Gold miners offer asymmetric risk-reward
The guest argues that the recent 'hot money flush' in gold miners has created an exceptionally cheap entry point for high-quality producers like Agnico Eagle.
The argument
Larry McDonald explains that gold miners have been battered by shifting Fed rate expectations and emerging market central banks selling gold to raise cash. However, Agnico Eagle is trading at a 40% discount with $6-7B in free cash flow and a $2B share buyback program, presenting a highly asymmetric long opportunity.
The thesis, stress-tested
✓ What validates it
- ✓Agnico Eagle executing its $2 billion share buyback program
- ✓Stabilization or decline in front-end US Treasury yields
▸ Risks discussed
- ▸Rising short-term Treasury yields could continue to pull capital away from gold
- ▸Further gold liquidations by emerging market central banks
Hear it yourself
"Add that 80,000,000,000 Google's, you know, and add to that, Anthropic is coming up. We're gonna have OpenAI coming up. There's about $202,150,000,000,000 of immediate raise. But here's the thing that I'm actually focusing more on, Larry, is six to twelve months after that, all the insiders and the VCs and the early investors in those companies, it's not 200,000,000,000. It's like 3,000,000,000,000 of capital that gets unlocked as those, restricted shares become unrestricted somewhere between six and twelve months after the IPO. It seems to"
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE