A Comment -- General Comments From an Expert (A Commentary)

Payout Ratio Greater than One – Is it Legal? Be careful with them. A lot of oil stocks are over 1. Sometimes they have high payout ratios and it is not going to survive. Don’t buy something where it is well over 1.

Mutual Funds vs. ETFs. Actively Managed ETFs can be very similar to a mutual fund but the ETF is cheaper. ETFs are more liquid.

Markets. On the whole, major miners’ all in cost of gold is $1400/oz. Gold is $1325 an ounce so they are not making money. If you stop sustaining your businesses you can bring costs down but then your business goes away. You need to replace every oz of gold you produce or you lose your reserves. He thinks we are now in a peak discovery period. Unless we see a real increase in the gold price he doesn’t see how we make the discoveries to keep up with production.

Market for financing for Juniors has turned around to some degree. Companies with a decent looking resource are bringing money. For explorers, it is still a really tough environment.

Global outlook for mining 2015/16. If the population increases and we keep using metals, then we need to produce more than we do now. We need to find more deposits than we are currently finding. Metals prices have to go up. 2015/16 looks very good.

Markets. The world is growing including China. If you have a real project. The world is not a bad place. A speculative frenzy just happens when you least expect it.

Markets. Not sure the bottom is in for the mining area. Longer term, bottoms are forming. JX-T is the TSX venture exchange ETF. Uranium at $35 means there is a lot of production that just can’t come out of the ground. Right now the driver is not currency, but geopolitical risk. China is going to grow because they are going to grow, but it will be less than in the past. Demand for commodities will not be what it used to be.

Copper. When China produces better numbers than expected, Copper upticks but it does not stick. He does not see a big demand pull from them in the next couple of years. Investing in hard goods is something China will probably do for 20 years. Copper stocks probably won’t take off in a big way, though.

The catalyst for gold going higher is inflation, not governments printing money. Gold is range trading until that. There will probably be one more dip below $1200.

Income. ZWU is pipelines with covered call overlay but that is one or two sectors. ZWB-T is banks, preferred, and ZWA is dividends from commons with covered call overlay. SDIV-N focuses on global high dividend payers.

Markets. 6 months ago he wanted to see more carnage in the gold sector. He thinks we have seen it, but it is not going to be a ‘v’ shaped bottom. We have 18 months to bottom. The decline we saw from $1900 was natural. Thinks we are in an upward channel. There is an increasing interest by sophisticated investors in the mining sector.

Chris Jones appeared live to comment. URRE is ready to produce but is waiting for the Uranium price to exceed $40. Larry says he likes ETFs for diversification. NLR-N is a diversified ETF that holds this one. URA is mostly the miners and holds it. Prefers the later one. China is constructing 36 new nuclear reactors and 63 are starting globally with 100 on the drawing board. There is a possibility of a restart in Japan in April. URRE-O is fully licensed in Texas and soon will be in Mexico.

Uranium. CCO-T has suggested that the global cost of production is $70 a pound. Sell for $135. Either Uranium goes up to the cost of capital or the lights will go out. It should go up over the next two years. Thinks uranium stocks are ahead of themselves. Long term holds in golds should do fairly well.

He is attracted to the Uranium sector. Fission, Denison, and CCO are good names, but he is not interested in companies who do not have much uranium.

Ecuador. He would rather have political risk than technical risk. Political risk assumes someone is going to steal something from you while technical risk assumes you aren’t even going to find it. Thinks Ecuador is priced for disaster while Canada is priced for perfection.