INVEST LIKE LANCI...Why Vince Lanci's Betting 100% In Cash Right NowBy Kitco News
Friday December 30, 2016 09:01
Editor's Note: Kitco News has officially launched its 2017 Outlook where we ask if this is the start of a new Raging Bull market. Be sure to catch all our coverage here, which includes gold forecasts, special technical reports and of course, our popular Invest Like The Experts Series. We will also be launching a new feature so be sure to stay tuned!
(Kitco News) – It’s week 3 of the Expert Series, which looks at bringing Kitco News readers a chance to see how some industry experts will be investing in 2017.
This week, we bring you veteran trader and Echobay managing partner Vince Lanci, who says he’s placing all his bets on “cash, at least for the first quarter.”
Expert: Vince Lanci
Claim To Fame: 25-year veteran precious metals and energy fund manager. Owner of Echobay Partners.
How would you invest $500k in 2017?
“This Trump thing has legs. If rates continue to rise, this market is going down. I'm extremely defensive right now. Stock prices are no longer moored to anything,” he said. “Only when the rest of world is long USD will we pull the plug.”
Lanci added that he wouldn’t be surprised to see gold spike if there is a black swan following President-elect Donald Trump’s inauguration in January. “That could also happen after a selloff in stocks - hence cash now,” he said.
However, Lanci is only planning to stick with this strategy for the first quarter. After that, he’ll start looking elsewhere.
”Post a washout, we'd start deploying aggressively in miners, industrial stocks, and physical silver, expecting a QE event,” he said.
Lanci’s also closely watching what happens to oil prices as he says they are the “biggest threat to stock prices after rising rates.”
What will affect gold most in 2017?
It’s all about the dollar, explained Lanci.
“It will remain strong because Trump said so,” he said. “Gold floats around $1,100. It is captured. I don't see any strong move.”
Lanci added that he’d expect rising inflation, if it were to materialize, would also affect gold prices in 2017.
What is your top mining pick for 2017?
“I don't own any miners but if I had to buy any: [Bhp Billiton] (NYSE: BHP), [Vale S.A.] (NYSE: VALE), [Rio Tinto Plc] (NYSE: RIO),” he said. “Sell all the junior miners or buy them on a takeover play by seniors - financing will dry up.”
“Glencore as a speculative flyer I like a lot,” he added.
The three things Lanci looks at when picking a gold company?
“Clean balance sheets, good hedge books and operating leverage.”
What is your New Year’s investment resolution?
From an investment perspective, Lanci suggested completely ignoring “fundamentals and cash flows.” He added that timing knee-jerk market reactions is “where the money is at, sadly.”
But for his New Year investments, Lanci said he might even try checking Twitter more often…
“Follow Trump on Twitter, trade accordingly.”
If you could describe 2016 in one word, what would it be?
Lanci’s 2017 Predictions
“Fed hikes, rates rise, and then Fed starts QE4 simultaneously; War in Syria ends; confidence increases, business flourishes, but money printing continues; Navy is the immediate focus (similar to Reagan); Trump will walk softly (he likes to be liked now that he is in the club); EU dissolution or SA revolution on radar.”
Lanci’s on Gold – The Bottom Line
“The key to gold now is the relentless U.S. dollar,” he said. However, according to Lanci, there are two ways the greenback could lose momentum, which would bode well for gold next year.
For one, any type of surprise or black swan move by Donald Trump. “Complete policy reversal to make America great by weakening the dollar as part of manufacturing push,” he explained.
Second would be if policymakers are forced to devalue the U.S. dollar to stabilize global trade, Lanci suggested.
“The dollar will weaken after rest of world currencies are in gutter,” he said. If this were to happen, Lanci’s final say was:
“BUY GOLD, buy stocks.”