Everything & Gold Will Rise in 2018, Except Bitcoin - Expert
Editor's Note: View Kitco News' full 2018 outlook coverage
(Kitco News) - Invest Like The Experts is back but with a twist!
Known as a fan favorite, the Expert Series brings togetherwell-known investors and Kitco regulars to find out where they will be puttingtheir money in 2018.
This time, we asked investor David Erfle how he would invest$100,000 in the mining sector this year. He also shared some investments hewould avoid, including bitcoin.
Check out what he has to say!
Experts: David Erfle
Claim to Fame: Invested proceedsof the sale of his home into the junior mining sector in 2005. He tripled hisinvestment by 2007 and quit his full-time job. He is now founder of juniorminerjunky.com.
How would you invest $100k in the mining sector in 2018?
Erfle said his focus will be on “four sub-sectors of the miningspace” this year:
$30,000 into 3 growth-orientedgold producers (GOP)
$40,000 into 4 gold minedeveloper/explorers, which control high-margin deposits in district scaleland packages, and located in safe jurisdictions
$25,000 into a mix of 5early stage copper, zinc, and precious metal explorers
$5,000 into a U.S. based uranium producer with a solid balance sheet and a tight share structure to holdfor the long-term.
Erfle’s Top 3 Mining Picks?
McEwen Mining - Top gold producer
Sabina Gold & Silver - Top mine developer
Marathon Gold - Top explorer
Why?
“McEwen Mining is cashed up with no debt and the firm is aiming tonearly double production by 2020. CEO Rob McEwen has aligned himself withshareholders by owning 24% of the company,” he explained.
As for Marathon & Sabina, Erfle said both have projects insafe jurisdictions, highlighting that the latter recently struck a C$66 millionstrategic financing deal with Chinese miner Zhaojin International.
What 3 investments would you avoid in 2018? Why?
“I strongly believe the bitcoin mania will end in tears,” he said.
“I also believe interest rates are set to rise dramatically in2018...I would avoid investing in both REITs, and Utilities as well.”
But, more on bitcoin...
“I fear the bitcoin speculative bubble will probably end badlyvery soon, especially for latecomers who are holding the cryptocurrency‘forever’ as many have stated,” Erfle said.
For Erfle, regulation is coming into the sector, which will hurtthe price of most cryptocurrencies.
“Most digital currencies exist in a sort of twilight state justbeyond the grasp of federal regulators, but the IRS is starting to get wise tobitcoin,” Erfle explained. “...regulation will remove the anonymity of bitcoinand other cryptocurrencies and the idea that there is an alternative financialuniverse separate from government.”
His final words: “I fear the bitcoin speculative bubble willprobably end badly very soon, especially for latecomers, who are holding thecryptocurrency ‘forever’ as many have stated.”
What will affect gold most in 2018?
"I believe an increased progression of the European bankingcrisis would have an enormous effect on the gold price,” he said. “...the newbanking rules may put enormous pressure on the Eurozone and, therefore, chasesafe-haven capital into gold and the US dollar.”
But it’s not only Europe gold investors should keep an eye on in2018, Erfle said that U.S. politics will continue to affect the metal’s price.
“I also believe the Republican’s tax package will cause the U.S.economy to boom and inflation to rise, so I see the possibility of USequities, interest rates, and gold all rising together with the US dollar atsome point next year as well,” he added.
If you could describe 2017 in one word, what would it be?
Frustrating, as the miner sector traded sideways in 2017 with goldup over 8%.
By Sarah BenaliFor Kitco News
Follow @SdBenali
sbenali@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.