April 25, 2020
Collin Kettell
Palisades Goldcorp Ltd.
collin@palisades.ca
Bull markets reach their peaks when there are no suckers left on the sidelines.
A 1996 FORTUNE Magazine article titled When the Shoeshine Boys Talk Stocks It was a Great Sell Signal in 1929 tells the story of Joe Kennedy, a famous investor of his day. Joe Kennedy wrote of his experience leading up to the Great Depression –
“Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day’s financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929.”
Taking this example into modern day… When your uber driver starts talking up Bitcoin, or your grandparents extoll the benefits of cannabis equities, your gut reaction to jump ship may be one worth noting.
As I have written about in my latest articles, gold and gold stocks are emerging from a prolonged bear market. Already, the narrative is beginning to catch airwaves, with Bank of America recently calling for $3,000 gold.
But how many investors are paying attention? How many people actually hold gold stocks in their portfolio?
The answer is shockingly low and that is despite industry bellwethers Barrick (NASDAQ:GOLD) and Newmont (NYSE:NEM) breaking out to multi-year highs!
Trading platform Robinhood offers investors a peek inside the portfolios of its 10-million users. The platform openly reports the number of accounts that own a particular equity.
Let’s take a look at the very top of the list as of April 23–
- Aurora Cannabis (NASDAQ:ACB) – 950,649 users
- Ford Motors (NYSE:F) – 762,773 users
- General Electric (NYSE:GE) – 637,257
- Disney (NYSE:DIS) – 493,166
- Go Pro (NASDAQ:GPRO) – 431,120
It is shocking that after a 90% decline, Aurora Cannabis continues to be the most widely held equity – a bad sign for the cannabis space, as few suckers remain untapped.
So how do gold stocks stack up? Looking at the top three gold related ETFS, as well as Barrick and Newmont, the numbers remain decisively low.
The SPDR Gold Trust (NYSE:GLD) is held by 18,172 accounts, while the VanEck Gold Miners ETF (NYSE:GDX) and VanEck Junior Gold Miners ETF (NYSE:GDXJ) are held by 9,259 and 2,578 accounts, respectively.
Barrick Gold (NYSE:GOLD) is held by 24,808 users and Newmont (NYSE:NEM) just 5,338! Note, in the case of Barrick, the very real benefit of a great ticker symbol.
The gold trade is far from crowded. Just imagine what prices will look like when 100,000 Robinhood users decide to buy gold stocks.
This is just another indicator that we are in the very nascent stage of a gold bull market. Keep your eyes on sentiment and when your Uber driver tells you to buy Palisades Goldcorp, it may be time to hit the bid.
Palisades Goldcorp is not yet public, but our goal is to list on the Toronto Venture Exchange later this year. If you’d like to find out more about our $150M portfolio of junior resource equities, please visit www.palisades.ca.
Until next week,
Collin Kettell
Founder & Executive Chairman
Palisades Goldcorp Ltd.
