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Holmes, Lanci, Christian, Morgan, Park, Eibl and Don Coxe: Invest Like The Experts Part III

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By Kitco News
Friday December 20, 2013 11:30 AM

Introducing Kitco News’ 2014 Invest like the Expert Series - Part III, a four-part weekly feature that will showcase investment gurus’ top picks for the coming year. Every Friday in December, a set of experts will be unveiled to share the investments of their choice and the ones they will avoid entirely in 2014.

Each expert was asked how they would invest $10,000 in 2014. Prepare for surprising results from the most well-known names in the industry! 

This week's roster includes CPM’s Jeff Christian, Tiberius’ Christoph Eibl, David Morgan of the Morgan Report, U.S. Global Investors’ Frank Holmes, best-selling author Danielle Park, Don Coxe of Coxe Advisors, and star of Kitco’s RESET Vince Lanci.

Click Here to Invest Like the Experts in 2014 - Part III>>

Part I includes insights from Jim Rickards, Rich Dad’s Robert Kiyosaki, Dennis Gartman of the Gartman Letter, Polar Pacific’s David Bensimon and Kitco’s Jim Wyckoff.

Part II includes insights from Doug Casey, M*A*S*H star Wayne Rogers, Satyajit Das, TheStreet's Stephanie Link and Kitco’s very own Peter Hug.

Part IV included insights from Keith Fitz-Gerald of Money Morning, David Gurwitz of Charles Nenner Research, Peter Grandich of the Grandich Letter, star of Kitco’s Chart This! Gary Wagner, the Aden Sisters, iiTrader’s Rich Ilczyszyn, and former U.S. Congressman Ron Paul.

Stay tuned for the last feature coming out next Friday! Wishing you Happy Holidays and Happy Investing!

Send us your feedback at newsfeedback@kitco.com

CPM's Jeff Christian Shuns Bitcoins

Expert: Jeff Christian

Claim to Fame: Founder and Managing Partner of CPM Group

What type of investor do you consider yourself?
“I am a fundamentally and macro-economically driven value investor.

I keep a lot of my assets in cash equivalents, but always have some diversified precious metals holdings.

I will short assets, a practice that distinguishes me from most other investors. If I think an asset’s fundamentals suggest lower prices, I will buy puts or sell it short.”

Risk averse or risk-taking?
“I see myself as being risk averse, although my broker and others tell me that by standard market and portfolio metrics my risk measures are off the charts.

As some of my old poker pals often used to say, ‘It’s not gambling the way Jeff plays.’ It’s not that I am the sort of person who counts cards; I’m the kind of person who cannot understand why everyone else in the market also is not counting cards.”

How would you invest $10,000 in 2014?  

25% in Stocks
20% in REITs
30% in Cash & Cash Equivalents (short bonds)
25% in Commodity Assets (mostly precious metals)

Where would you avoid putting your money in 2014?
“Bitcoins."

Bitcoin investors seem to have been in a coma the past several decades, and probably slept through their school years.”

What is the best investment advice you ever received?
“Do a thorough analysis of each investment yourself: If you cannot understand the investment proposition and how you are supposed to profit from it, do not make that investment.”

Who do you follow for investment advice?
“I admire John Pierpont Morgan, Bernard Baruch, and the Guggenheim family. I am a data hog, gathering information from everywhere I can, but doing my own analysis and drawing my own conclusions.

I [also] love Ian Campbell’s website for the information and analysis it provides.”

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Tiberius' Christoph Eibl To Avoid Copper in 2014

Expert: Christoph Eibl

Claim to Fame: CEO of Tiberius Asset Management

What type of investor does Eibl consider himself?

“Opportunistic. Basically, we are very much fundamental investors. We’re trying to find value in markets that are just not appropriately pricing commodities.

But we are well aware of the fact that we need to be able to play opportunistically considering that flow and market technical patterns do change markets all the time.

We obviously follow our investment philosophy, which is basically value creation by long-term investments. We’re trying to find the relative value trends over certain time horizons and that basically means we’re not trying to make that buck, the intraday one dollar in oil or gold.”

How would you invest $10,000 in 2014?       

20% in PGMs
20% in Long/Short Commodity Strategies
30% in Mining Equities*
20% in Non-listed, Private Equity, Mining Stocks
10% in Cash

*Eibl said he would avoid gold equities and prefers companies that are mining lead, tin and PGMs.

Where would you avoid putting your money in 2014?
"I'm saying copper. I am saying avoid copper."

What is the best investment advice you ever received?
"The best investment advice I've ever received: Trends can last much longer than you anticipate."

Who do you follow for investment advice?
"I look a lot at behavioral finance. I want to understand what flow is doing, i.e. what speculators are doing, and I'm trying to get an understanding of their investment patterns [and] investment behavior because I think in the short-term that's actually what is driving markets."

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Morgan Staying Away From Real Estate & Illiquid Assets

Expert: David Morgan

Claim To Fame:  Publisher of The Morgan Report and often referred to as the 'Silver Guru'

What type of investor do you consider yourself?
"Professional.

[I] apply technical and fundamental analysis – always looking for value."

How would you invest $10,000 in 2014?       

20% in Precious Metals*
20% in Energy Sector
20% in Cash
20% in Trading**
20% Capital Lending (secured by real assets)

* Morgan said he would split 10% towards owning physical with a 50/50 split between gold & silver and the remaining 10% in mining equities.

** Short-term opportunities determined by the market

Where would you avoid putting your money in 2014?
"Real estate or any investment that cannot be liquid within a few trading days - unless it was a sufficiently small enough percentage of the overall portfolio."

What is the best investment advice you ever received?
"Do not get too high when your investments are high or too low when they are low.

Equal to that one - There is always another opportunity."

Who do you follow for investment advice?
"[There are] too many mentors to name - most from the hard asset community.

[I] will name Harry Browne as his Permanent Portfolio has proven time and again a safe and sane approach to the markets."

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Frank Holmes Sticking To Equities in 2014

Expert: Frank Holmes

Claim to Fame: CEO of U.S. Global Investors and co-author of The Goldwatcher: Demystifying Gold Investing

What type of investor do you consider yourself? 
"I think it's very important to be a contrarian investor and look at areas of the market that may be underappreciated, underloved or overlooked.

To be profitable in investing over the long-term, I believe you must manage your short-term expectations.”

How would you invest $10,000 in 2014?       

25% Resource Companies*
25% International Stocks
25% Blue-chip US Equities
25% Short-term Bonds/High
        Dividend-paying Stocks

* Holmes said that for his resource basket he would hold a modest 5 to 10 percent weighting in gold and gold stocks, with annual rebalancing.

Where would you avoid putting your money in 2014?
"In 2014, I would avoid long-term bonds with maturities that are longer than two years and utilities stocks. What's important for investors to remember is to 'follow the money.' Too often investors get caught up in their political allegiance or parties, focus on the negative news, and lose confidence in the stock market. As a result, they can miss great bull markets.

I often say that money goes where it is treated the best and one great way to follow where the smart money is headed is to pay attention to government policies, as they are often a precursor to change.”

What is the best investment advice you ever received?
“[I follow] football coach Vince Lombardi’s famous line, ‘Practice does not make perfect. Only perfect practice makes perfect.’ You can never have the perfect game because you can’t control the referees or the weather, but you can have the perfect practice.

Successful investing is also like flying a plane.

When it comes to investing, the flight plan is your long-term strategy that details your financial destination. Investors should also have two checklists:  A checklist for buying and another for selling.”

Who do you follow for investment advice?
"I follow and admire many great investment managers such as Warren Buffett, Jim Rogers and George Soros.

[Also,] a long-time friend and mentor is Seymour Schulich.He has a straight-forward approach to the resource industry, and continues to be an inspiration to me to this day."

Click here for more on Frank Holmes and to read his 2014 outlook for the resource sector!

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Danielle Park Not Juggling With Equities In 2014

Expert: Danielle Park

Claim to Fame: Co-founder of Venable Park Investment Counsel & author of best-selling Juggling Dynamite: An insider's wisdom about money management, markets and wealth that lasts

What type of investor do you consider yourself?
"At our firm, we are absolute return, value-focused, tactical asset managers across cash, currencies, commodities, equities and bonds.

We use technical and fundamental indicators to assess price risk and reward prospects over a full market cycle. We seek to outperform a balanced index of stocks and bonds on a net basis over a full market cycle with less volatility and capital risk than buy and hold. 

We are risk averse and capital defensive during frothy parts of the price cycle in order to be liquid and risk-accepting when prices present attractive value.”

How would you invest $10,000 in 2014?       
"Heading into 2014 we are highly defensive against what we measure to be extremely over-valued and over-bought equity, commodity and high yield debt markets."

50% High-quality Bonds*
25% Canadian Cash
25% US Cash

*Park said she looks for undervalued or at-par bonds with fixed maturities between 1 and 5 years.

Where would you avoid putting your money in 2014?
“The asset class I most wish to avoid at this point is equities at cyclical highs in price and particularly U.S. stocks and dividend-paying equities like Canadian financials, REITs and utilities, many of which are at or near all-time record highs.”

What is the best investment advice you ever received?
“Best advice: ‘Never take investment advice from those who are paid to sell us risk.’”

Who do you follow for investment advice?
“I don’t look to anyone for investment advice as we use our own proprietary metrics to take objective risk/reward measurements.”

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Lanci: Buy Mines, Not Miners

Expert: Vince Lanci

Claim to Fame: Founder of Echobay Partners & star of RESET on Kitco News

What type of investor do you consider yourself? 
“Macro cyclical in my long-term portfolio.

Micro asymmetric risk in my shorter term trades.”

Risk Averse or Risk-taking? 
“I think that these days there is no avoiding risk, whether it is risk of poor investment, counter party, or opportunity risk. So I'm a risk taker.

The key is to find risks that are imbalanced in your favor because the counter-party is liquidating for an irrational reason.”  

How would you invest $10,000 in 2014?

30% in Income-generating Housing
20% in Cash*
15% in Domestic Equities
15% in Nat Gas-related Investments
10% in Coffee-related Businesses
5-10% in Precious metals**

* Lanci said his cash holdings would be flexible and used to add to other positions like natural gas, which he said has bottomed.

** Lanci added to always have a portion of your wealth in precious metals – “Inflation hasn’t even started yet.”

Where would you avoid putting your money in 2014?
“Many think the bond bull market is over, and many signs point to that.

…but I’d be careful playing [the] bear side of bonds.

The other broadly speaking is miners. They are still poorly managed overall and their estimates of production cost as a floor on the price of gold are not accurate.

Buy mines, but not miners.”

What is the best investment advice you ever received?
“‘Diversification is often a proxy for mediocrity. Put all your eggs in one basket, and watch that basket as if your life depended on it.’ [This was] advice given to me when I was thinking of starting my first business.

The sub message was, ‘Bet on yourself, invest in you. You are the basket.’”

Who do you follow for investment advice?
“Klarman, Bass, Hendry, Dalio and others like them. I don't often buy what they buy, but look at the macro reasons for their purchases. Then seek something that follows that concept if I agree with it, but in an asset I understand.”

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Twitter & Facebook 'Don't Work For Me': Don Coxe

Expert: Don Coxe

Claim to Fame: Chairman of Coxe Advisors

What type of investor do you consider yourself? 
“I consider myself an aggressive conservative. I believe you have to do some aggressive things to conserve your wealth and what you shouldn’t be aiming at is, trying to get rich quick because with world stock prices almost everywhere are near or at all-time highs. This is not the best time.

 I am basically a value investor but I am projected value. That is, value that would emerge over a longer time horizon. I’m not a trader by nature.”

How would you invest $10,000 in 2014?

25% in US Stocks*
10% in Japanese Stocks
10% in EU Stocks
10% in Commodity Stocks
5% in Gold and Gold Stocks
5% in Emerging Market Stocks
20% in a Bond Portfolio (Duration of under 3 years)
15% in Cash

* Coxe said he emphasizes big cap [US] stocks because small cap stocks are extremely expensive relative to big cap stocks now.

Where would you avoid putting your money in 2014?
“Personal website stocks like Facebook, Twitter and Groupon. They are the kinds of things that you should buy with bitcoins, if you’re given bitcoins.

…I have no way of evaluating whether Twitter is better valued than Facebook or Groupon but all I know is that what these companies have in common is that they don’t make money.

And since I also don’t use any of these personal websites, I have no affection for them. These stocks don’t work for me.”

What is the best investment advice you ever received?
“The best investment advice I ever received was … as a result of meeting with Margaret Thatcher in 1978 and she outlined what she was going to do when she was elected in Britain. And she predicted that Reagan was going to win in 1980.

[She said] between her and Reagan, they were going to impose monetarism and restore capitalism, and that we were going to have therefore tremendous economic growth and they were going to wipe out inflation.

So, I built my career during the ‘70s by having huge exposure to commodity stocks led by gold stocks. So when it became apparent to me that Reagan was going to win the election – [Thatcher] had already won and was doing those things in Britain – I sold all my commodities stocks and my gold stocks and bought zero coupon 20-year bonds, treasuries in Canada. That was the top performing asset class for the next 6 years.”

Who do you follow for investment advice?
“I am eclectic, I am a speed reader, I read a huge range of things and I read a lot of history. Again, a lot of my insights come from going back to reading history.

I’m not an economist; I’m a historian by training. I believe there are huge hinges that occur in history and if you see a hinge occurring, you want to be on the right side of that door.

Thatcher and Reagan were one of the great hinges of history of our time and betting on what they were going to do was a winning bet.”

By Daniela Cambone dcambone@kitco.com and Sarah Benali sbenali@kitco.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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