David Erfle: Take a Breath and Wait Out Panic with Cash | Summary and Q&A

TL;DR

PDAC Day 2 discusses the impact of coronavirus concerns on sentiment and the recent reversal in gold prices.

Key Insights

• 🥺 The coronavirus concerns have affected the PDAC conference, leading to a sparse crowd and companies not attending.
• 💦 The recent drop in gold prices can be attributed to margin calls and profit-taking to cover losses in other areas.
• 🏅 The gold price is expected to bounce back, but further panic selling may occur, causing uncertainty.
• 💁 Site visits provide investors with valuable firsthand information about mining projects, helping them make informed investment decisions.
• ❓ Developing relationships with company management can increase the chances of being invited on site visits.
• ❓ Transparency and honesty from company management are crucial for a successful site visit experience.
• 🧘 During times of uncertainty, maintaining a large cash position and waiting for the panic to subside can help protect wealth.

Transcript

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Questions & Answers

Q: Why did the gold price drop significantly on Friday?

The drop in the gold price was due to margin calls and profit-taking as it had made a significant move after breaking out of a certain level. Traders needed to cover losses elsewhere and opted to sell gold.

Q: Will the gold price return to its previous levels?

The gold price has already rebounded above $1600, but its future movement depends on when central banks will implement significant measures. Market reactions to rate cuts and other actions by central banks will influence the gold price.

Q: What is the value of site visits for investors?

Site visits provide valuable insights into the scale, potential issues, and community impact of mining projects. They allow investors to ask specific questions and gain a better understanding of a company's operations.

Q: How can individual investors participate in site visits?

Getting to know company management and expressing serious interest in investing can lead to invitations for site visits. Building relationships with management teams and engaging in discussions about their projects can increase the chances of being invited.

Q: Are site visits trustworthy, or do companies manipulate the experience?

It is advisable to establish a relationship with management before going on a site visit. By doing so, investors can gain confidence in the transparency and honesty of the company. While companies may present their best aspects, knowing management well beforehand can help gauge their credibility.

Q: What are the tips for investors during the current coronavirus scare?

It is recommended to have a substantial cash position, take a step back, and observe the situation. With high panic and volatility in the markets, it is prudent to wait for the panic to subside before making any significant investment decisions.

Summary & Key Takeaways

• PDAC Day 2 had a sparse crowd due to coronavirus concerns, with many companies not showing up.

• The recent reversal in the gold price, dropping significantly within a short amount of time, can be attributed to margin calls and profit-taking to cover losses.

• The gold price is expected to bounce back, but further panic selling may occur in the future, leading to uncertainty in the markets.