저자: PeterSchiff · 외국인
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결론: 피터 시프는 금·은 강세와 달러·미국 국채 위기를 근거로 금광주(특히 주니어 광산주)에 강한 낙관을 보이며, 외국 채권 분산을 권한다. 금·은 및 거시 경고: 과거 2007년 서브프라임 붕괴가 2008년 금융위기 약 1년 전 신호였듯, 현재 금·은 급등(금 약 4,600달러, 은 약 93달러)은 달러 및 미국 국채 위기의 선행 경고라고 주장. 대중이 귀금속 상승을 무시하는 것이 위험 신호라고 봄. 금광주 전망: 금광주는 최근 1년간 약 3배 올랐지만 아직 금 가격 상승만큼 반영되지 않았다고 주장. 금 가격 2배 상승 시 이익은 10배 증가 가능하다는 단순 예시 제시. 유가 60달러 이하로 에너지 비용이 낮아 올해 실적이 매우 좋을 것이라 전망. 은은 금광의 부산물로 비용 상쇄 효과가 크다고 설명. 주니어 광산주: 생산 전 탐사 기업은 레버리지가 크고 아직 가치가 저평가됐다고 봄. 다만 종목 선별(손실 종목 회피)이 핵심이며, 대형사의 인수합병 가능성도 언급. 외국 채권·통화: 미국 달러 약세를 전제로 노르웨이·싱가포르·스위스 채권 등 외국 통화 채권이 보수적 투자자에게 달러 채권보다 나을 수 있다고 주장. 기준은 재정, 생산성, 저부채, 무역흑자 등. 중국·미국 경제 의존도: 중국의 대미 무역은 관세로 20~30% 감소했으나 전체 흑자는 사상 최고 수준이라며 세계가 미국 의존을 줄이는 추세라고 봄. 리스크: 모든 것이 잘못될 수 있으며 위기가 임박했다고 경고. 미국 금융위기 예측 적중 이력을 강조.
다듬은 글
Well, good day everybody. Uh, welcome to the Europeacific Asset Management recording. I'm here with the famous Peter Schiff. Uh Peter, your understanding of financial markets uh is very different from most mainstream and government economists. How did you come to study economics and have this deep understanding that you have?
Well, I have to credit my father for that. I mean, he taught me economics from an early age really from the perspective of the Austrian school. Uh although my father never really described it as Austrian economics. He just described it as economics. uh I later found out that that's where it was it was based.
Uh so by the time I started to be formally introduced to economics let's say in high school I already knew a lot more than my professors and in fact I used to get into a lot of arguments with them because of course they were wrong uh with their mainstream perspective and I was uh you know constantly getting into arguments and that that continued into my college years.
Did they fail you for having different opinions or were they curious? I I still I still got good grades. But you know what I would do? And we used to have blue books back then. I don't know if they still have those now, but I would have economic uh questions and I would give the answer that I knew the professor was looking for as the correct answer.
And then after that, I would say, "By the way, this is the actual answer. This is not the answer for the test. This is just so you know the real answer." So I would always do that. So, all right. Yeah, because I needed to get a good grade. So, I had to give them the correct incorrect answer, right? And then follow it up just to kind of, you know, stick a little needle in the professor to let them know like, "Hey, you're full of shit."
So, you're probably famous with your professors back then. Uh I'm they I'm sure they remember me. I'm I'm sure I I can't remember their names, but I'm sure that anybody who taught econ where I was a student will remember me even though it may have been 50 years ago if they're still alive because these were older guys.
Thank you. So, when you um predicted the housing bubble correctly, did they come out and say, "I taught him everything he knows or do they credit?" I don't think they would even connect the dots. But if you probably told them, "Hey, you remember this student you had one time?" They'd probably because I stood out because there's not a lot of people arguing with their professors.
They're they're not used they're used to getting their asses kissed and everybody is like, "Oh, the professor and you know there's a lot of difference and you know but I I you know I I didn't accept what they were saying." I was always challenging that. Fair enough. And um when did you transition to actually stop managing money for other investors?
Well, pretty much uh out of college. My first job um full-time job was in the investment industry. Uh I wasn't a registered investment adviser. I was as a broker. So I would I would give people recommendations. I started in commodities, commodity futures, options, and then moved over into equities and bonds.
Um and for most of my career, I wasn't, you know, managing the money for a fee. I was giving advice and charging a commission. But we really started doing the asset management business uh around 2010. Okay, that timeline makes sense. And how did you uh come to own Europacific? I started it from scratch pretty much.
Okay. I mean, I actually bought the broker dealer. Well, the original broker dealer, not Europeacific Asset Management, but Europacific Capital. I bought a small broker dealer from a guy that lived in Florida. He had no customers, you know, he had no employees, but he had a BD. So, I bought that and I grew it into what became Europacific Capital, which I eventually sold when I moved to Puerto Rico.
But while I still owned Europacific Capital, I started Europacific Asset Management. And that's the company that I still own. That's the company that, you know, we all work for here in Puerto Rico. Right. Okay. I think it's important that people understand the background of that because we still get lots of confusion as to which companies is is what.
Um, I recently rewatched your 2006 speech where you spoke to all those mortgage mortgage bankers. Yeah. And you correctly predicted everything and they were giving you a lot of push back. I'm glad that that's still allowed to be on YouTube. Um, did anyone from that conference invest with you once you that that that invested in the hedge fund that I was promoting?
So, one guy was smart enough to realize one guy out of 3,000. Yeah. Jeez. Do you think that industry's gotten any better in understanding economics with how they not really but you know when you bring up the the 2008 crisis what is very similar today is that when the subcrime market blew up in ' 07 that was over a year before the 2008 financial crisis but to me the minute that happened I was like okay the crisis is coming because I had been you know warning about subprime and I knew that it was really the weakest link in a chain but that you know the whole chain was going to collapse.
Most people in the industry and of course even at the Fed like you know Ben Bernaki said well don't worry about it it's just contained to subprime it's not a big deal it's not going to spill over into the overall mortgage market or the economy and I knew that was wrong. I knew we were going to have a full-blown financial crisis because I recognized the warning sign that I had been anticipating.
Well, what's happening now with gold and silver, I think, is a similar warning, but not about mortgage credit, but about US sovereign debt, about the dollar. So I think just like the collapse of subprime preceded the financial crisis by about a year, I think what we're seeing now in metals is preceding a dollar crisis and a US sovereign debt crisis maybe around the same amount of time.
So that means something really bad is coming and people need to prepare for it. And that that's what gold and silver is telling you. I mean, if you're if you're smart enough to understand it, just like if you were smart enough to understand what was going on in '07 when the subprime market fell apart, you weren't surprised by the financial crisis.
You, you know, you you knew it was coming. And but the same people that were clueless to that warning are clueless to the precious metals warning. They're just dismissing it. Um maybe they call it a bubble, but they don't think there's anything significant there like, you know, like maybe we should be worried.
Maybe $4,600 gold, maybe $93 silver. Maybe, just maybe, it's a sign that there's a problem, right? Because people are not rushing in to buy gold and silver because everything is great. Yeah. No, absolutely. It's the canary in the cold m gold mine. Um, I wanted to ask you, I mean, you went viral a couple of years ago when the Peter Schiff was right video um was published.
Yeah, unfortunately the original one got taken down, but I mean, how come you're not invited on these mainstream media uh groups anymore? Because I mean, out of anyone who saw it coming, you're the one that should be out there the most right now. Yeah. Well, well, first of all, the original one got taken down, but there are copies and plus I have a copy on my YouTube channel, so you can still see the Peter Schiff was right video.
It just doesn't have the view count that the original had because for some reason the original was removed. I don't know why whoever posted it. Oh, so you don't know who posted it? No, I mean I think the guy might have emailed me at some point. It he was not affiliated with me. He just made it on his own and and posted it,
right? Um and then for some reason took it down. Maybe he took a big bet uh in in your [clears throat] shorting of the everything. But I look I, you know, you would think that since I was so right that the stations that had me on because before the 200 finan financial crisis, I was pretty much a regular on all the financial channels.
I was on, you know, CNBC, Fox, Bloomberg, um, CNN, MSNBC. I was regularly on every week I was on at least one or two of these networks. And now I'm rarely on. I haven't been on CBC, I don't know, 10 years. I can't remember when. And you know, I haven't been on F, you know, I actually finally started to go on Fox News a couple times.
And then the president got mad. He saw me and he he he basically freaked out on on uh Truth Social and called me a uh a loser and a jerk and obviously uh put some pressure on Fox. So, who knows when they'll have be back on now that Trump, you know, you know, took him a task for how dare you have this?
They said, "Who's the Booker that put this jerk on?" Yeah, it's good that he's calmed down, otherwise it's going to nab you like Madura, right? But um yeah, you know, I think that initially I was brought on almost as comic relief, but I was good for ratings and I was at least, you know, there was some argument because everybody else was saying black and I was saying white and it was good television and you know, but I think once I was proven right, I think I had too much credibility for them to make fun of me anymore.
And and I think a lot of people didn't like the Petership was right video because it made everybody else look so foolish. And so I think they were afraid of, you know, creating, you know, material for the next Peter was right video when all these guys are wrong and I'm the only guy that's right. So what they want to do is keep me off their air.
So then when all these problems, you know, blow up, they can say, "Well, no, nobody saw this coming." Yeah. Right. Because nobody on their network saw it coming. Right. But yeah, the people they wouldn't let on. That's why when you look at CNBC, they rarely even talk about gold. And one reason is because none of their viewers own any.
Yeah. They're not smart enough to buy it, even though gold and silver have actually beaten the stock market uh over the last, you know, 25 26 years. Um I've heard you talk about owning foreign bonds as part of a portfolio for certain investors. Um, can you explain why if you're anticipating a falling US dollar and inflation, why someone might want to own a portfolio that includes, you know, Norwegian bonds and Singaporean bonds, Swiss Franks?
I mean, I am not like a big advocate of foreign bonds. I prefer equities. I think that it's worth the risk. Uh, and the yields in general, if you buy dividend paying stocks, um, you're going to get a bigger yield. than bonds. But for people who want less risk, who want to reduce the volatility in their portfolio, who want to have maybe some more dry powder if things go down and they want to keep some money in the equivalent of like cash or, you know, short-term bonds, then you might as well buy the bonds in those currencies instead of buying US dollar.
So for people who are at a point in their life where they need less risk, they need less volatility. Um that's what they should do, right? Instead of buying US treasuries by the equivalent internationally because those currencies I think represent a much better uh value proposition than the dollar. I think that 10 years from now that the the foreign currencies that we own will have retained a lot more of their purchasing power than will the dollar.
Now I think a lot of these foreign currencies will still lose to gold but again you know they are less volatile right and when you look at these currencies are you looking at like their gold reserves their national debt and just yeah we're looking at all of the macroeconomic uh fundamentals that would potentially lead to uh inflation
because that's the the what you want to avoid. You want to have a currency that's not going to be inflated and and so you want to look for the stronger economic fundamentals. Um a more productive economy, a smaller government, less debt, uh budget surpluses or small deficits, trade surpluses are better than trade deficits, you know, viable economies, high savings rates, you know, and and the comp, you know, the countries are there.
you could look around the world and you can pick uh the best countries and own their their credit, right? You don't have to just default go with the US because you happen to live here. Okay, that makes sense. Um we used to have an expression in Australia that when America sneezes, the world catches a cold.
So you don't necessarily think that that might be true this time. No. Well, I think the world is uh you know kind of reducing its dependence on the US and the world was never dependent on us. we actually depended on the world. Uh but if you have a lot of businesses that are set up to provide goods to the United States and if we can't afford to buy the goods that could be disruptive but I think the world right now is moving away from trade with the US.
Look at China. You know Chinese trade with the US is down 20 30% because of the tariffs. The tariffs made Chinese goods more expensive and so we buy fewer Chinese goods. But China's trade surpluses this year is like at a record high despite the big decline in its surplus with the United States because it's now trading more with other countries.
All right. And so the US is less important to China than it was a year or two ago. And I think that trend is going to continue. Okay. And because of that trend um over time the US becomes less important. So if the economy drops, it affects overseas less. And I think that makes sense. Um, now you've been a proponent of owning precious metals for a long time.
Um, can you explain how mining stocks provide leverage to a rising gold and silver price? Yeah, you know, I think that mining stocks right now represent an incredible value even though they've basically tripled in the last year. And people would say, well, Peter, you know, why, you know, why are you telling me to buy gold mining stocks now?
They've just tripled, right? Well, first of all, I didn't wait till now. I've been telling people to buy gold mining stocks from before they tripled, right? So, it's not like I've just discovered them. But the price of gold and silver have also tripled. And you may think, well, okay, well, that makes sense.
It doesn't make sense because a tripling in the price of gold and silver should have a much bigger impact on the price of mining stocks. And I think it will. I think right now Wall Street is kind of in disbelief. They don't really know what to make of this rise. They didn't anticipate it. They don't understand it.
They think maybe it's a bubble. So, they're not willing to ascribe the future income to these mining companies if they believe that this is just a bubble and that prices are going to come crashing down. But if you want to just think of it in in simplistic terms just to kind of understand the dynamic.
Let's say I'm a mining company and I I mine uh gold and I'm just making up prices. These are not real prices and let's say I mine gold and gold is $110 an ounce and it cost me $100 to mine it. I make $10 on every ounce. So I have a $10 profit. Let's say gold doubles from 100 to 200. and my costs in this analysis stay the same.
Right? Now, they probably wouldn't stay the same. They might go up a bit. Uh but let's say gold doubles and my cost of mining it are are held constant. Mhm. Well, now I'm not making $10 an ounce. I'm making $110 an ounce. Right? So, the price of gold doubled, but my profits increase 10fold. Now, if a company's profits go up 10fold, the company itself should be worth 10 times as much because it's generating 10 times the profits.
So you know that's just an illustration right it does you know of the concept there is a lot of leverage that you would expect. So given how much the price of gold has moved up gold stocks should have moved up a lot more. Now, maybe if gold and silver had moved up more slowly, maybe Wall Street might have confidence in the price, but because they got caught napping by this explosion in the price, they just, you know, they're not bidding up these gold stocks yet.
But wait till the earnings start to come in uh this year. Uh the earnings are going to be incredible because oil prices, number one, are low. I mean, we're below $60 a barrel. This is the cheapest oil has really ever been outside of a couple of weeks during co that so this is the cheapest energy mining companies have ever seen relative to the price of the gold they're mining and and so this is great for their earnings but also what a lot of people don't understand is pretty much all the gold mining companies they also mine some silver like they don't mine silver but their earnings are based on what they get from selling their gold.
The way they handle silver is it reduces their costs because it's actually a byproduct of their gold mining. So they sell the silver and then they take the income from the silver and they use it to offset the cost of energy, the cost of labor and stuff like that. Well, the byproduct that was 20 $25 an ounce, you're now close to $100 an ounce.
that's going to make a meaningful dent in the costs of pretty much all the the gold mining companies. Now, there are silver mining companies that predominantly mine silver and obviously for those companies, it's even a bigger impact. Uh and and and the reason you're seeing this strength in the metals is because of a loss of confidence in fiat money, in particular the US dollar.
Uh but everybody who's worried about inflation and currency debasement is buying gold. And it's it's not just speculators. The foreign central banks already decided that they want gold. They don't want to hold dollars. And now investors are waking up. That's where the demand for silver is coming from.
It's probably coming more from individual and institutional investors. Right now I mean you just outlined why the producing gold mines are in a very good situation right now. um the Europa Pacific Gold Fund and the gold mining separately managed accounts at Europacific are well known for having a large exposure um to the junior sector where maybe they're not necessarily producing right now.
Can you explain why it's important for investors to consider earning junior gold and silver miners right now? Yeah. Well, that's where you have incredible leverage. Um because you know these companies are not producing anything right now. But if they bring a mine into production and all of a sudden they go from earning nothing to earning something, um the impact on the share price could be be phenomenal.
And in fact, a lot of the juniors, the real juniors, not, you know, the mid-tiers that are being marketed as juniors, but legitimate uh exploration companies, uh smaller money companies, they did not see as a group the type of appreciation that we saw in in in the mid-tier and senior producers. And that's still an opportunity uh because we have a lot of those in our fund.
And um so you can gain exposure to that sector at a bargain still because I don't think the real potential is priced in. And I think the real key in the juniors is that when you want to get into this segment, you don't want to do that yourself because I think the most important thing about that space is avoiding the losers because, you know, you could buy one of these stocks and it could go to zero even if the price of gold goes way up.
And the key is to make sure that your winners, you know, deliver a lot more than your losers. And I think the best way to do that is with our fund because I think Adrien Day, who manages it, I think he does a great job of knowing which stocks not to buy, which is a lot more important than which ones to buy because now you're not having to make up all those losses on on the winners because you still might have more losers than winners.
But if you can really reduce your losers and then have huge winners, you know, you can make a tremendous amount of money. And I think what's going to happen to a lot of these smaller companies is they're going to get bought by the bigger companies because what are the bigger companies going to do with all this cash?
And you know, a lot of them, you know, they're using up their reserves. They're mining. They need to have future reserves to mine. Well, where are they going to get them? They haven't really invested much in exploration or development over the years. So, how do they expand their reserves? will just go buy some companies that have them and that don't even have the money to um to develop them.
And that's also going to be a big factor in gold because a lot of these smaller companies, the only way they were able to get money from banks was to hedge their production because the bankers said, "We're not going to loan you money. What if gold goes down?" So, a lot of these smaller companies are first forced to hedge.
But when a lot of these small companies are bought up by the big companies that have tons of cash because they're earning a lot of money, they don't have to hedge anything. They they they they don't they're gold companies. They want the risk. And most people who buy gold companies, I'm not worried about the price of gold going down.
I don't I'm buying them because I think the price of gold is going to go up, right? So I want maximum exposure. But when all of a sudden all this gold mining is going on and nobody is hedging, right? That puts a lot more upward pressure on the prices because all the countries, all the companies selling production forward, right, those are sales that could keep the prices down.
So when you have, you know, the big gold companies buying up companies that might have had to hedge, but now they're not going to hedge because they're not doing the expiration themselves. Bareric or Pneumont or these big companies are financing it all out of their free cash flow. Yeah. and you know they may buy back some of their own stock too or maybe they'll increase their dividends but I think a lot of it is going to be buying out these smaller companies big consolidation so I think a lot of the companies that we own in our separately managed accounts and in our fund I think in a few years they will have been acquired by by by larger companies
okay that's and obviously at much higher prices than what what we paid okay that makes sense now in terms of the junior base. I know a lot of money managers avoid it, you know, the more traditional guys cuz there's no earnings per share to look at. They don't have the expertise to look at the or body.
If the stock goes down 50%, they don't know what to do. I mean, what makes uh your fund different where the team knows what to do. Is it experience? Is it just connections or Well, I think up until, you know, even recently, most mainstream advisers don't buy any gold stocks, let alone juniors. I think maybe now that the sector did so well last year, you're going to start to see uh some of these advisors and since they really don't know anything about the sector and since their firm probably doesn't even have an analyst that knows anything about it, they'll probably just buy the indexes, you know, they'll buy the GDX, they'll buy the GDXJ,
uh and you know, so they're not even going to try to outperform it because they don't really know what they're doing. That's where we can really stand out because a you know I mean Adrian's been doing this for 30 40 years, right? I mean there's not that many people around uh that that could say that and and so you know we know we we we we have an advantage there.
You know it's like you know we we it's like an experienced poker player playing with a novice, right? I mean you know you're you're going to be able to win. I mean, there's a a degree of luck involved, but over time, if you're a much better player, you're going to beat the guy that doesn't know what he's doing.
So, I think that, you know, if you're going to stake somebody, it's Adrian. I mean, he's going to beat all these guys that are just now discovering gold stocks for the first time. And, you know, he's probably forgotten more about mining than they know. So, uh, I think we have a real a real advantage, uh, you know, in in playing in this space, you know, given, you know, who we're up against.
Yeah, that makes sense. I mean, this definitely a sector without too much talent. Um, no, I mean, the best and brightest did not go into mining, right? That's not where, you know, because there's no money there. There's no banking meat fees there. I mean, but eventually, yes. I mean, I think that you're going to start to see more people interested in the sector as it really explodes as there's a lot of banking deals to be done because now everybody wants exposure to the gold mining sector.
So, there's a lot of capital that wants to get deployed and that could fund, you know, research and development. You know, we get more investor money uh flowing into the sector. We can get more analyst coverage. And believe me, as analysts start covering the mining stocks, they're going to be putting buys on them.
They're not going to start covering them with cells. I see. I've seen a lot of your managers also looking towards investing in oil and maybe even potentially other commodities like copper, uranium. Why are you bullish on that space if the United States economy is just, you know, going to head into recession or a big inflation problem?
Well, you know, inflation is going to drive up and is driving up all metals prices. I mean, look at copper hit a record high over got above $6 a pound. Look what happened to platinum this year. Platinum is up almost as much as silver. Uh, and that's because these metals are just kept kind of catching up to gold because they weren't going anywhere while gold kept going up all by itself.
Uh, and so now they've they've caught up quickly. Um, but no, I oil is one of the few commodities that's still really cheap and and I you know, I've recently bought more energy stocks personally. I know we've increased our exposure in our strategies. I think agricultural commodities are just starting to break out too.
I think you're going to see a big run there. In inflationary times, all those type of assets are are what you want to own. And look, yes, I think the US is headed for a severe recession, but I think the rest of the world, especially emerging markets, is headed for a real boom. Because I think that subsidizing the United States was a burden that the world had to bear disproportionately the emerging markets.
And I think when the world is relieved of that burden, um, they're going to see an economic boom because I mean, the world has had to produce a lot of extra stuff for Americans to consume and that has come at the expense of their own consumption. And a lot of what the world saves is loaned to America to basically be spent on consumption.
And I believe the rest of the world will be better off trading less with the United States. And so what they end up doing is consuming more of what they produce and investing more of what they save productively in their own economies. So a bust in the US but a boom many other places. And so that's where we want to concentrate our investments where we can profit from that boom.
And our funds, I think, are very well positioned in the companies that will benefit uh from the purchasing power that Americans lose. I see. I've heard people say that, you know, if the US dollar fell and other currencies rose relative to the US dollar that people in third world countries will see their purchasing power increase, so they'll buy more food.
They might buy a car for the first time, upgrade their straw hut to have a tin roof. I mean, would you say that that's sort of the trend that you're trying to capture? Exactly. I mean, there are a lot of things right now that Americans can afford that a lot of other people can't. But when you readjust the exchange rates, all of a sudden it's the Americans who can't afford those things and they become affordable for other people, right?
Because what's produced doesn't change, right? All the production is still there. What changes is who gets to consume and it's whoever can bid the most. But that is a function of exchange rates. And when the dollar goes down and these emerging market currencies, Chinese Juan, you know, goes way up, all of a sudden they outbid us.
And so their standard of living goes up because they can consume more. And the American standard of living goes down. Okay. So we're anticipating the US dollar falling. You're advising people to go buy foreign currencies, foreign stocks, uh, commodities, gold and silver, and gold and silver miners. What would you look for as an indicator to say, "Okay, that trade's done.
Maybe it's time to reverse course and start coming back into the United States." Do you I mean, obviously, we don't see any of those indicators now, but what would you sort of look out for for investors to know? Well, you know, the last time something like that happened was in the early 1980s and the US stock market was very cheap when the Dow was 700.
I think the dividend yield was maybe six or seven%. uh the Dow and gold were about the same price. So obviously the Dow was very cheap and you know Paul Vulkar came in and we bit the bullet. We had 20% interest rates. We had Ronald Reagan coming in government is the problem. You know let's have a lot of reforms.
So we had some major changes in the early 80s that made US investments attractive again after having been a disaster for a decade. Mhm. Uh people made a lot of money in the Japanese stock market, you know, in um you know, commodities [clears throat] in the 1970s, uh you know, and they could have redeployed that in the US financial assets in the early 80s and and and and made a lot of money.
So it's possible that we can have the same type of confluence of events uh that would create a high degree of confidence at the same time where the valuations were good you know and of course when that's the case you know most people will be selling the US stock market they'll be writing its obituaries you know there'll be blood in the streets because things will be really bad but if things are really bad because we've done the right thing uh then you can recognize has the opportunity there.
Now, if things are really bad because we're still doing the wrong thing, then I don't want to, you know, even look at US stocks. So, we have to kind of play it, you know, as it unfolds, you know, and, you know, we want to keep an eye on things. We want to hope for the best, but I'm not going to prematurely, you know, get back on the Titanic unless I know for sure it ain't sinking, you know.
Gotcha. So, we need political structural reform, better valuations. There's a whole host of Yeah. I mean, we need to swallow the medicine. We need to see, you know, a real default and we need to see, you know, high interest rates and and and and de debt defaults and bankruptcies and we need to see people losing money.
We need to see big cuts to government spending. I mean, a lot of, you know, things that are going to be very problematic have to happen in order to set the stage for a real economic, you know, recovery. Okay. Now, I know at Europe Pacific Asset Management, you offer managed accounts. Can you explain what those are and who they might be appropriate for?
Well, you know, I think they're appropriate for most investors. You know, you just have to have obviously a risk tolerance because, you know, the timing, you know, you never know. Uh you're investing in foreign markets. So, you not only have the the fluctuation of the stocks to consider, but of the foreign exchange, so inherently international investing is going to be more volatile than domestic investing.
uh but I think over longer periods of time it's going to be much more profitable and I think the volatility is mainly going to work in our favor meaning bigger gains but obviously you have to be able to uh you know have a tolerance in case that's not the case. Uh but you know the minimums are a little bit higher for the separately managed accounts.
Uh I think it's 250,000 for those. It's actually not that much money anymore considering how much the dollar is losing. Mhm. But we also have WAP programs where the minimum is 50 and that's where we manage you in a portfolio of our five mutual funds. And if people can't afford the 50 for the WAP program, they could just buy the funds themselves, you know, uh and they're available uh directly on our website, Europe Europe Europac.com or any discount broker.
You could buy the funds. So, you know, you I think the minimum is $2,500 per fund. If you have quarter of a million dollars, you can look at the separately managed accounts and then 50,000 if uh qualifies you to get entry into the wrap program and then below that yeah you go directly to the mutual funds.
Can you explain the difference between the eyeshare and um the non-institutional one? Yeah. So the eyeshare is an its load mainly and the load is how the mutual fund industry describes the sales commission. And so if you're going to just, you know, buy the investment, you know, on your own, like you're just listening here, you, you know, you see me talking on an interview and you're like, "Yeah, I want to buy Peter Ship's fund.
I want to buy the gold fund. I want to buy the value fund." Uh, and you just go to Schwab and Fidelity. You want to buy the eye shares, right? Because there's no broker that's helping you. You did it yourself. Why should you pay the front-end commission to Charles Schwab? what they didn't do, they just gave you a platform.
But if you're working with an advisor who's helping you uh create your portfolio, who's recommending this uh fund to you or helping uh work with you, well, which fund should I buy, how much should I put in, then you know they're going to work with the load because that's how the broker would get paid, right?
They're not working for free. So that doesn't go to you, that goes to right go to the to the broker. uh the brokerage firm or the broker the e your Pacific asset management doesn't capture that. Um but there's advisors. Now of course if you're working with a fee only advisor, right? If if a fee only advisor, he's already charging you a fee.
If he decides to put our funds into your account, he's going to go with the the no load. He's not going to double dip. He's not going to take a fee and and a commission. You'd hope so, right? Well, they they're not going to do it. Um, but if it's not a feebased, if the guy only works on commission, then if he doesn't do the load, he doesn't make any money, right?
So, and so if somebody works and they're recommending my funds, I think they should get paid because maybe the clients wouldn't even buy the funds if the broker didn't put it in front of them and and and and convince them to do it and earn that earn that sales load. That's an interesting look into the industry.
Um, so let's say someone had met the minimum for the separate account and the 250,000. What's the difference between them doing that as opposed to just going out and putting that amount of money in the mutual fund? What what's the advantage of a separate account? Well, the separate account there well there are different advantages that you have with an individual account versus being part of a mutual fund, right?
Because if you're in a mutual fund, your money is comingled with a lot of other people's money. Um, and mutual funds, you know, they can have higher expenses uh that a separately managed account won't have, especially when you're talking about larger accounts. um mutual funds, you know, we get redemptions.
Usually when you get redemptions, it's when the market's going down, right? People get scared, they pull their money out uh and then you get inflows. When does the money come in? Oh, things are going up. Now, you know, we have to buy when we get inflows. We sell when we get outflows. So, that could, you know, diminish the return somewhat if we, you know, we we have to sell stuff when it's going down.
We have to buy stuff when it's going up. Now, one of the ways we kind of mitigate that is we hold some cash. And so, we get redemptions, we send cash, we get new money in, we replace the cash, and in which case it doesn't have as big an impact. But if you have your own account, you know, you don't have to worry about that.
You don't have to worry about somebody pulling money out at a bad time, unless you pull your money out at a bad time. So, you're not influenced. And then also, you know, sometimes you may need a tax loss and you may be able to call up your representative and say, "Hey, you know, I need a $30,000 tax loss.
I had a capital gain. Can you sell something at a loss for me?" Now, if you own the mutual fund and the mutual fund is positive, you there's nothing you could do. If you sell it, you're going to have a gain. But if you can go into the individual portfolio, which may be way up on the year, but we can still have two or three stocks that went down, we may be able to harvest that loss for you uh in that separately managed account and then we can buy those stocks back in 30 days or whatever.
We can we can do something to give you a tax loss where you couldn't do that if you had the mutual fund unless the whole account was down. Right. So they'd have their own cost basis. That's a little more personalized, a bit more control. Yeah. you know, so a and and there are people that, you know, that just that that prefer that, too.
But again, the fees will be lower if you if you have a multi-million dollar account, it's definitely lower. If you're coming in with a minimum account, it's not as advantageous because the mutual fees are flat no matter how much you put in there, whereas uh the managed account fees go down as you invest more.
Okay. The percentage the percentage that we charge. That makes sense. Um Peter, it looks like you're setting up for history's biggest I told you so. Uh, is there anything? Yeah, that might be the title of my last book, right? I told you. So, tossing that around. You'll have to write a new one when it's when it's time.
Um, so [clears throat] is there anything you want to tell our investors and and viewers before we sign off? Any last words of wisdom or anything that uh I've forgotten to ask? Uh, I think we've covered a lot. I would just, you know, recommend that that people, you know, just again, uh, hope for the best, but but plan for the for the worst.
You know, Murphy had a law. Anything that can go wrong will, and I think everything that can go wrong will at this point, uh, but we've been kicking the can down the road for so long. So, don't press your luck. Uh, just assume that it's going to happen tomorrow. And if you're a little bit early, it doesn't matter.
If you're a day late, you're too late. Well, there you go, folks. Hold on to your hats. Uh, thanks for joining us. It's been Europe Pacific Asset Management, Mark with Peter Shiff. Thank you. Byebye. Hey, hey, hey. Hey, hey, hey. Hey, hey, hey. Oh
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