{"id":1512,"date":"2024-02-27T11:58:03","date_gmt":"2024-02-27T11:58:03","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/27\/john-hathaway-gold-stocks-ridiculously-cheap-what-will-make-them-move\/"},"modified":"2024-02-27T11:58:03","modified_gmt":"2024-02-27T11:58:03","slug":"john-hathaway-gold-stocks-ridiculously-cheap-what-will-make-them-move","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/27\/john-hathaway-gold-stocks-ridiculously-cheap-what-will-make-them-move\/","title":{"rendered":"John Hathaway: Gold Stocks \u201cRidiculously Cheap,\u201d What Will Make Them Move?"},"content":{"rendered":"

John Hathaway, managing partner at Sprott (TSX:SII,NYSE:SII), shared his thoughts on the disconnect between the gold price and gold stocks, explaining why it\u2019s happening and what could make gold stocks start moving.<\/strong><\/p>\n

In his view, the rise of passive investing is one reason gold stocks have gotten stuck. Hathaway noted that this style of investing dominates the markets today, and it doesn\u2019t favor smaller sectors like precious metals. <\/p>\n

The popularity of exchange-traded funds (ETFs) is another factor. \u2018I think it\u2019s fair to say that the gold-backed ETFs have cannibalized demand for gold-mining equities,\u2019 he said. \u2018Before (gold ETFs existed) it was really difficult for equity investors to position in the macro thesis behind gold \u2026 without owning gold stocks.\u2019 <\/p>\n

The gold price is already historically high, but Hathway said more momentum could push gold stocks up. <\/p>\n

\u2018Is it US$2,100 (per ounce)? Is it US$2,500? Somewhere along the way higher gold prices will generate interest in gold-mining stocks because they\u2019re leveraged to the gold price,\u2019 he said. \u2018At some point a higher gold price will lead to such incredible cashflow and profitability that even this tiny little space will catch somebody\u2019s eye.\u2019 <\/p>\n

Aside from a higher gold price, there are other elements that could drive interest in the gold space. <\/p>\n

\u2018What would that be? I think it would be a reversion to mean, not just in the gold-mining space, but a reversion to mean in the external markets. We all know that the stock market basically has been driven by seven names \u2026 again, if you\u2019re a contrarian it\u2019s an easy trade to make \u2014 sell the Mag 7 like (Stanley) Druckenmiller just did and look for something that\u2019s completely discounted,\u2019 Hathaway said during the conversation. \u2018That\u2019s not just the gold-mining space, you can talk about oil and gas, you can talk about some cyclical names. So I think that\u2019s one thing.\u2019 <\/p>\n

The other is potential issues in the banking system, possibly in terms of commercial real estate. <\/p>\n

\u2018In a way, you could have \u2026 the dot-com crash in 2000, 2001 and the global financial crisis in 2007, 2008 combining to turn consensus investment banking upside down. That\u2019s the sort of thing that would lead investors to look for diversification, which gold represents,\u2019 he said in closing. \u2018I believe that that\u2019s the scenario I would point to for the gold-mining industry and gold itself to come back into favor.\u2019 <\/p>\n

Watch the interview above for more from Hathaway on gold and gold stocks. <\/p>\n

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

John Hathaway, managing partner at Sprott (TSX:SII,NYSE:SII), shared his thoughts on the disconnect between the gold price and gold stocks, explaining why it\u2019s happening and what could make gold stocks start moving. In his view, the rise of passive investing is one reason gold stocks have gotten stuck. Hathaway noted that this style of investing […]<\/p>\n","protected":false},"author":0,"featured_media":1513,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1512"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1512\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/1513"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}