Editor's note: Catch Kitco News' latest OUTLOOK 2014 coverage

Gartman, Rickards, Rich Dad: Experts
Pick Winners & Losers For 2014

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By Kitco News
Friday December 6, 2013 11:30 AM

Introducing Kitco News' Invest Like The Experts Series - Part I, a four-part weekly feature that will showcase investment gurus' top investment picks for the coming year. A new set of experts will be unveiled every Friday in the month of December. Each expert was asked how they would invest $10,000 in 2014 and what they would absolutely avoid!  The experts were also asked to chime in on the best investment advice they ever received. 

This week's roster includes Currency Wars author Jim Rickards, Rich Dad's Robert Kiyosaki, Dennis Gartman of the Gartman Letter, Polar Pacific's David Bensimon and Kitco News' very own Jim Wyckoff.

Prepare for surprising results from the most well-known names in the industry! 

Click Here to Invest Like the Experts in 2014 >>

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 III includes insights from 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.

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.

Wishing you Happy Holidays and Happy Investing!

Send us your feedback at newsfeedback@kitco.com

Rickards to Avoid Equities in 2014

Expert: James G. Rickards

"I love Twitter, I use it all the time but I'm not sure I love the stock." - Rickards

Claim to Fame: Bestselling author of Currency Wars, Senior Managing Director of Tangent Capital

What type of investor does Rickards consider himself?   Rickards says he is an investor who takes a “global macro” approach. “My own approach is try to get the big things right and then the little things will take care of themselves,” he said. “I am not a stock picker [or] someone who drills down on financial statements […] I try to get very large trends correct,” he added.

With regards to his risk appetite, Rickards says he avoids using leverage because the investments he chooses have embedded leverage already. “I am risk-taking in terms of asset selection but probably risk-averse in terms of leverage,” he said. He also said he prefers longer term investments as they are more consistent with his global macro view.

How would you invest $10,000 in 2014?

20% Gold
20% Real estate
20% Cash
20% Fine art
20% Hedge funds

Where would you avoid putting your money in 2014?
“I would try to avoid equities with the exception of companies that own hard assets such as energy, agricultural, transportation,” Rickards said. With the hype surrounding internet company stocks lately, Rickards had one simple message for investors: “I would keep away from [them],” he said.

What is the best investment advice Rickards ever received?
Rickards shares two pieces of advice that he received from MIT professor Andy Lo and Caxton Associates founder, Bruce Kovner. “Andy Lo told me today's alpha is tomorrow's beta. Bruce Kovner told me entry and exit points are just as important as getting the investment thesis right,” he said.

“I’m a gold bull, I recommend gold, I have gold in portfolios […] but it would not have been a lot of fun buying gold at $1,900 an ounce,” Rickards said as he explained Kovner’s words. “I’m not saying that people can call tops and bottoms but you need to think as much about your entry and exit points as much as you do about your investment thesis.”

Who do you follow for investment advice?
“I follow John Makin very closely. I also follow John Hathaway, a very knowledgeable gold investor,” Rickards said. 

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

Gartman: Understand the Fundamentals

Expert: Dennis Gartman

Claim to Fame: Editor and publisher of the widely followed Gartman Letter

What type of investor does Gartman consider himself? Gartman describes himself as being 55% fundamentalist and 45% a technician.  “I want to understand why something should fundamentally be working and then I want to make sure that in fact it is working. I want to understand the fundamentals to be long of corn, or to be short of crude oil, or to be short of gold,” Gartman told Kitco News.

He also describes himself as a risk-taker. “Everything starts out as a short-term investment. I really don’t have a timeframe that I look at, however it is very difficult in our business to look past next Tuesday.”

How would you invest $10,000 in 2014?       

10-15% Apple Stock (AAPL: NASDAQ GS)
10-15% Gold in Yen terms
10-15% Japanese stock market
55-70% "Prosaic, old" dividend paying stocks

Where would you avoid putting your money in 2014?
“I would probably avoid owning the bond market, interest rates are extremely low, I doubt they’re going to get any lower,” he said.

What is the best investment advice Gartman ever received?
“Everybody says cut your losses and let your profits run. I say it this way: ‘let’s do more of the things that have been working and let’s try our best to do less of the things that have not.’”

Gartman also recommends reading “Reminiscences of a Stock Operator” by Edwin Lefèvre.     

By Daniela Cambone dcambone@kitco.com

Wyckoff Eyes Real Estate, Gold in 2014

Expert: Jim Wyckoff

Claim To Fame:  Kitco's Senior Technical Analyst, Proprietor of the "Jim Wyckoff on the Markets" analytical, educational and trading advisory service.

What type of investor do you consider yourself?
"I'm more of a trader and less of an investor--meaning I tend to look at the shorter-term timeframe for my trading decisions and markets analysis."

What type of investment philosophy do you follow?
"Mostly technical, but do not ignore fundamentals, and follow closely trader psychology."

Are you risk averse vs. risk-taking? Do you prefer short-term or long-term investments?
"I'm a risk-taker and a shorter-term trader."

How would you invest $10,000 in 2014?

65% Real Estate--namely land in rural areas of the U.S.
25% Cash
10% Gold and Silver

Where would you avoid putting your money in 2014?
"The stock market."

What is the best investment advice you ever received?
"Any fool can get into a market, but it's the real pros that know how and when to get out."

Who do you follow for investment advice?
"Price trend for the particular timeframe I'm trading."

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

Waiting for Anticipated Lows: Bensimon

Expert: David Bensimon

Claim to Fame: Founder of Polar Pacific, acclaimed forecaster, and author of award-winning Polar Perspectives book

What type of investor do you consider yourself? 
"I am risk-averse in terms of seeking high-probability, low-risk entry and exit points, but am risk-taking in terms of using derivatives and leveraged instruments such as futures and options to execute the calculated view.  The process involves both pre-analysis and on-going assessment of the market as well as transaction discipline and sensible management of the position."

How would you invest $10,000 in 2014?
"My view is that commodities, currencies, and equities will generally have substantial net annual gains for 2014 following first-quarter declines.  I would therefore wait for anticipated lows at specific notable price/time junctures of support in order to go long selected markets.  In terms of portfolio allocation of $10,000 for myself, amongst liquid tradable vehicles I would aim for:"

40% Commodities
40% Equities
20% Currencies

Where would you avoid putting your money in 2014?
"The most important asset class I would avoid in 2014 is Bonds."

What is the best investment advice you ever received?
"The best investment advice I ever learned was to know the right size position for the portfolio and market volatility – large enough to be worth the effort, but small enough to handle the noise and not get stopped out.  This principle applies equally when I had billion-dollar positions as an interbank foreign exchange dealer, and when I have just a single-contract futures position as a private investor."

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

Gold & Silver To Hit New Highs: Rich Dad

Expert: Robert Kiyosaki

Claim to Fame: Author of Best-Seller Rich Dad Poor Dad

What type of investor do you consider yourself?
"I am, first and foremost, an investor who looks for cash flow over capital gains. I would also say that I invest as an entrepreneur. This means I am not a gambler. I want control over the investment. My desire for control means that I rarely invest in the stock market, bond market, or other traditional investment markets.

As an entrepreneur, I invest as a partner with another entrepreneur. Finding good partners is the key to success in anything, in business, in marriage and, especially, in investing.

In simple terms, if I invest in stocks I invest in numbers of shares. When I invest as a partner, I invest for percentages of the business or the venture. The same is true when I invest in real estate or other business startups. I want to invest as a partner, not a shareholder. I want some control over the business."

How would you invest $10,000 in 2014?
"The Rich Dad teachings and philosophies related to investing are grounded in financial education. Learn about different investment vehicles and asset classes and become your own best advisor in terms of the best place or places to put your money. That said, and looking ahead to 2014, this is how I would allocate my investment dollars:

Equities   5%
Real Estates    40%
Precious Metals 25%
Oil  20 %
Cash  10 %

With gold and silver prices heading down, I would be acquiring a larger position in physical gold and silver. When the stock market goes down, panic will set in, and gold and silver are likely to hit new highs."

Where would you avoid putting your money in 2014?
"I would definitely avoid paper assets such as stocks, bonds, mutual funds, and ETFs and the reason is these are paper assets, not real assets. Think of the story of the Three Little Pigs: The first pig built his house out of straw, the second pig built his house out of sticks, and the third pig built his house out of bricks. Here’s my spin on that story: The first pig represents the poor. Poor people build their house out of paper. They work hard for cash and save cash. Their strategy is to work hard, live below their means, and save money. When the big bad wolf appears, huffing and puffing, these pigs are wolf food. The second pig represents the middle class. They build their houses out of   illusions, believing in job security, benefits, owning their home, saving money, and investing in a retirement plan filled with stocks, bonds, mutual funds, and ETFs.

When the big bad wolf, also known as the Next Recession or New Depression, hits sometime between 2015 and 2035, these pigs will also be food for the wolf. The third pig builds his house out of tangible assets. These pigs are entrepreneurs and professional investors who study and invest for their own future, investing in real assets, not paper assets. When the big bad wolf comes, in that 20-year window between 2015 and 2035, those who have built houses of “bricks” are likely to get richer. They become richer because they built with bricks, investing in tangible assets such as real estate, gold, silver, oil, food, and businesses they control. 

Rather than save cash, they save gold and silver. If you must invest in paper, learn to be an options trader. Then you will know how to make money whether the markets are going up or down. I am very concerned about the millions of baby boomers who are counting on the stock market to deliver them a safe, sound, long retirement. When the big bad wolf blows on their portfolios made of paper, chances are the wolf will have a feast. I would rather be building a house of “bricks—gold, silver, oil, food, and businesses… tangible assets—not paper."

What is the best investment advice you ever received?
"Learning how to invest using debt, rather than my own money, is the best advice I ever received.

In 1973, I returned from Vietnam where I served as a pilot in the Marine Corps. My poor dad recommended I go back to school get my MBA, possibly my PhD. My rich dad recommended I take a seminar on real estate. I took the advice of both my Dads. But after I completed my 3-day real estate seminar, I dropped out of the MBA program. It didn’t take me long to realize that my rich dad’s advice was the best advice for me. If I were planning to climb a corporate ladder, the MBA program would have been best for me.  But since I was planning on becoming an entrepreneur and an investor, my rich dad’s advice was best for me. The reason my rich dad suggested I take a real estate course was because I needed to learn how to use debt, rather than my own money, to acquire wealth.

In 1971, President Nixon had taken the U.S. dollar off the gold standard. This meant the dollar was now backed by debt, by U.S. bonds. That is why rich dad suggested I learn to use debt, and why he suggested I learn to invest in real estate."

Who do you follow for investment advice?
"This is a great question, and a very important question. In my opinion, it’s very important for people to seek out the best teachers and advisors. If you have bad teachers and poor advisors, your life will be one of pain and struggle. Think of it this way: If you go to a bad doctor, your health will suffer. If you get bad financial advice, your wealth will suffer.

[People] I follow are: Jim Rogers, author of Hot Commodities; Richard Duncan, author of The Dollar Crisis; Bert Dohmen, editor of The Wellington Letter; Jim Rickards, author of Currency Wars; Richard Russell, editor of Down Theory Letters; and Chris Martenson, author of The Crash Course."

Editor’s Note: This author's answers have been edited from the original. Catch Robert Kiyosaki’s full story here!

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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