67 WALL STREET, New York - January 3, 2014 - The Wall Street Transcript has just published its Gold and Precious Metals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Precious Metals - Lower Gold Price Environment - Precious Metals Exploration and Production - Increasing Capital Expenditures - Emerging Markets Silver Consumption - Mining Safety and Environmental Concerns - Gold Production Cost Structures - Gold Price Stabilization
Companies include: AngloGold Ashanti Ltd. (AU), Goldcorp Inc. (GG), Newmont Mining Corp. (NEM) and many others.
In the following excerpt from the Gold and Precious Metals Report, a highly experienced gold and precious metals portfolio manager discusses the outlook for the sector for investors and his top picks for 2014:
TWST: Please start with a snapshot of the firm as well as of the OCM Gold Fund as a means of introduction.
Mr. Orrell: Orrell Capital was formed in the early 1990s as a boutique investment management firm that specializes in the precious metals mining sector. The firm was founded on the belief that gold is a monetary asset that would benefit from ongoing debasement of the dollar, and that investors would need a hedge. That's the basis for the foundation of the firm and our mutual fund, the OCM Gold Fund. We currently manage approximately $100 million in gold-related assets, which includes the mutual fund.
TWST: Would you describe the overall strategy for the fund and talk a bit about what might set it apart from other funds focused on the same asset class?
Mr. Orrell: The overall strategy of the fund is really quite simple; we tend hold mostly gold mining companies, less than 15% historically in silver producers, and a 5% to 7% weighting in bullion assets. From a market cap perspective, we own large to microcap mining companies, which encompass large multimillion-ounce producers to exploration and development companies.
Our focus currently is twofold. We are seeking out companies that will be able to use their operating margins to acquire assets in the current depressed mining environment and therefore benefit as the cycle turns back up. Secondly, we are shying away from companies that have large capital needs in order to maintain their business.
What sets us apart starts with today's investing environment for gold assets - you have the choice in today's world between buying ETFs for a bullion exposure or ETFs in gold mining securities, something that didn't exist 10 years ago, let alone when I first got into the business in 1983 - what we bring to the table, versus having a passive investment in an ETF security, is the benefit of having the experience of being able to identify companies with the management and projects that will deliver superior returns through execution and value creation. There are not too many people in the gold sector that have 30 years of experience in investing and evaluating the gold mining sector. We are not going to school on our investors' capital, and that is what investors are looking for when they hire professional management.
TWST: Please share with us your big-picture view on gold today. Where is it, and where is it going? There's been a price decline for the past two years or so; where do you see it heading from here?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Commodity Markets
- Basic Materials Industry
- Gold Price