bio on my fave gold analyst, Jim Sinclair of TanRange
from last December in "Forbes" magazine
this guy has called the turns with gold specifically since July
when Sinclair talks about the Gold Cartel, of risk programs, of bilateral conflicts between Asian metal longs versus NYCity futures shorts, it is worth your while to listen
he believes the Gold Cartel will die a horrible death inevitably
he sees a long rally window for gold starting in a few weeks
let them die, screw them, criminals that they are
sorry, I get emotional about treasonous criminal activity
/ jim
forbes.com
Golden Oldie
by Bernard Condon, 12.10.01
Having called the top of the gold market 22 years ago, a goldbug now thinks that he has found the bottom.
In 1977 James Sinclair boldly predicted that gold would rise from $150 per troy ounce to $900. Gold never reached that mark, but it came close on Jan. 21, 1980, peaking at $887.50. The next day, says Sinclair, he unloaded his entire gold position, personally netting $15 million. Pointing to the U.S. Federal Reserve's efforts to fight inflation, Sinclair then predicted at an annual gold conference that the metal would languish for the next 15 years. It did. On Friday, Jan. 20, 1995, it closed at $383.85.
So this is a guy to listen to. He's bullish again. Why? Because he believes, despite the whiff of deflation in the October producer price index, that the U.S. is headed for mild inflation. He thinks that the dollar is due for a fall. He is also impressed that mining companies, which routinely sell unmined metal forward at fixed prices to protect themselves against further price drops, have recently pulled back from placing these hedges, a move that should prompt gold prices to rise. If they do, Sinclair expects a squeeze on gold speculators, who have $36 billion in short positions. Sinclair figures that the shorts will cover their positions soon after gold hits $305, a move that could force the price to $350, even $430.
Persuaded? On the New York Mercantile Exchange you can buy an option to purchase 100 ounces of gold in six months with a strike price set at a slight premium to today's price. An option exercisable at $300 will cost you $9 an ounce. If gold hits $350 you pocket $4,100 in profits.
Sinclair is not buying just futures and options. Since 1996 he has invested $11 million to develop 5,600 square kilometers of barren land in central Tanzania that he's convinced hold vast gold deposits. Drilling on the property is still in the early stages, but Barrick Gold is already pulling metal from an adjacent site whose proven and probable reserves have nearly tripled to 10 million ounces in the past two and a half years.
[thus the name TanRange, from Tanzania]
It's a gamble not many investors would make, but Sinclair has always stood apart from the crowd. On the walls of his office hang six photographs of Shri Sathya Sai Baba, a guru in India whom Sinclair visits several times a year. Sinclair's love of carrot juice recently turned into a 25-kilo-a-week habit that was brought to a halt only when his doctor grew alarmed at the orange tint to his skin. A loner, Sinclair paid $3 million in 1983 to turn a 19th-century barn into a reception hall for his house but has held only three parties there.
[my sister's skin turned orange also years ago from carrots]
After his 1970s career as a goldbug, Sinclair retreated to his Connecticut estate, where he played with his helicopters, show ponies and collection of Ferraris. He didn't stay idle long. He built cable systems at Cross Country Cable, a company he started with two friends, then made millions selling some of them to John Malone's TCI.
"Jimmy is different," says his onetime cable partner Vincent Tese, the former New York State banking commissioner and now a Bear Stearns director. "But in the trading business people don't care if you're purple, just as long as you're making money."
In 1989 Sinclair got back into metals after buying a small stake in a Vancouver, Canada, mining company called Sutton Resources. During a trip to Tanzania for the company that year to check out a potential nickel site, Sinclair became intrigued by a 140-square-kilometer patch of land called Bulyanhulu. It was studded with greenstones, volcanic rocks marked by long seams that are often rich in minerals. Some greenstone mines, such as those in Canada's Kirkland Lake Camp, have been yielding gold for a century and do so now at the relatively low cost of $200 an ounce.
"The opportunity stared at me as it did with cable and gold," he says. "The only way to make big money is to have the courage to put your eggs in one basket."
[diversify, shmursify, dont go kvetshing on me]
Sinclair helped Sutton buy rights to mine Bulyanhulu, then lobbied for it to do the same in adjacent lands. Sutton balked and eventually sold Bulyanhulu to Barrick. Sinclair decided to go it alone. |
