For gold and silver investors, understanding the underlying fundamentals and economic factors that drive the demand and price direction of the precious metals is critically essential to the success of their portfolio. Peter Spina, the founder and CEO of GoldSeek.com and SilverSeek.com, understood this right around the time when technology was becoming more accessible to everyday people, and at the same time, gold and silver were increasingly becoming viewed as investment assets.
With over 15 years of experience investing in gold and silver, and the mining companies in the space, Spina spends much of his time researching, consulting and investing into gold and silver stocks with a primary focus on micro-caps and junior mining/exploration companies. Equities.com spoke with Spina to get his thoughts on where gold and silver are headed, as well as to learn more about his sites.
Spina will be joining a roster of notable and influential speakers at the upcoming New York Metals and Minerals Investment Conference on May 13-14, 2013 at New York Marriott Marquis.
EQ: To start off, can you tell us about your experience and background in this industry?
Spina: I started investing in gold stocks as a teenager back in the mid ’90s. Around that time, as the internet started to come around, I started goldseek.com. At that age, I started following gold as an investment and as a monetary metal, and began to understand what that all entails. I spent a lot of time understanding what gold is and what it means as a monetary system. That’s where a lot of my interest was sparked, focusing on that relationship with investing and the opportunity that was developing at that time. I spent quite a few years investing in a lot of major mining companies, but also focusing a lot on junior exploration companies as well. I focus a lot of my time in the industry investing in a lot of junior exploration companies, junior producers as well as following the gold and silver markets quite actively.
EQ: Now looking at goldseek.com, and silverseek.com as well, how did these sites help investors navigate through these markets? You, yourself as an investor, can relate to what other investors in this space are looking for. How have these sites evolved as the popularity of these metals have grown over the past decade and a half?
Spina: Goldseek and silverseek help investors keep on top of what’s going on in the precious metals market. The primary focus is to keep investors really up to date with a variety of authors and sources and opinions out there and what is going on. This sites also cater to those who are looking for the up-to-date information, prices charts and so on. Those tools are there for them to get some real-time pulse of what’s happening out there, but our authors help to keep investors up to date as well.
They have evolved quite a bit over the years, especially since the mid ’90s. Technology has really developed, so more tools and different technologies help bring information to investors on a more real-time basis. That’s really the key. Over the years, the information has been able to get out there a lot faster. These sites has been able to become a medium for gold and silver information. Which, especially in the late ’90s and over the last several years, gold wasn’t really well-liked in the mainstream media. In fact, it was downplayed a lot and marked as a barbaric relic. The site has been an area where others have alternative opinions and discuss the ideas and really became a community for a gold and silver investors to get other ideas, which now we are seeing evolve into the mainstream media.
EQ: Focusing on gold and other precious metals, the underlying fundamentals and the economic stimulus strategies haven’t really changed too much, but investors have seem to really move away from this sector as a broader market has edged higher. Do you see this trend continuing even as central banks continue to stimulate the economies?
Spina: Yes, there is definitely a trend from where the buying is coming from. There seems to be this sentiment right now or feeling within the United States that things are improving and there has been more selling and movement out of the precious metals market. But really, when you look at this bull market we are in, this is a long-term secular bull market where we go through these stages and its unfortunate to see people going right back into their old patterns. Central banks continue to enable the debt to keep growing and monetizing this debt at an aggressive rate. If anything, what’s happening right now should be a strong message to those in the market. We just went through a period of instability and what’s going on right now is just repeating what went on in the past.
For those leaving the market of silver and gold, they believe that the problem has been fixed, but the problem has not been fixed. Central banks continue to print money and they are stuck in a trap to continue. To withdraw this monetization at this point would be a huge impact. How can they withdraw that liquidity to the system right now without causing major destruction to the economy? So, they’re stuck in this quantitative easing and money-printing period, and I don’t see how that can stop. The belief is that some how this is all going to correct itself, but in the process, we are adding so much debt and increasing the monetary supply of not just the United States, but many countries around the world.
Most recently with the Japanese, again, you see all this global effort and the economic results from all these trillions of dollars that have been created is very minimal. We are barely growing, and it’s almost stagflationary at this point. So for the central banks to stop printing and devaluing these other paper currencies doesn’t seem to be ending any time soon. That’s all very pro gold and silver. It has been the primary reason why I am an investor in this area. It’s a topic that we cover greatly. Gold and silver is money and as paper currencies lose their trust, integrity, and value as they keep printing more and more of these units, gold and silver will continue to increase its value.
EQ: Now, looking at the junior mining companies, the risk-on sentiment in the market where investors have been moving into stocks hasn’t really been reflected in this area. Why do you think that that is?
Spina: There are several factors that have been playing into it. Some of the main ones are that there hasn’t been really any big discoveries. There have been thousands of these junior companies out there that have attracted a lot of capital and a lot of investment has gone to that sector. But the return on the capital hasn’t been great. You have to really be selective. So I think that has probably been part of it. There hasn’t been any major discoveries and excitement. There have been some consolidations starting up recently.
But with money flowing out of the market, and you have a Newmont Mining Corp. (NEM), for example, with maybe a 10 PE ratio paying them 4-5 percent dividend yield right now, the risk-reward on some of these larger companies versus the risk that one would have to take on these junior companies doesn’t seem so attractive anymore. So as the whole sector comes down off these valuations, it become a lot more attractive. The junior exploration stocks, for the risk that you have to take on, its just not that appealing to a lot of investors. With general markets doing what they are doing right now, we are just at the point where we need some excitement in this sector to return and revive it. But you will find companies that do well even though, overall, things are consolidating in the exploration side. You just have to be very selective. It’s going to be awhile before that speculative capital comes back flooding into the market. It probably will take the price of gold to start moving higher and demonstrate that its going to go higher before that speculative capital is going to want to return.
EQ: Can you talk about your participation in the upcoming New York Metals and Minerals Investment Conference, and particularly, what you are most excited about?
Spina: Sure. I will be presenting and doing a workshop at the New York show. I will have a booth for Goldseek and Silverseek to we will meet with gold and silver attendees. What is most exciting about this show is, their keynote speaker is Ron Paul this year. That is an excellent keynote speaker. He is one of–and I don’t use this term loosely like the mainstream media does–but he’s one of my heroes. He understands and has been an advocate for Americans for a long time in Washington, D.C., and you see him talking about all these issues which has now evolved into the financial monetary crisis we are in right now. He is very well-educated and really understands some of the core problems, so I am quite excited to hear his presentation.
EQ: Do you have any advice for attendees going to the conference?
Spina: Sure. There is an excellent opportunity, especially when the markets are kind of quiet like they are right now. When you go to these conferences, you have an opportunity to meet with some really quality people in the industry, from the mining companies to analysts and other speakers there. I would definitely use that opportunity and time to really learn and meet them, and get some other ideas of what’s going on out there from those who are also interested in gold and silver stocks, which is really one of my main interests. I have a vast majority of my portfolio allocation in gold and silver equities, and I really believe that one of the key factors to investing into these companies is the management. So being able to go to the conference and meet with the management of the companies and see who’s managing these assets is a great opportunity. You can really learn a lot about the companies and decide if its worth your savings; your investment; your capital. Those are really key things for attendees to look at and to take advantage of that opportunity.