Peter Boockvar Insights – Wed 10 Feb, 2021

Peter Boockvar highlights comments made by Bill Dudley regarding inflation

This is an excerpt from the blog of our good friend Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group – The Boock Report. He is highlighting a recent comment from former NY Fed President regarding potential future inflation.

Be sure to visit Peter’s site to keep up to date on the data, comments, and markets that have his attention. Click here to visit Peter’s site.


There is sometimes this refreshing ability of former central bankers in speaking their true mind when they are no longer involved where when in the institution they instead mostly drink the Kool Aid of standard central bank mantra believing they could do no wrong and there are no unintended consequences of note of their policies. Former NY Fed President Bill Dudley has an opinion piece on Bloomberg today titled “Four More Reasons to Worry About US Inflation.” In a recent piece he gave five reasons “to be worried about the risk of an unpleasant surprise, in which inflation returns faster than people expect. I’m now seeing four more.”Β 


The new concerns, 1)”this recovery should be faster than the last” as he said “Slumps brought on by pandemics tend to end faster than those brought on by financial crisis.” 2)”Many households have resources to spend” in part helped by all the government transfer payments. 3)”Companies have money. Financial conditions are extraordinarily accommodative. The US stock market is reaching new heights and bond yields remain usually low, giving enterprises ample opportunity to raise funds for expansion.” 4)”People are starting to expect more inflation. Prices in the market for Treasury securities suggest that investors currently expect the Fed’s preferred inflation measure to average about 2% over the next 10 years. That’s up about half a percentage point from November. This matters, because inflation expectations tend to be an important determinant of actual inflation outcomes.”Β 


His bottom line:
“All this suggest that the Fed, despite its desire to be accommodative and boost employment, might have to pull back on stimulus sooner and with greater force than anticipated to keep inflation in check. Such a move would be a significant surprise, given that in the Fed’s most recent Summary of Economic Projections, the median projection foresees no rate hikes through 2023. This, in turn, would further increase the chances of a volatile market reaction, along the lines of the taper tantrum that the US experienced in 2013.”Β 


It certainly would.Β 

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Comments:
  1. On February 10, 2021 at 11:00 am,
    Charles says:

    GSV – up 14% on 46.7 million trading volume! Wow!

    • On February 10, 2021 at 11:07 am,
      Excelsior says:

      Yep, saw that Charles. I’m all smiles here as I already got positioned in GSV in late Dec on the 29th, and added the 2nd tranche earlier this month on the 4th. It is nice to see the great re-rating get underway…. and then after it has time to appreciate in value, eventually down the road, it is likely that a takeover is on the menu.

      • On February 10, 2021 at 11:14 am,
        Excelsior says:

        (FVL) Freegold Ventures [aka Freefall Airlines] up 21% on the day as well. It has really surged all week long in double digit gains, since our discussions on the weekend show. Personally, I decided to trim back a bit of the FVL position into today’s strength, and moved those funds over into (MTH) Mammoth Gold and (DMR) Damara Gold.

        • On February 10, 2021 at 11:23 am,
          Charles says:

          Nice Ex. I don’t own it, but probably should have bought on the dip.

          • On February 10, 2021 at 11:42 am,
            Excelsior says:

            I had posted a big rant on the weekend blog and earlier this week about the strategy buying the popular stocks of yester-year once they pull back down and people abandon them.

            When I saw disgruntled Freegold bagholders that bought into the Sprott pop of last year, start whining over on some of the other stock boards, and the haters coming out the last two months bashing the company, then it seemed like a good time to start accumulating.

            However, today, I pulled a few profits and trimmed some of my position back to “sell the news”. πŸ˜‰

            _________________________________________

            (FVL) Freegold Intercepts 2.67 g/t Over 93.6 Metres Including 3 Metres of 55.6 g/t Au at Golden Summit

            @newswire on 10 Feb 2021

            https://ceo.ca/@newswire/freegold-intercepts-267-gt-over-936-metres-including

        • On February 10, 2021 at 12:26 pm,
          Excelsior says:

          Added a little more Aris Gold, and trimmed back a little Golden Minerals.

          • On February 10, 2021 at 1:07 pm,
            Excelsior says:

            Since GoldOn continued to sell off 10% more again today, after getting punished by 20% down yesterday, I decided to add a bit more to my position.

            Again, (GLD) is drilling in Red Lake next to Pure Gold’s land package, have 3 holes that are awaiting assays, and still have 3,400 meters of drilling to complete in their phase II program. There is still plenty of room for hitting pay-dirt, and the valuation is far more attractive today for accumulating than it was the end of last year at double the share-price & market cap that some investors had pushed it up to.

            Really looking forward to seeing how the rest of their Phase II exploration program goes.

  2. On February 10, 2021 at 11:04 am,
    Excelsior says:

    I’m not sure what in the world the deal is with New Age Metals (NAM) but it’s up 80% on the day on massive volume, so I sold my position, and used the funds to add a bit to Generation Mining (GENM) and Platinum Group Metals (PLG).

    • On February 10, 2021 at 11:19 am,
      Excelsior says:

      It appears that most of the Palladium and Platinum stocks are up handsomely today, as I’m seeing nice gains in my positions in Group Ten Metals, Grid Metals, Jubilee Platinum, Platinum Group Metals, and also in other stocks I follow in the PGM sector.

      Having said that, I’m still unclear why New Age Metals is surging so high today, as now it is up over 91% . Crazy action!!

      • On February 10, 2021 at 11:24 am,
        Charles says:

        That is crazy! Platinum is going to be another rocket ride.

        • On February 10, 2021 at 11:33 am,
          Excelsior says:

          Agreed. I’ve been constructive on Platinum since the middle of last year (as has OOTB who has been missing in action lately), and it still has a lot of ground to catch up on relative to the moves in Palladium and Gold (where traditionally it has had the premium pricing)

          Platinum futures are up over 5% on the day.

          https://www.investing.com/commodities/platinum

          • On February 10, 2021 at 11:48 am,
            irishtony says:

            Hi Ex…Re. Jerry. He got blocked three weeks ago, he is not sure why. I have been speaking to him over the last couple of days. AL, is aware , & is trying to sort it . He did post TEST on monday , but then when he tried to post a comment , he got blocked again. He has used different accounts , & different handles but they have failed…
            Does anybody out there know what the problem might be ? Can anybody help.

          • On February 10, 2021 at 11:52 am,
            Excelsior says:

            Oh, Thanks IrishT. Well I’m glad it is just that, as I was worried it may be a health related issue or that the deep state cabals had kidnapped him.

            That is a bummer that he is currently blocked, so hopefully Big Al will get that sorted out, as I miss OOTB’s posts and updates.

          • On February 10, 2021 at 11:55 am,
            Excelsior says:

            Here’s another KER contributor that has been MIA lately as well.

            Analyst Chris Temple on The Best Trades for 2021

            MiningStockEducation – Feb 9, 2021

            1:04​ Best trades for 2021?
            3:36​ Oil
            6:22​ Inflation expectations
            14:40​ Uptick rule and short selling
            15:59​ Small-cap portfolio positioning
            18:52​ Mining stock picks
            21:55​ Ecuador’s presidential election a risk to mining investors?

            https://youtu.be/lXehxdOaMc8

          • On February 10, 2021 at 12:57 pm,
            Dick Tracy says:

            Every couple of years Jerry gets sent to Korelin Jail. He doesn’t want to leave because the beer, the movies, and the girls keep him happy and busy. He will be back trust me! LOL! DT

          • On February 10, 2021 at 1:00 pm,
            Excelsior says:

            DT – Haha! I’m not sure what OOTB is in KER jail for this time, but I think you addressed quite well the reasons he likes to go back into the cell. I’m looking forward to seeing him back posting again, whenever the Big Owl figures it all out.

          • On February 10, 2021 at 1:14 pm,
            Dick Tracy says:

            Irish drives to Korelin jail from Dublin with the bail money, but Jerry isn’t ready to leave. He just wants to Party! LOL! DT

          • On February 10, 2021 at 1:41 pm,
            blazesb says:

            I think OOTB is laying low since that picture of him in the capitol building went viral–red,white,blue facepaint, buffalo robe and horns. Hang in there Jerry baby!

          • On February 10, 2021 at 2:07 pm,
            Excelsior says:

            DT & Blazesb – you guys are cracking me up!! πŸ™‚

            Hopefully Jerry is laughing if he is reading this thread.

      • On February 10, 2021 at 4:26 pm,
        David says:

        I bought some New Age and Group Ten at open just because plat/pall up pre-open. Then I went to the grocery store. Then my keyboard went out. Then I did my laundry. Then I saw New Age went way up. That is all I know.

        • On February 10, 2021 at 8:00 pm,
          Excelsior says:

          Sounds like a nice surprise to come back to David.

  3. On February 10, 2021 at 12:28 pm,
    Excelsior says:

    Western Copper & Gold (WRN) – More Aggressive Plan Attracts Investors

    CruxInvestor – Feb 10, 2021

    Interview with Paul West-Sells, President & CEO of Western Copper & Gold Corp.

    “Western Copper and Gold Corporation are focused on developing the Casino project, Canada’s premier copper-gold project. In July 2020 Western Copper and Gold updated the resource estimate at the Casino deposit based on its 2019 drilling results. The updated estimate includes 14.5 million ounces of gold in the measured and indicated category and 6.6 million ounces of gold in the inferred category in addition to 7.6 billion pounds of copper in the measured and indicated category and 3.3 billion pounds of copper in the inferred category.”

    https://youtu.be/g-lEsBwaMv0

    • On February 10, 2021 at 2:06 pm,
      RICHARD/DOC says:

      Look what Jaguar did today as well as GSV—have great positions in both of these stocks—hate to add to GSV but am thinking of it.

      • On February 10, 2021 at 2:11 pm,
        Excelsior says:

        Yes, JAG had a nice move earlier in the day up to $11.26, but faded into the close down to $10.92, but still, it has been doing great lately.

        As for GSV, yes, we had mentioned that up at the top of this blog, and it not only had a huge high-volume day and closed up over 18%, but it shot up another 6.7% in the aftermarket trading. Stellar day!!

        • On February 10, 2021 at 2:31 pm,
          Excelsior says:

          Coming out of the March sector lows, good ole’ JAG ran up more than 8 times from $1.27 to today’s close of $10.92. Quite the move for a gold producer, and really nice to finally see it getting the rerating it has deserved for some time now.

          https://schrts.co/gpubmGqD

      • On February 10, 2021 at 2:14 pm,
        Excelsior says:

        Doc – how about our WRN (covered in the CruxInvestor interview up above)?

        It had a nice move higher today up 12.9% on the US ticker. Loving it!

  4. On February 10, 2021 at 2:37 pm,
    RICHARD/DOC says:

    Ex, my copper stocks are killing it. I’m now looking at KDK.V—any comments. There are some technicals I don’t like with that stock.

    • On February 10, 2021 at 2:58 pm,
      Excelsior says:

      I own shares in Kodiak Copper (with Chris Taylor of Great Bear fame), and they’ve put out some great exploration results in October and November of long copper/gold intercepts, and likely have a whole lot more where that came from.

      Many are eagerly awaiting the results from this years upcoming exploration program, and if they keep hitting like they have, then it will running like it has.

      • On February 10, 2021 at 3:04 pm,
        Excelsior says:

        Kodiak’s share-price and market cap is currently trading half of where it was in the fall, so it looks like much better value now, than it did last Fall when those drill results were coming out. I had mentioned on here first getting positioned on Dec 21st, after it had pulled back quite a bit, and then mentioned I had added more on Jan 19th, but did trim about 20% back on Feb 3rd to pull a few profits from it. For now I’m holding the core position for this year’s program, and if there is any more short term weakness, then I’ll be adding some shares to the position.

        • On February 11, 2021 at 1:31 pm,
          Excelsior says:

          $KDK Kodiak Copper had a nice pop today of over 20%. πŸ™‚

    • On February 10, 2021 at 3:11 pm,
      Excelsior says:

      Doc – have you had a look yet at (GCX) Granite Creek Copper?

      It is run by the Metallic Group of companies (Metallic Minerals & Group Ten are their other plays), and Cory did a nice overview of their projects on Monday.

      I already owned and was a fan of Metallic Minerals for Silver, and Group Ten for Platinum/Palladium/Nickel/Copper, so I figured I needed to complete the set and own Granite Creek as well.

      https://www.gcxcopper.com/site/assets/files/3682/2021-01-19_gcx_presentation_live.pdf

      • On February 10, 2021 at 3:27 pm,
        RICHARD/DOC says:

        I was unaware of it but have been following metallic minerals for awhile waiting to take a position.

        • On February 11, 2021 at 5:43 am,
          Excelsior says:

          (GCX)(GCXXF) Granite Creek Copper Drills 127 meters of 0.85% Copper Equivalent and 4.6m of 7.51% Copper Equivalent at Carmacks/Carmacks North Project in Yukon, Canada

          @accesswire on 11 Feb 2021

          https://ceo.ca/@accesswire/granite-creek-copper-drills-127-meters-of-085-copper

          • On February 11, 2021 at 1:33 pm,
            Excelsior says:

            Only a 2% pop in GCX today on that long copper intercept. Either few were watching this news (which is likely as Granite Creek is still a relatively new and unfollowed company at this point), or the market doesn’t understand that long copper intercepts like that are going to be economic, and are what we want to see in a deposit that is going to be economic to mine and attract a larger partner down the road.

  5. On February 10, 2021 at 3:10 pm,
    RICHARD/DOC says:

    Some of the PM stocks on the weekly charts are starting to form beautiful inverse head/shoulders with more work to be done on the right shoulder. I suspect that the weakness in the metals themselves are not done yet and we can expect continual slow declines in some of the stocks into the spring. That means the move down in GDX is not yet over.

  6. On February 11, 2021 at 9:27 am,
    Glenfidish says:

    I wrote a piece the last few days not sure if you read them as I do yours. But I agree and I’m most certain we will break November low.

    Good luck doc smart to be in cash if you still are.