Gold's Secular Bull and Potential Rotation from Equities

Stijn Schmitz welcomes Tavi Costa to the show. Tavi Costa is Macro Strategist at Crescat Capital. Costa shares a compelling personal journey from Brazil, where experiencing hyperinflation shaped his financial perspective, to becoming a tennis player and eventually a finance professional. His background in macro analysis has enabled him to identify significant market turning points, such as predicting China’s potential economic challenges and the emerging commodity trends. Costa emphasizes the importance of independent research and developing strong conviction in investment strategies.

He discusses the current bullish environment for gold and silver, highlighting a notable chart showing central banks increasingly preferring gold over treasuries. He believes the current gold market has substantial potential, potentially surpassing historical performance due to unprecedented economic conditions. Regarding silver, Costa presents an intriguing 45-year cup and handle technical pattern, suggesting the potential for silver prices to reach triple digits. He argues that limited silver exploration assets and increasing demand from various sectors could drive significant price appreciation. Moreover, he sees tremendous opportunity in mining companies, noting their impressive profit margins and potential for institutional attraction.

Costa is also becoming bullish on energy, presenting a contrarian view based on declining oil inventories, reduced drilling activities, and potential increased energy consumption from technological developments like AI. He sees the energy sector as an undervalued asset class with significant medium-term potential.

At Crescat Capital, Costa focuses on early-stage exploration companies, employing a venture capital approach in the mining space. He believes in actively helping management improve capital allocation and exploration strategies. His investment philosophy centers on identifying intrinsic value in companies before market recognition, with a particular focus on metals and resources. Throughout the discussion, Costa emphasizes flexibility in investment thinking, the importance of independent research, and the potential for significant shifts in market perception toward traditionally underappreciated sectors like mining and energy.

Timestamps:
00:00:00 – Introduction
00:00:31 – Welcoming Tavi Costa
00:00:59 – Tavi’s Early Background
00:04:31 – Macro Expertise and Conviction
00:09:24 – Gold vs Treasuries Chart
00:15:08 – Silver Cup and Handle
00:19:12 – Silver Supply and Demand
00:22:45 – Miners Profit Margins
00:27:42 – Crescat Portfolio Positioning
00:32:28 – Bullish Oil and Energy
00:38:11 – Concluding Thoughts

Guest Links:
X: https://x.com/tavicosta
X: https://x.com/crescat_capital
Website: https://crescat.net
LinkedIn: https://www.linkedin.com/in/otavio-tavi-costa-76368628

Disclaimer: The opinions and information shared by Tavi in this discussion are his own, and not necessarily those of Crescat. Any investments discussed may or may not be held by Crescat. Investments carry risk including risk of loss.

Tavi graduated cum laude from Lindenwood University in St. Louis with a B.A. degree in Business Administration with an emphasis in Finance and a minor in Spanish. Tavi played NCAA Division 1 tennis for Liberty University.