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Massive Investment Mistakes and Lucrative Opportunities: Q&A with Doug Casey Part 2

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March 3, 2018

Editor’s Note: Yesterday, you received Part 1 of the Q&A with legendary speculator Doug Casey, the Chairman of Casey Research. Below is the second part of the interview series where Doug and Marin talk about risk mitigation in junior markets, two cryptocurrency plays that they’re invested in, what markets Doug Casey wants to be completely out of, and a junior silver company they’re investing in.

Marin Katusa:
Okay. How does Doug Casey manage his risk mitigation?

Doug Casey:
Not well. Not well but you want to take some off because some of these deals will blow up for all kinds of reasons so take your money off the table pretty soon after the thing…

Marin Katusa:
So do as you say not do as you do.

Doug Casey:
That’s right.

Marin Katusa:
I’ll share an interesting Doug Casey story that has been repeated…

There are patterns to success and patterns to bad habits. Over a year ago, Doug and I went out to the Boeing plant. We invested in this little junior airline company, Doug and I take equal positions in companies and Doug owned about nine percent of the company. You invested a couple hundred grand a few years back in the company like I did directly. And after the Boeing site tour, Doug and I knew we had a winner. One problem, Doug doesn’t know where his certs are. So we go through the whole process of getting his certs re-issued and it takes months. Problem solved right?

Doug Casey:
No, I couldn’t find them. I actually didn’t know where the damn certs were.

Marin Katusa:
But this is the best part of the story…

Fast forward to a few months ago, and the stock is on a tear, brokers are calling looking for stock, it’s good practice to make the broker happy and take his cash and give him your stock. So, it should be an easy process, except I call Doug to tell him a bunch of brokers wants paper and Doug doesn’t know where his certs are. He had over a million dollars sitting there. I’m like, “Doug make sure you take some money off the table“.

He goes, “I don’t know where my certs are”. And you found them eventually through a gauntlet of emails in a brokerage account that you didn’t even know you had.

Doug Casey:
Not only that. I had something at Haywood that I’d forgotten that I had that was another…

Marin Katusa:
Oh, that was Alterra… Doug and I are at a dinner at the Cambridge/Katusa Summit in San Francisco, and Doug has a million dollars in Alterra that he didn’t remember that he had at Haywood. We’re sitting for dinner and all of us are talking about how Ross Beaty did it again and delivered a nice win for Alterra shareholders. Doug says, “You didn’t put me in that one Marin“. I respond in shock, as it’s one of the largest holdings in our fund and our personal accounts,  “What are you talking about. It’s in your Haywood account“. Must be nice having a Marin around!

So please, when you buy stuff, actively manage your portfolio because the stockbroker… as important as you think you are, and unless you’re in that top twenty percent of his assets under management… he’s not going to be phoning you to take your money off the table. You have to be responsible for your own portfolio. And when to buy and sell.

Doug Casey:
Yes, because when a bear market comes you know how ugly it can be and you don’t want to be in a position of looking under the couch’s cushions for nickels and dimes because you can’t find the rest of your money.

Marin Katusa:
Okay. The last few minutes are open floor questions to Doug Casey, and I appreciate Doug for flying around the world for to make this show. The microphone is there. Please don’t be shy.

Doug Casey:
Everybody here knows that there are no cosmic answers that can be given to almost any questions. I respect your wisdom.

Marin Katusa:
Are there any questions here for Doug?

[Audience]
Do you own any cryptocurrencies?

Doug Casey:
I do. I was given a Bitcoin, a physical Bitcoin, which exist incidentally, back in twenty thirteen and it was worth about thirteen to fourteen dollars at the time.

I bought the guy lunch and he said here have one of these. I still have that Bitcoin today, incidentally. This last summer, I started buying these things and they’ve treated me very, very well. I’ve also gotten into a couple of Bitcoin mining companies.

Marin Katusa:
So which ones?

Doug Casey:
I’ve got a big position in HIVE that I took also early in last summer and also own a big position in Fortress Blockchain (FORT.V). But it’s late in the day for these things, so please use caution.

So yeah. I got involved in those and I got involved in the marijuana space, also.

Marin Katusa:
Can you talk about what you’re doing with John McAfee or is it too early?

Doug Casey:
Yeah. You know who John McAfee is. He’s the founder and the original guy to develop anti-virus software for computers and he’s something of a wild man. If you go on YouTube and you put in John McAfee you’ll find that he’s fun to hang around with. John and I are going off to the Solomon Islands about a month from now on a wild and crazy adventure.

Marin Katusa:
There may be a blockchain deal out of it?

Doug Casey:
Well, there might be. He personally thinks that bitcoin is going to a million dollars but I think he’s smoking something.

Marin Katusa:
The marijuana that you’re selling him?

Doug Casey:
That’s right. I think it’s late in the game for these cryptocurrencies.

Marin Katusa:
Any other questions from the audience.

Hey, Terry Solomon is here. He’s a legend in the business from the brokerage side. Terry, why don’t you stand up? He’s the one who brokered the deal between Pan American and New Pacific (NUAG.V) which was one Frank Holmes’ top picks this morning.

Terry, what question do you have for Doug Casey? I love putting these veteran industry giants on the spot. This will be the last question of the night for this workshop.

[Terry Solomon]
Thank you, Marin, for your kind words. Doug, what do you feel is the best commodity sector to invest in today? Copper? Gold?

Doug Casey:
Well, you put your finger on it because everything in the whole world today is overpriced and you’d think that that would be metaphysically impossible for everything to be overpriced.

I think I don’t want to be in the general stock market. I absolutely don’t want to be in anything like bonds, that’s a hyper bubble or real estate here in Vancouver. Listen, I wish I’d never sold my house in Vancouver. I tripled my money twenty years ago and if I’d held on it today I would have gotten another five to one on the thing. So don’t ask me about Vancouver real estate but I wouldn’t be a buyer at this point. So what can you buy? The only things that are cheap are commodities and the metals, which you mentioned, are one of them. Nobody you know, nobody cares. They all peaked seven years ago in 2011. It’s been a long ugly bear market so the metals and the metal stocks are actually very cheap.

The other thing is agricultural commodities, also commodities, are very, very cheap. Now there are other things like the shipping stocks, they’re absolutely in the toilet. The offshore drilling stocks, you look at their charts it looks like an aircraft that’s been hit by flak. Those two industries are both very interesting. They’re not going to go away.

Marin Katusa:
But what’s your favorite commodity in the metal space?

Doug Casey:
In the metal space… Actually, I hate to say this because the guys that promote silver tend to be kind of religious nuts. But actually, silver. I think in real terms silver is once again very, very cheap and the fundamentals are better than gold. It’s different than gold for different reasons. If I had to put my finger on one metallic commodity… well uranium is a metallic commodity, that’s the other one. Silver and uranium.

Marin Katusa:
Interesting in our fund we own a lot of New Pacific which is where Terry brokered the deal, actually, and they’ve got a massive, massive project in Bolivia that I think is gonna attract a lot of attention. Silver Corp is pretty cheap too and one I’m looking to build a big position in. You never bet against Rui. He is a machine. So smart, hardworking and uber successful.

Doug Casey:
And of course there are all of these little weird metals but they’re very hard to invest in.

Marin Katusa:
That’s it for today. We have the next company coming up. Thank you very much.

Note: The entire video interview can be found right here

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