Vince Lanci: Gold, Silver Mining Stock Funds Seeing Redemptions

#VinceLanci: #Gold, #Silver Mining Stock Funds Seeing Redemptions

As we approach the end of 2023, the gold price is about $100 higher, while silver is lower by about $2. Yet the mining shares have experienced another year of declines, with many of the mining stock indices trading even lower than when gold was at $1650 and silver was at $18 at the bottom of last year’s sell-off.

And in today’s report, Vince Lanci talks about how he’s become aware of 2 significant mining stock funds that are facing redemptions and have been liquidating some of their positions.

He talks about the impact this is having on the market, why they are selling, and whether it’s a matter of a different fundamental view, or a move that’s being enacted due to liquidity purposes.

So with gold and silver stock investors continuing to wonder whether we’ve hit the bottom of the sell-off yet, today’s show provides some insight into the flows that are moving the sector.

To find out more, click to watch this video now!

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Anyone invested right now who’s not making money is licking their wounds some are regrouping some are exiting hello this is the Arcadia economic silver fix and I’m Vince Lany it’s 10:31 Monday you’ll be seeing this at 1 pm let’s get going we have a special report special edition for you this

Morning we are in season and nowhere is it more felt than in the mining industry now sell season which is really tax loss season and I say it’s sell season but it’s also a buy season if you’re short but during sell season you get liquidation of shares for one reason people want their

Money back they want they may want their money back due to poor fund performance they may need their money back due to poor performance in another investment forcing them to liquidate Winners to solve the problem but they need their money back one thing is certain in a year where interest rates have climbed

To 5 and a quar perc making money is both harder to do and harder to keep in times like these good assets get unfairly sold due to Financial Risk not business risk but another way the world is too leveraged and as that leverage shrinks those with the least amount of

Actual Capital are forced to capitulate I’m reminded of Warren Buffett’s uh phrase about when the tide goes out we see who’s naked anyone invested right now who’s not making money is licking their wounds some are regrouping some are exiting in past years you would have been able to

Double Down money was easy to get those days are ending money is expensive now therefore you either manage risk or risk manages you now why am I saying this first off gold fix knows a small fund that played gold on the short Side gold Futures got taken out in the rally a

Couple weeks ago however this fund was so small it was just collateral damage in the rally we had last month due in no small part to China closing the R by taking delivery so we chalked it up to the usual fund blow up nothing special

We didn’t even report on it but it came during cell season or more appropriately in this fun case liquidation season they were buying as they were covering if you are an investment vehicle specializing in miners you have had an even rougher year this makes you vulnerable to

Redemptions at the end of every quarter and that vulnerability grows as the year goes on so if you’re a short bullion player you’re losing money this year if you’re a long mining player you’re losing money this year and that’s what we’re going to talk about now

In a capitulation event which we may be in right now as investors sell everything not tied down either due to poor performance or a need for a cash infusion those Investments get liquidated before year end therefore this is a good time for investors to consider buying shares of

Mines in which they already like the business however there should be no expectations of a hard and fast rally after this is is all done I want to be a little bit more specific for you now what you are looking for is a pristine entry into a 10-year hole that will grow

Over time this is why you must pick a business whose operations you trust liquidations that we’re going through right now can certainly continue into the new year and as rates stay high you can also see these company stocks continue to languish but the price of the stock is not the business if you

Trust the management you start to buy the company now why am I saying all this I’m not a mining person I am a stock person now I have been told by two independent sources that an investment entity well that two investment entities in the precious metal space may be getting hit

With large redemptions my own reconnaissance after this suggests it’s true this is relatively these are relatively small funds but if a small one is getting redemptions right now you can bet a larger one has also been getting at least some redemptions there is a possible capitulation moment coming it may have

Already come but this could be one of those generational opportunities that the kids like to talk about so all you have to ask yourself is do you like the company this is not a time to buy the worst house on the Block because it’s the cheapest this is a time to buy the

Best house on the Block because it is cheap when money flows back into these assets it will be quality buyers first the selling that we have seen has been a result of people throwing in thew all year on mining stocks not necessarily individuals investment funds come in

Chunks so at the end of every quarter they get redemptions I want my money back I don’t like the fund which is fine but there are people who want to sell in an even worse way that are being financially hurt in other areas and those people will sell uh a little bit

More aggressively and I think we may be seeing that now the rally in gold and silver recently didn’t really do much to help those Miners and that’s probably because there was Supply right above the market being offered into it so there are redemptions in the market right now Redemption should end by December

31st time to start picking your spots if you’re looking for an entry for a 10 year hold now when we find out more we’ll tell you but we do have a couple names that we will not share uh because of the confidentiality uh that we’ve promise the sources so obviously that’s a topic

That I know has been on a lot of people’s minds with the way the miners have performed in the last year and a half and appreciate that Vince was digging into this and sharing this today and wanted to get a little more insight so brought him back on and have a few

Questions to ask him to dig into some of the specifics of what’s going on and now we will head over to that all right so we are back here with Vince Lancy and Vince uh I appreciate that you made a little extra time because I thought it

Would be good to get some clarification on some of these things that you’re seeing especially with some funds doing some redemptions and perhaps to start with can you give us any indication of the size of the funds and is that something that likely even outside of

These funds that you’re aware of that is happening elsewhere and perhaps start there uh well there’s a lot that I can’t say and that’s that’s for the for the right reasons but there are some there are some things that I can’t say and I’m happy to come back because you know it’s

It’s the arcade Community okay how big um let’s just say both funds that I know of are under a billion dollars being run under a billion so and they’re more than 250 million so that’s your size 250 million and a billion dollars uh I mean I’m just going to give you

That type of an answer that’s the answer that I can give you um and um they are they’re typical of the industry One Fund is typical of the industry meaning they just own miners you know that’s what they do another fund might have some more um complex strategies like they may be long

Copper and long silver but short gold I don’t know but but they they have more flexibility in their investment so that’s that’s that’s the size of the funds yeah and can can you put that in context with the some of the funds that you look at is especially in the mining space

Of the size of those relative to what else is out there oh you know um I I love to say that I’m an expert in this but I’m not an expert in how much size or capital is allocated in uh the mining itself I think your audience would know

That better than me but I look at these funds I look at these funds not necessarily compared to other funds I look at these funds as as symptomatic of a problem uh in a community now I don’t mean the mining Community I mean in the investment Committee in general uh I

Think uh uh as interest rates have climbed over the last year year what used to be free money is not free anymore so and now I guess this kind of dovetails into why they’re selling investors start to redeem things that they’re making money in you know and

Then when they do that because they need money and then when they do that they start to redeem funds that they’re not making money in to harvest tax losses so uh with regards to how big they are relative uh you know 5 billion doll funds will will

Trade gold and buy 5,000 contracts you know just to do it that’s how they play you know mining is really tricky I don’t know I mean you’re not I mean if you’re talking about mining shares and I know that we are a significant portion of this is mining shares you’re you’re not

Talking about you know trading you’re talking about investing you’re talking about funds that hold that uh sell themselves or promote themselves as you know long-term owners and so that means the people that own these have invested in these funds probably have owned them for years you know you know I know that

Put this way I can’t tell you how big the funds are that compete with them but I can tell you that uh in their Niche they’re pretty well known now I wouldn’t say they’re a household name but I know them and I’m not a mining person so maybe in the mining community

In the mining community be like oh yeah I know who they are so that’s that’s basically it but so there’re F they’re big families of funds that’s that’s why I’m concerned so maybe you have one fund that’s not so big in a big company so maybe you know there’s other funds that

Are going to liquidate so you know have to be careful of a cascading effect to the bigger funds okay and did you have any feel for whether this was tax loss selling or more along the lines of a changing the view of the underlying fundamentals and an investment decision

Yeah I have I have no idea uh uh definitively but I can give you a nice framework to handicap that I believe and I can’t approve this but I think you’re your your viewers uh our viewers I should say because this is silver fix right thank you for having me on um

Should um should have a good idea this there’s been selling for the last six months I mean the the mining markets especially the smaller miners uh have done very poorly relative to the metal itself and if you believe as I do that there’s been selling for the last

There has been because the market hasn’t red for the last six months uh and you believe as I do now that there’s been selling by redeeming funds for the last six months then you would say What’s Happening Now is continuation of what happened last quarter and the quarter

Before that and that is people getting out of the space because they’re not happy with their performance now that’s what happened over over the last six months in my opinion what’s happened in these last 30 days well that’s where I think you might have a combination effect you have this

Whole I’m not happy with miners they’re getting out right but you also have the other Factor that’s the performance one the other factor which I’m not familiar with uh uh I mean I’m familiar with it I’m not I’m not privy to what their reason is but but it’s either one of two

Other reasons one we’re making money in other things and we need to sell these for tax tax losses I personally although I have no evidence don’t think it’s that I think it’s based on the location of the funds I think it’s uh geographic location of the funds I think uh I think

They have investors that have lost money in other assets and are liquidating in multiple different areas not just mining you know what I mean I think they’re just taking it on the chin maybe they bought apple on the highs you know that type of stuff so I will say that you

Know a big portion of this malaise that we’ve had for the last six months speaking as a person understands markets not minor specifically has been a function of the uh uh the slow bleed of people saying I’m done I want to get out I’m done whatever the reason you know

And then whatever the cat the catalyst is someone has been sitting on mining shares maybe there’s a legit reason for it I don’t think so but but people lose patience you know we all complain about it we all just say you know I’m getting beat up every day well some people are

Getting beat up every day and they’re getting beat up long apple and they’re getting beat up long us bonds I mean the US Bond rally makes people liquidate other things so that’s that’s it I don’t think I think this last 30 days has not been mining related I think it has been

We need our cash related that’s what I think okay and that brings me to the next question I know you had a couple charts that can speak to this but obviously one of the things that people in the mining sector wonder and I think it’d be good to get your perspective

Effective to whatever degree possible here but are we close to a bottom is this reach capitulation we’ve been wondering that over the past uh many times over the past year and a half but is there anything based on what you’re looking at that could indicate whether we’ve

Reached that point or where we may be right now for the last say 48 hours I’ve been looking at the uh the Holdings of the uh of the two funds and one ing you know is there an opportunity there and I haven’t decided on that yet uh but one

Of the part of the analysis was not knowing much about the fundamentals you know I need to know the management in order to buy these these companies um I looked at what you’re looking at there I’ll make it a little bit bigger for it for you uh for

Everyone and uh and I pulled up a monthly chart just to get a really you know 10,000 foot up picture and I looked at at it from a monthly point of view from Silver on the left versus the silver Junior Miners and start on the on

Side where it has the uh the yellow arrows that that half of it uh in 2020 silver made a significant low so did the junior miners fine in 2021 silver made a significant high so did the junior miners fine I’m good with that right okay then between 20 21’s

High and today you make a higher low in silver and then you kind of bounce off of it that’s the one where we had all the Indian buy coming in last year right and then you bounce off of it and we’re in cell season uh you know the end of

Cell season I don’t know where we are anymore but I know that we’re not in a normal situation um but silver kind of you know uh balances out now you go over to the miners between the high of 2021 and and the low in silver of 2020 say say December 2022

Um you have a low but if you look at the last six months the silver Jr minor ETF is a new low it’s a new low so I I kind of Mark those off a little bit so if you look over here on the right hand side it’s

Like we made a low we made a low and now we made a another low that’s below this intermediate low meanwhile silver went from here to here silver went from $18 give or take to 22 and change on a bad day and miners have gone from you know 8

To8 basically so so um uh technically everyone will tell you this looks sick right technically that’s what everyone will tell you and it may be sick for another six months uh in general forgetting the whole seasonality of the medals but once you once you know the

Reason uh at least one reason for the selling and you know it’s because people need money not because they don’t the companies are poorly run then you make a decision am I going to buy this house or am I going to uh uh uh wait a while so

Um I will use personally I’ll use technicals if I get in as a a trigger as a tactical thing but you know you find a good mining company you know once you do that that’s the work that I need to do once you do that once you do that you’re

Just like okay fine I don’t care about the worst house on the block that’s getting hammered I want the best house on the block that’s getting less hammered and there’s several reasons for that you don’t go shopping for the cheapest buy now you go shopping for the

Shest thing because when the money comes back into Miners and it will if energy costs stay low among other reasons um people are going to buy quality first so the big money is going to come back and buy quality first now yeah you can buy the little the the little guys and hope

They could take it over right uh and that and there’s nothing wrong with that however if you’re going to hold something for 10 20 years 10 years you want to buy something that’s really good and pretty cheap as opposed to I don’t know what the heck they do and is

Really cheap so uh that’s that’s that’s that’s that’s where I am in my process right now I hope that helps okay and uh last thing I wanted to cover obviously you’ve been talking about how we went through sell season we’re approaching buy season right I believe you were referring more to the

Metals than the miners but just to put that in context uh where we stand on that and see those those two segments differently yeah yeah uh I don’t and I’ll just I’ll tell you what happened uh uh before this year like clockwork uh I wasn’t sure exactly of the precise date

But the last quarter is when liquidation comes in so it starts in September you know the second as the last quarter starts uh it starts in September October and then it will accelerate into November typically and then it will stop sometime around uh Thanksgiving that was like my my signpost Thanksgiving is

Because it’s it’s a holiday people start to flatten their positions out before the holiday and then the buy recommendations come out sometime between after Thanksgiving and before New Year’s so they kind of trickle out where they get leaked out uh so that that that works so typically there’s three there’s three sections there’s

It’s sell season which is what I call it right and there’s buy season and in the middle is it’s a corridor you know it’s an anti room I don’t know you know it’s there’s an overlap in there somewhere and uh uh normally I say feels good but

I don’t want to buy speaking as a Trader feels good but it’s not the deadline yet it feels good okay and then I’ll just start the nibble you start the nibble it’s like say I want to be law on five contracts right I’ll buy one because it

Might be by season I’ll buy too you know you start to buy in over time not necessarily on price but you start buying in over time um this year screwed me up though right this year the market went down to 1830 and I was ecstatic

Ecstatic I was like B goes down to 1830 I’m like this is great and I said this to subscribers I’m like you know go goes down to 1830 and look at silver silver is not doing well but it’s not it’s not you know it’s not getting oversold like

Gold is I’m like this is great this is sell season this is capitulation and now ideally the market just kind of bounces around for a couple weeks and waits and waits you know and waits and then the recommendations come out so you have like historically I always have time to

Get in I have time to think about it but the war started the uh the uh Israeli Hamas War started and we have like a 1830 1930 I was like what that that doesn’t make sense you know I mean it makes sense in terms of the geopolitical

Risk but so but the market gets up to 2,000 I go well I guess this is by season right so I’m like I guess this is by season now I’m not long I want to be long and now I’m hoping for a pullback right I’m hoping for a pullback because

I think there will be buying coming in but I’m nervous because all this buying came in well before it was supposed to and so I said uh maybe I missed the bat on this year right and then but people are talking constantly hitting my feed saying you know miners really are

Struggling this year what’s going on with them and I’ve throw floated some ideas out there uh just half ass not not anything I believe but you know maybe there’s some sort of fear of nationalization or let’s say I’m a Canadian mining company with exposure in Latin America and I’m worried about you

Know the the Latin American country demanding more cost maybe there’s some maybe the miners are being punished for that risk I don’t know like but that’s what I speculated and then I get this news you know two days ago and I say well there you have it there’s your

Answer it’s still cell season I’m wrong so is it cell season and silver you have to look at it that way you have to look at it that way because if the miners are getting hammered then there are some Looney Tunes people out there getting short because the miners suck too I’m

GNA sell silver and buy the miners there are people out there that I used to do that right I’m GNA sell gold and buy the miners and of course that’s why you lose money U and and uh so I believe I believe I think I should go back to the

The the beginning the beginning is we’re in the anti room between buy season and sell between sell season and buy season and I was thinking that okay maybe B season came a little early because of the War uh and because of the uh the um the pending government shutdown but you

Know what thisinformation about the miners makes me say nope we’re we’re okay I mean maybe I want to buy gold at this price maybe I want to buy silver at this price but it says to me like there’s more selling coming in miners so there’s there a bifurcation there uh in

Terms of flows though not necessarily in seasonality all righty well that makes sense and again we’re here on Monday November 13 so seems like we’re getting closer to that point and obviously just a month and a half left in the year so looking forward to potentially a nice

Buy season to end out things with gold up on the year still silver down about $2 but quite quite a choppy year been and in either case appreciate you being with us each Monday to help dig through some of these things and provide a little Clarity and that said we will

Wrap up for today but thanks again for this week’s report Vince Lany silver fix and Vince we’ll look forward to hearing what you have for us next week thank you there there’s something that you asked me off air that I think you wanted me to uh talk about here for for your

Listeners do you remember you were asking about um what part of the what region the were do you want me to talk about that yeah there that the followup that you were is you know what what part of the world well they’re Diversified internationally but the concentration is

Is Canada and Australia that’s the concentration so uh I haven’t drilled down any deeper than that but so that’s I mean it completely makes sense with what’s going on on in the Canadian miners anyway so thank you for having me and uh I’m glad to be here well

Appreciate that Vince and we will see you again next [Applause] week