Changing Monetary Places
Jim Grant, founder of Grant's Interest Rate Observer, interviews Senior Portfolio Manager John Hathaway in his May 15 Interest Rate Observer.
Jim Grant: "As for gold-mining shares, John Hathaway, co-portfolio manager of the $1 billion-plus Sprott Gold Equity Fund, reports that interest is exactly nil. The Sprott bullion business is jumping, but not the mining-stock investment business. Blame previous poor performance, he says, or long memories of mine mismanagement around the time of the 2011 gold-price high, or the inherent risks of digging for a vanishingly scarce metal in inhospitable places. But for whatever set of reasons, he goes on, gold shares, in relation to bullion, are the cheapest they’ve been in his 20 years in the business: 'What astonishes me—I’m an old value investor—is that so many companies are generating free cash flow, and it is not hard to find companies with free cash flow yields of 10% or better.'"
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