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A Crazy Situation in Metal MORE PRECIOUS than GoldBy
Monday, October 17, 2011
"This situation never happens..." Rich Checkan told the crowd of investors on Saturday.
"Today, platinum is actually more than $100 cheaper than gold."
"This shouldn't be," he implied. Platinum is 30 times scarcer than gold – and we need it. Platinum is a key component for carmakers: 60% of the world's platinum produced goes into catalytic converters.
As recently as March 2008, platinum sold for over $2,000 an ounce. At the time, gold was less than $1,000 an ounce.
Rich likes platinum today. When the platinum-to-gold ratio falls near one, as it is today, platinum is cheap and should outperform gold. Here's what the relationship has looked like over the last two decades or so:
.png) Rich Checkan and his company Asset Strategies specialize in precious metals.
Asset Strategies hosted an investment conference in Dallas over the weekend. I was a speaker at the conference. Another speaker, Adrian Day, made the case for platinum as well...
"One-third of all cars in China were purchased in the last four years," Adrian said. "And last year, China took over the U.S. as the world leader in car sales." With China's appetite for cars, the demand for platinum is not going away. Meanwhile, supply is scarce. Eighty percent of the world's platinum reserves are in one area in South Africa.
Since platinum prices are so cheap relative to gold, Rich recommends buying platinum. Platinum coins are a simple way to take possession of platinum. They are just like the gold coins of the same denominations... American Eagles, Canadian Maple Leafs, etc.
For the details on this way and other ways to own platinum directly, you can reach Rich and the Asset Strategies team at 800-831-0007 or by e-mail at [email protected].
You can also easily buy platinum in your brokerage account. Just like gold has a popular exchange-traded fund (GLD), platinum has a fund as well (PPLT).
The long-run story for platinum is pretty simple. We have a recipe for higher prices. We have certain demand from China (for cars). And we have limited future supply, mostly from South Africa.
We have a short-run opportunity as well... Platinum is cheap, selling for $100 less than gold, which never happens.
It's a crazy situation in a metal you might not have considered before... But it's worth checking out right now.
Good investing,
Steve
Further Reading:
The last time the platinum-to-gold ratio got this low, master trader Jeff Clark alerted Growth Stock Wire readers. Three months later, platinum had climbed 22%. (Gold was only up 2%.) You can find the full details of how that trade played out there: It's Time to Take Precious-Metal Profits.
Market NotesNEW HIGHS OF NOTE LAST WEEK
99 Cents Only Stores (NDN)... cheap stuff
Dollar General (DG)... cheap stuff
Kimberly-Clark (KMB)... tissues, diapers, napkins, etc.
Bristol-Myers Squibb (BMY)... Big Pharma
Lorillard (LO)... cigarettes
Reynolds American (RAI)... cigarettes
NEW LOWS OF NOTE LAST WEEK
First Solar (FSLR)... solar panels
Illumina (ILMN)... gene sequencing
Human Genome Sciences (HGSI)... drug development
Complete Genomics (GNOM)... gene sequencing
National Bank of Greece (NBG)... shocker!
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