become absolute rock stars in certain market cycles. Nouriel Roubini and Marc Faber were worshiped as heroes a decade ago. Before Henry Blodget started Business Insider he was a rockstar tech analyst during the internet bubble of the 90s. Then he became an absolute pariah after technology destroyed the economy. Before Gundlach there was Gross. Gundlach will one day be laughed and made fun of when he utters a word. Everybody takes their turn.
Just as investors should open their minds to different sectors of the market, they should also open their minds to different voices in the market. Those voices that are reviled now can be seen as genius level minds in the years ahead. Those voices that are currently considered brilliant will stumble.
Knowing when to listen to what and who is just as important as which sector or stock you choose to invest in. It's all a part of the market ecosystem and the dynamic analysis that should take place at each separate interval of time within each market cycle.
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