The uptrend for gold is still intact, said Dr. Nicole Adshead-Bell, director at Cupel Advisory Group. Earlier this month Adshead-Bell spoke to Kitco at the Deutsche Goldmesse show in Frankfurt, Germany. "We're no longer at the very beginnings of a bull market," said Adshead-Bell, adding that the easy money has already been made. "Bull markets have varying degrees of gestation and some of them can be exceptionally long in duration," she said noting 2020 was a "euphoric" year. "Whenever you have that kind of parabolic equity performance, there will always be a correction. That's a very natural thing, and that's a healthy thing." Adshead-Bell said inflation and global uncertainty favors gold. "All of these elements that are circling around the globe are very, very good for gold. I think we'll look back on this year and think that this was an opportune time to enter into the sector."
Kitco news special coverage of the Deutsche gold Messer is brought to you by all three mining. This next interview comes with a warning, Dr. Nicole. As she'd bell is going to make investing in junior sound easy, and it's going to make it sound compelling. Uh, if you get a chance to see Nicole at a resource show, go see her.
Uh, she speaks very clearly and she's great at modeling the sector. Nicole, we're wonderful to have you on Kitco so much for having mane. It's our first live interactions. So it's a refreshing change after the last. We're happy to have you here. Uh, look what you talk about in the junior space. What's so exciting about it is the explosive returns that you can get from it.
What are some recent hits? What if there was somebody that was a generalist, uh, that was, uh, you know, that wanted to understand more about the space? What would you point them at as being something that was recent? That was exciting. Uh, obviously we had fantastic performance, seen a number of discovery plays last year, and that was combined with you for the gold market and for companies in particular, which would come in no surprise to anybody we're up between 602000%.
And those kinds of returns you just don't see in essentially any other sector in that shorter timeframe this year. It's been a little bit more muted. Obviously the gold price is pretty flat. You've had fairly flat performance in the underlying ETS, but there have been some standouts. I think a recent one would be predictive discovery.
It's up around 300% year to date with their discovery and resource. Play in Ghana. So I think one to watch one, I'm going to that I own that has been a great one, vicious, silver. And if you own visually, you got exposed to their spin-out Vishal, a copper, and that's had performance in both of those names.
Year to date has been exceptional as well, 250 to 360 plus percent. Having said that, I think this is what attracts people to the sector. Um, but it's, uh, If you can have 10%, 20% performance and some of these names, which we've seen easily this year, and particularly if you can get in and get out there, aren't too many sectors.
This is a low real interest rate world. You're seeing declines in your bank balance. So it's a sector that I think hits. Interesting buttons from the investment perspective, this again is a cyclical, as you say, like, you know, you want to get into the bottoms and get in the tops and then talking about before you've had this before, but I think it was kind of about the, uh, middle of the last decade, uh, the tans as well, too, when it was really at the bottom.
And then you had a neat, uh, that you're going down and then you're describing what you were actually looking for when you were first getting into this. Sure. So I think it's easy to pick the bottoms and the tops just because of bottoms are, um, the, the emotional fling at the bottom is, is, is capitulation.
It's intense depression. And everybody says it's never going to return. It's a very bad time. I just think it's very September, September. Exactly. It's all over. Make it go away. Uh, 2015, I don't think anybody picked 2016. If you look back over media pundits, nobody thought that the gold price would retrace as rapidly with the associated underlying equity performance in 2016.
But I think when you're at the bottom and at the top, you have to be willing to take risks on both sides and my thesis when I was at the bottom. I think we need the bottom. I don't know how long it will last. So I want to be exposed to those low risk opportunities and, and kind of a classic play at that point in time is leveraged Bader.
And that's those companies that have large ounces in the ground leveraged beta performs very well in an up cycle and also companies that have a decent balance sheet. And from my perspective, that was a balance sheet. corporate GNA and keeping the asset in good standing expenditures for three years, because I figured at some point in the next two years, the price would retrace having said that you had such power bullet performance in 2016.
I was out of all of those by the middle of the year, because obviously a successful investment requires two actions. How do you assess manage. Oh, it's a very good question. My personal motto is good projects. They're not born, they're made. And that comes down to the people side of things. You can have a management team.
That's a poor management team, destroy value in a good asset, and you can have a really good management team create enormous value in a medioric asset. And so how do you go through. Research and process. Uh, I think research is the key word. You have to do the research. So obviously we live in this world where there's a lot of information about people do searches on them.
Do they have a positive track, red direct record or a history? If they're relatively unknown, try and find some people who maybe have worked in before that can give you some personal anecdotes. Uh, Look at there are their interests aligned with you as a shareholder. Do they have skin in the game? They may not necessarily need to own a majority of the company.
You have a significant position, but is it meaningful to them? Uh, are there incentives aligned with yours as a shareholder? Do they have a sensible business strategy? Does it make sense in the context of where you are in the cycle? One thing I think that we don't pay enough attention to is do they understand capitalism?
Uh, the, the, the ability to be able to know when to issue equity and how much to issue, that's an incredible skillset and bankers aren't necessarily your friends in this equation because obviously their incentives are somewhat different to yours. Uh, and just can they do, do they do what they say they're going to do now?
That seems really simple, but very few management teams in our business get that secret sauce. And if you. Present you with trust strategy clearly, and you execute on that strategy. That is you don't negatively surprise your investors. You build trust. Trust is a rare commodity, and then you end up with a trust premium in your share price.
And that's a wonderful thing to have. You've had some success. Uh, how do you sell, when do you sell? Ah, you've obviously read the title of my presentation. Thank you very much for the leading question. It's a really good question. In my experience. Yes. I think there's pertains to retail investors and it also pertains to institutional investors.
Investors is it's much, much easier to buy than it is to sell. And again, every single investment requires two decisions. That's a decision to buy and secondly, the decision to sell. Uh, I think part of the selling issue is there's a lot of emotionality wrapped into that. So it behooves you to remove as much of that emotional and instigate a discipline into your process as much as possible.
And everybody will do this differently. It's about creating, I think, a discipline that works for you. And so I suppose my recommendation would be when you make that decision to buy list out, the reasons why you're buying it, is it a sector play? Is it a commodity cycle, plays a specific Cutlass pay. Also write down what your.
The your expected share price performance is. And I think keep referring to that as you monitor that investment and perhaps monitor is a very key word here too, is you have to work at this. You can't just buy something and then forget about it. So know what you've bought, know why you've bought it, monitor it.
And at the end of the day, understand that you have to sell and sometimes selling a losing position is the hardest thing. Well, I just was, I just was going to, I was going to add one more point and it's not micro, but I think it's a brilliant quote is even if you're down 70%, have the imagination to understand that it could go down another 70%.
So we seem to have this irrational bias towards thinking that it will always retrace back to where we bought it. That simply isn't the case. Unfortunately, lastly, Where are we in this cycle right now? I mean, we, we, we were joking about September right now. Um, I've certainly, we've had a lot of people that have come here right now.
And then they're just saying that, uh, inflation is, um, is, uh, baked in right now. But, uh, just looking on commodity cycles, do you want to, you know, break out a crystal ball and they tell us what you think is what we think you see here. And then we'll see if I'm right in five years. Uh, and then I'll hide if I'm knowing.
We're no longer at the very beginnings of a bull market. That's clear some of those early indicators where that very easy money has been made has occurred, but bull markets have varying degrees of gestation and some of them can be exceptionally long in duration. And I think we've got so euphoric last year, or whenever you have that kind of parable.
Equity performance. There will always be a correction. That's a very natural thing and that's a healthy thing. And in fact, this year to me suggest that will I be in a, in a, I suppose, an upward trending environment over a reasonable period of time. So, I mean, I'm biased, I'm heavily invested in the gold space.
I take what I say with a grain of salt, but the inflation argument, all of these elements that are circling around the globe, but very, very good for gold and obviously very good for the underlying equity performance. So I feel very positive. I think we'll look back on this year and think that this was an opportune time.
To enter into the sector. Having said that, I just want to segue into something that's related and maybe an observation on the gold sector at the moment. There's a lot of complaints about the influence of cryptocurrencies and the fact that cryptocurrencies have taken away. Some of those investors that maybe would have been joined to gold in this kind of environment that we're in.
And I think as we look around the gold industry and the gold council and the leaders. Bye. So I would just be very, very guilty of group think. And I think instead of whingeing about the fact that the cryptocurrencies have taken some market share, and let's not forget there's an excess of 13,000 of them.
So there's arguably some inflation in the cryptocurrency world. Um, let's look at what they're doing. That's attracting those investors and see if we can take some of those learnings to the gold sector. I think one example, for example, ESG. There's such a focus on ESG at the moment in some companies, in my opinion, make a mistake and that's all they talk about at the end of the day, they have a business with which they have to deliver on, but if you compare gold and cryptocurrency, for example, cryptocurrencies use enormous amount of energy yet they're not necessarily adding a net positive to society in the terms of job creation, um, as gold mining companies do in terms of, particularly in the developing world.
Companies will come in and we'll build out roads, infrastructure, Wells in developing communities. There's job creation, pay taxes, pay royalties. And then of course the multiplier effect. And maybe just to end on one point, which I think is an important one, is it. The products of mining are a critical part of our society.
And I think the average person forgets that. And that's because I want us to do some very, very poor job of communicating the foundation of the commodity complex as it pertains to economic growth, as it pertains to injury industrialization. And so. I suppose what I would like to see is mining companies being more proactive about the positive things that we do rather than kind of hiding there in the background, hoping that someone doesn't notice you.
And just as a key point, I was just doing some research on this is from a greenhouse gas emission perspective. The non-ferrous mining complex from the energy use side produced. 0.7% of greenhouse gas emissions. Now, if you compare that to commercial office space, that is 6.6% of all commercial buildings, 6.6% of global emissions.
And you don't see this rhetoric out there about ending all commercial buildings. So I think just trying to present facts in a palatable way will, will, will help us get that message across. Okay. Thanks for speaking with Kitco. Thank you very much for having me Mako. My name is Michael McCray. Uh, stay tuned for more video from Deutsche gold NASA.
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