Gold vs stocks: which will win by year-end? Ultimate debate with Alex Mashinsky and David Barse
(Kitco News) - In today's macroeconomic environment, investors are looking for both safe haven assets and ways to grow wealth. Two investors, Alex Mashinsky, CEO of Celsius Network, and David Barse, CEO of XOUT Capital, discuss different approaches to achieving those goals.
Barse sees value in equities right now, preferring to remove “loser” stocks from the portfolio rather than construct a portfolio by picking individual “winners.” His XOUT index does exactly that and has so far outperformed the S&P 500 benchmark since inception. Barse sees gold as a way to preserve wealth, not to grow it.
Mashinsky is more bullish on gold, as well as cryptocurrencies. He views gold and bitcoin as the ultimate insurance assets against an economic “Armageddon”, especially during a time when the Federal Reserve has injected historic levels of monetary stimulus into the economy. He dislikes fixed income products during this period of low real rates.
“What was going on in the stock markets over the course of the last few weeks and the month of August entirely was a little unprecedented. Clearly, things like Apple doubling its market cap in such a short period of time was kind of outrageous. But that being said, the only outlook, the only place for folks to go, is in my opinion, stocks for the long term,” Barse said. “There are good stocks and there are bad stocks. What we're trying to do at XOUT is to try and differentiate between those good and bad and focus you all on just excluding the losers.”
On gold, Barse would not be overweight on the metal as an asset class, as it lacks the growth attributes that he is looking for.
“If you're trying to create wealth for the long term, which everyone should be focused on…the only way to do that is to invest for the long term. Investing in gold is going to be a wealth preservation tactic, not necessarily a wealth creation tactic,” he said.
Mashinsky sees more risks ahead in the markets and turns to gold and bitcoin for protection.
Fed stimulus, while it has the potential to protect large businesses will “leave behind the small businesses which will probably suffer or go out of business, which will create a tremendous amount of pain, bankruptcies, and probably another bailout that will be used by the banking system,” Mashinsky said. “So, if you think that printing money and all the stuff I just talked about is nothing to worry about then you should put most of your money in stocks. But, if you think this is a different scenario and you need to buy more insurance, the two items I think are the best way for non-correlated insurance policy are bitcoin and gold.”