Timmins Gold

On site at present, Timmins Gold's mining and crushing operations are continuing with the available Komatsu shovel and six Caterpillar 100 ton trucks until the full mining fleet arrives. Over 100,000 metric tonnes of ore have been stacked on the heap leach pads and gold leaching has begun.

almost 11 years ago

Billionaire Eric Sprott: “You Have To Be A Buyer When People Are Non-Believers”

December 19, 2013 | By Tekoa Da Silva

in Share7

Full Interview Transcript Available Here

I had the opportunity recently to reconnect with Eric Sprott, Chief Executive Officer and Senior Portfolio Manager of Sprott Asset Management.

It was a powerful conversation as Eric spoke to the key philosophies which resulted in him becoming a billionaire; which market offers the greatest gain potential from here, as well as the most important rule precious metals investors need to keep in mind during these tough market periods.

When asked of the investment philosophy which resulted in him becoming a billionaire, Eric explained that, “You have to be a buyer when people are non-believers. You have to believe in something based on data that says you’re right when the world will tell you you’re wrong, because when the world says you’re wrong and you’re right, you know that the return will be outsized because no one is there. It’s like buying gold stocks in 2000 which I did to a very large extent. The HUI index was at 35 and it went to over 600. It went up 1700% in eight years. And that’s because everyone was against it. It was like a killing field for an investor to go in and buy things cheap and I really believe it’s kind of [a similar] opportunity again today.”

Reflecting on the level of participation he sees coming from institutional investors in this market, Eric said, “There’s no interest. Maybe 2%-3% will listen and maybe 5% of those will act. So it’s a very, very, very small world these days of people who are interested in gold…it’s almost like you have the plague when you’re talking about gold, even though of course over the last 13 years it has been an awesome investment. It just hasn’t been in the last two.”

When asked what the trigger will be to change market sentiment dramatically, Eric said, “Once gold starts looking like, ‘Hold it now—maybe that secular bull market wasn’t over?’…All will be forgotten quickly. If the price of gold is $2000 Tekoa, you would not believe what the sentiment will be…They’ll all come in…you will have everyone trying to get through the same door at the same time and it could be quite stunning…stocks will go up multi ten thousands of percent…because not only is the price of the product going up but everyone get[s] excited about discoveries and it just gets crazy.”

That pendulum of sentiment extreme is, “One of the beauties of the natural resource area,” Eric added, “the gains that can be made are so outsized versus the norm of normal investing, and that’s why I’m kind of attracted to it. I am in it for the reward and I will take that risk to get that reward.”

As a final comment on the most important rule headstrong metals bulls need to keep in mind during these tough markets, Eric concluded that, “If you believe you’re right and the data says hold your ground—you hold your ground. Normally there’s a pretty big payday at the end.”

—

Once again, this was a powerful interview, conducted with one of the world’s top asset managers. It is required listening for serious investors and market students.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to to your desktop:

>>Interview with Eric Sprott (MP3)

For more information about Sprott’s award-winning investment professionals and their market insights, visit www.sprott.com or contact invest@sprott.com.