In a recent interview on Commodity Culture, John Feneck, a Wall Street veteran with a distinguished career at firms like Merrill Lynch and JP Morgan Chase, argued that the current divergence between the price of gold and gold mining stocks presents a compelling buying opportunity.
"If you look back at the 2011-2012 rally," Feneck stated, "gold popped out around 1570 an ounce... Newmont was printing cash and the stock was doing much better in terms of price then, but their margins were much worse... and yet the stock was double plus with the price it is today at 3880." He contends that many large-cap miners have not been efficient capital allocators, but this is beginning to change.
Feneck, who founded and leads Fenwick Consulting, believes that the current market sentiment, which has largely ignored the gold mining sector, creates an opportunity for savvy investors. "I'm nibbling here on down days... because it is the largest holding in GDX Jesse and that is the largest product in mining right," he explained. "You know I was just on the phone with a client yesterday talking silver... there is one stock that I can point out that is a top five holding in all three major ETFs in the silver space so why not own things like that or where you know that as fund flows come into the ETF these stocks have to get bought right."
Beyond the large-cap miners, Feneck sees significant potential in the explorer and developer space. "I mean there's some explorers out there that just look ridiculous right now," he emphasized. "I in no particular order... 1911 gold... their market cap back then was about a billion dollars Jesse it's trading under 20 million right now... that's a 50th of the market cap that it was at 1575 gold... at 10 cents it doesn't need to go back to a billion dollar market cap it can go from 20 million to 60 million and you make a ton of money."
Feneck also expressed bullish sentiment on silver, stating that the gold-to-silver ratio is likely to narrow in 2025. "I think that silver is you know for rabid investors people get behind stocks and they're very loyal and you saw this with the action in 2021 when people made a run on Silver... I think it's going to happen again in 2025 because when you see a market sell-off Jesse this will you know ignite that interest again." He pointed to Pan American Silver (PAAS) and Aftermath Silver (AAG) as potential beneficiaries of a silver rally.
Geopolitical Risks and the "Commodities War"
Feneck also discussed the potential for a "Commodities War" between China and the West, highlighting the growing dependence on China for critical minerals like tungsten. "This is not on anyone's radar in the analyst Community neither of these stocks I'm about to talk about have any analyst coverage and it's like yet they've got a billionaire investing in one they've got a huge mutual fund out of New York City investing in another it's like this is why it takes a lot of time to find like this but when you find them you want to latch on and keep buying dips because until that problem gets resolved which I don't think it's going to get resolved easily these companies have a leg up."
Fenwick Consulting and Investment Approach
Feneck outlined the investment services offered by Fenwick Consulting, including a newsletter and real-time trade updates. He emphasized the importance of disciplined investing, including knowing when to take profits and cut losses. "I make mistakes all the time," he admitted, "it's about understanding the entry point that you had as being too high and then dollar costs averaging down so that your Blended cost basis is reasonable so as the stock rallies you make money right."
Watch the full interview:
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