Monday, June 13, 2011

John Burbank Interview

Bloomberg has a recent interview with Passport Capital's John Burbank.

Burbank has hedged his commodity exposure (energy, agriculture, precious metals) because he sees a "risk-off" environment caused by the end of QE2. He's still a long-term bull on Gold and commodities but sees weakness until August. We may see the prices of commodities revert to levels before QE2. We may also a flight to sovereign debt short-term.

The long-term bullish case on Gold
The biggest reason to stay in Gold that the world's central banks are seeing the writing on the wall"
Congress has no appetite for difficult decisions
The growth of the Chinese consumer (will eventually surpass India's consumption of Gold)

How to buy Gold
Recommends buying physical gold or small-cap miners (has hired two geologists).
Gold stocks are discounting a further drop in Gold. If there is additional Fed action, he would jump back in quickly.

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