Comments from a noted investor reported in a current G&M article:
Gold magnate Seymour Schulich says everyone his age is worried about the global economy, especially when it comes to the central banks printing money, or national governments running up massive public debt.
“The people in my peer group are scared to death,” the 73-year-old investor and philanthropist said in an interview.
“The rate of paper printing going on in the world is humungous. The amount of debt being taken on by the governments to stimulate their economies is humungous,” Mr. Schulich said.
“When exactly the chickens come home to roost, nobody is smart enough to know – except those of us that are old and have seen the playing field for a long time know it will happen.”
But it’s not all doom and gloom from the Toronto-based billionaire, who made his fortune with gold royalty investments. An abiding fixture of the North American investment and business scene for more than four decades, Mr. Schulich believes natural gas is headed for a revival, and not surprisingly, still counts gold as a rock-solid investment.
Even though gold prices have plunged and gold companies are struggling, “the beauty of gold is it can’t be printed by governments.” Cautious, conservative investors should still invest in “gold, gold and more gold.”
Mr Schulich said he still likes New Gold Inc. and Franco-Nevada Corp. He also advises that “every investor should have 10 to 15 per cent of their money in gold. And I mean gold, not gold companies.”
With signs of a natural gas rebound, Mr. Schulich also takes a measure of pride in the fact he held on to his stock in the sector even as others fled the market. He has a controlling share in Birchcliff Energy Ltd., a Calgary company that he describes as having “a humungous amount of gas in the Montney.”
While new oil pipelines face tough resistance from landowners and environmental groups, Mr. Schulich said he doesn’t see the same opposition to natural gas transport. Canadian gas is closer to Asian markets than other sellers, and reserves are onshore. He predicts natural gas could be up in the range of $5 to $6 per million British thermal units a year from now.
“I’m very bullish on gas. Primary because I think if we’re smart enough, I think the LNG [liquefied natural gas] export opportunities are tremendous.”
Mr. Schulich said the commodities supercycle is far from over, but a “pause” in China’s ferocious consumption of materials such as coal, steel, copper and aluminum means there’s going to be a longer slowdown than he first thought. News reports on the size and scale of the Chinese overbuild have surprised him.
“The duration is hard to read. But there is a pause, and it could be a little longer than we all thought.”
In a period of uncertainty such as this, Mr. Schulich added one other piece of advice.
“You want to have cash around to a reasonably large degree. That’s a personal preference, but that’s my preference.”
