Episode 14

E14. Reimagining the 60/40 Portfolio, Hard Assets, Bitcoin as Digital Gold & Asset Allocation Strategies

In this episode hosts Mike Philbrick and Rodrigo Gordillo welcome Mark Valek, partner at Incrementum AG and co-author of the acclaimed In Gold We Trust report. Mark, a seasoned macro investor with decades of expertise at the intersection of gold, monetary policy, and systemic risk, offers deep insights into the evolving roles of gold and Bitcoin. The discussion covers a diverse range of topics including macro investing, fiscal dominance, central bank gold accumulation, innovative portfolio allocations, and the emergence of Bitcoin as digital gold.

(0:00) Introduction and Event Announcement

(3:04) Introduction of Guest Mark Valek

(3:50) "The Big Long" Concept and Central Banks' Role

(7:55) Sanctions Impact on Trust and Rise in Gold Purchases

(11:33) Fiscal Dominance and Gold's Monetary Role

(22:10) Gold Price Stability Amid Quantitative Tightening

(28:28) Inflation and Gold Market Projections

(33:13) Gold Allocation in Diversified Portfolios

(41:31) Gold vs. Bitcoin: Asset Comparison

(45:47) Bitcoin Adoption and Market Outlook

(51:27) Integrating Gold and Bitcoin in Investment Strategies

(53:26) Rethinking the Traditional Investment Portfolio

(55:37) Exploring Alternative Assets

(58:15) Structuring the New Age Portfolio

(59:54) Closing Insights on Portfolio Performance

(1:00:13) Guest Information and Incrementum Insights

(1:01:40) Outro and Listener Engagement

Transcript
Mark Valek:

So as a gold holder, I think the main advantage is you can

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be very certain that you are not

going to be diluted by new gold, which

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is coming into circulation, right?

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And this, gives gold a high stock to

flow ratio or a low, inflation rate.

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However you wanna put it.

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The one is just the

inverse the, of the other.

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And in other words, gold not available

because there is necessarily such

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a limited amount of it, such a

small amount of it, I should say.

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There are rare earths, which are much less

of them are available, but that doesn't

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mean necessarily that they are worth more.

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But gold is so, interesting as a store

of value because its amount is so

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constant, so you can really know it's

basically the same amounts going around

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this year than as it will be next year.

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not a hundred percent, one, one

and a half percentage points.

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Mike Philbrick: We're thrilled to welcome

Mark Valek, partner at Incrementum AG

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and co-author of the highly respected

In Gold We Trust report, often

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called the Gold investor's bible.

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Mark brings decades of experience in macro

investing asset allocation with a unique

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focus on the intersection of gold and

monetary policy as well as systemic risk.

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This year's 2025 edition is entitled The

Big Long, and it explores everything from

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fiscal dominance to Central Bank Trust to

Gold's evolving role as a reserve asset

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and even Bitcoin's growing role here.

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So there's, there's also a re-imagining

of the 60 40 portfolio with the

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role of gold and Bitcoin in the new

regime playing an expanded role.

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Gr.

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Mark, it's great to have you

with us and, you know, from the

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perspective of the paper, can you,

can you elaborate on the Big Long?

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Mark Valek: Thanks for

having me, gentlemen.

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It's a pleasure.

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Yeah.

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Uh, we.

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as you already mentioned, uh,

right this, uh, In Gold We

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Trust report on an annual basis.

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And every year we've been

giving the report a leitmotif.

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And, this year's, uh, leitmotif, as you

said, was the big long, which is, uh,

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obviously a little bit of a, play on the,

on the movie, The Big Short, in which,

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which, uh, basically showed, a lot of the

hedge fund managers back then betting on,

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on, on, on the housing crisis basically.

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And this is a little bit of a inverse.

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Uh, the idea that actually a long

position on, on the gold, is probably

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going to, in our view at least,

uh, be a very profitable trade, if

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you wanna look it like, like that.

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but it, it is actually in

our view, obviously much,

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much more than just a trade.

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It is like a systemic rediscovery

of, of gold as, as a reserve asset.

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I, I'd put it in, in this kind of terms,

because of everything we've been seeing

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in the last years actually, um, the, the,

the dollar based system is, being eroded.

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Uh, it's the trust and it is

slowly being eroded with a lot of,

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because of a lot of things which

has, uh, which have been happening.

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And this is really our, our message to

investors since we are also asked a,

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a lot of times, well, gold price has,

has risen so much, what should we do?

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It, it's probably, uh,

at the end of, its road.

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And if you look at our cover,

the, road is, relatively long

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still, but it's also a little bit.

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Bumpy.

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It's, it's not like a straight road.

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It's not a highway.

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It's nothing that we are expecting.

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But what, we wanted to point out is we,

we do think that this bull market has a,

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a lot of ways to go, because as I said,

uh, in our view, the re monetization,

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which is a difficult term, we can

talk about that perhaps, but, but the

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rediscovery of gold as an asset, uh, in

systemically has started in our view.

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Mike Philbrick: And how

are you observing that?

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Mark Valek: Well, I'd say the, the most

evident or obvious indication for that

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is if one looks at, uh, central banks.

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So we, we know that central banks

have been buying gold and accumulating

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gold actually already, uh, since

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pace when it comes to the years 2009

to:

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accumulation was somewhere between

300 to 400 tons during these years.

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But in 2022, something was kicking in.

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If, if one looks at the, uh,

the purchases, they, they blow

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off to over 1000 tons a year.

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So basically, three x uh, and, they

have been in, in this ballpark since

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consistently the last three years.

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So, and probably the people to, um

occurrence, what, uh, what actually

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happened was, uh, in our view at least,

the sanctions, the sanctioning of, of, of,

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of Russian assets in, in this conflict.

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when it came to the war in Russia,

obviously the, the, the worlds saw this

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because, I mean, if you, if you take

the, the standard wisdom, and even I

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think it's part of the, the CFA body, if

you, if you take the CFA exam, you get

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to learn what is the riskiest, asset and

you have to actually tick off the box.

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You as treasury are the riskiest asset.

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And, for a lot of people in the

world, uh, it became evident that

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they are not riskless anymore.

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Uh, so if you, if you are politically

perhaps not in the, the best

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friend of, of the US, then perhaps

counterparty risks are, you should

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reevaluate your counterparty reason.

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I think the world is, been doing this,

and again, it, it shows up in, in central

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bank, uh, purchases, first and foremost,

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Rodrigo Gordillo: So, Mark, this

is, I just popped up one of your

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charts here, and so that, that's the

kind of big jump since the Ukraine

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invasion, that you're alluding to.

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Right.

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And do we think that's basically because

of the sanctions to, to Russia and, and,

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the fiscal misuse of, of the United States

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Mark Valek: Sure.

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I mean, yeah, I, I, I, I guess it's,

it's not, the, this only factor, but

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it's, uh, uh, I think that the jump does

have to do with, with the sanctions.

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I, I would argue that I.

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And, uh, I mean, as one can see, uh, I

think the first moment of, of distrust

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was when, when system, the system was

questioned, obviously was, uh, around

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the GFC or in the aftermath of the

great financial crisis,:

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Back then, counterparty

risk also obviously, uh.

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Became a topic since we had some

banks failing, uh, at first, at least.

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and, and so, so this was, uh, I think

the first dent, bigger dent into, into

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this, dollar centric, um, monetary

system, which has been going on since 19.

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You can argue 71, 73, where

wherever you wanna put the date.

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but really coming from, from, from,

from a very unique, uh, situation.

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If one goes back further, like

if one looks at the end of,

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if one looks at the 1990s, uh.

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The US was the only, uh, game in town

when it comes to, to geopolitics.

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It was also called the,

the only superpower.

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Um, and it was, uh, the, there was

basically no, rivalry go going on.

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Uh, I mean, to, Soviet

Union had broken down in 91.

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And, uh, and, and the US had a

great run in the nineties, even had

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some sur surpluses from the fiscal

side at the end of the nineties.

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So the dollar was really king at the

end of the nineties, no competitor.

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And gold was flat.

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nobody had interest in gold.

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That was also basically where

you had the lowest and the price.

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And a lot of things have

changed, uh, since then.

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I mean, fiscally and also geopolitically.

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Rodrigo Gordillo: yeah.

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it's incredible to see that in

post '08 you get the rise in

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demand for central bank purchases.

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It's around the same time that,

you know, Bitcoin launches as

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well as part of that mistrust.

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And it's, you know, big jump,

consistent growth and purchas

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purchases, and then another massive

jump in the last three years.

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So.

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Mike Philbrick: It really

was a watershed moment.

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I mean, we've had, we've had

conflicts globally, but no one has

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ever seized the reserve asset of

another nation during a conflict.

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And that moment in time caused everyone

to sort of stop and say, well, if the US

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treasuries, the reserve asset, they know

where all the treasuries are held because

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they're the issuer of those assets.

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And if we do something that is not

agreed to, or isn't liked by, the

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US, then all of a sudden our treasury

becomes, at risk for confiscation.

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And gold has that one asset where it's

not a counterparty risk to anybody else.

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When you hold a bar of gold that is yours.

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Now, paper gold's another, another topic,

but a pretty significant watershed moment.

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And then you've got, then you've got the

fiscal dominance following that up, Mark,

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and I wonder if you've got some comments

on that or thinking into how this bleeds

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into other areas for demands for gold.

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And then obviously I'd love you to touch

on the initial conditions we have, ie.,

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where, where are we starting from,

from an allocation perspective

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across portfolios generally.

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Mark Valek: Yeah.

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Uh, so I, I'd like to add to the, just

to the, to the counterparty, um, aspect.

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I mean, this is, is not as relevant

for, for every investor, as I said.

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I mean, I.

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Probably the, the 800 gorilla in, part

gorilla in the room is, is China, right?

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So, I mean, it's not no secret

that, China and the US have

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this geopolitical, uh, rivalry.

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And, and, and China has huge surpluses.

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So this is a big topic, which I'm going

very lively, debated today in, in policy

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efforts by the Trump administration.

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But that's, that's nothing new.

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Uh, so that has been going on, but,

uh, I just wanted to say, for US based

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investors, the, the, the counterparty risk

actually is, hasn't been in imminent and

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I'd argue it's, it's still not imminent.

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So it's, it's very

crucial, to whom you speak.

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Right?

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and, and I think also as a part of, uh,

this reality, US financial institutions

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who still own, the, the largest pools

of capital and, uh, therefore are

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very important for, for, for price,

discovery, for, for all kind of

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markets, but gold, being one of them.

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they haven't been participating

in, in, in this rally.

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And they, they, I think this is

also very important to, explain, and

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that's a very good chart that you're

pulling up to explain this, this,

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discrepancy between, between all

kind of performance of, of, say for

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instance, what we call performance gold.

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W what we include gold

miners, but also silver.

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You know, both of these assets

were actually, uh, relatively,

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uh, weren't performing that

well in the recent bull market.

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Why?

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Because that has the, the bull market has

been a central bank driven bull market

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and, and typically silver, but also

mining equities are marginally bought

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by, by western financial investors.

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And, and they again, haven't,

haven't participated yet.

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I think it's just, not worthy fact and

referring to this graph, this is, the

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new, the new Gold playbook, what we called

it last year, our last year's leitmotif.

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We wanted to highlight that actually

this relationship between the real,

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real interest rates and in this case

it's also, the, the ETF holdings,

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the charts look very similar,

actually has, has broken, right?

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So E-T-E-T-F holders, which are

ETF, purchases are typically

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in, in the west are typically

Western financial, institutions.

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And they always were, the last

two decades at least, have been

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the marginal buyer of gold.

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And I think this correlation is,

is quite evidently seen here.

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Uh, even though that's quite interesting.

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I think even though the total

amount of, of gold they hold, and

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we see this on the, left hand scale.

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isn't, isn't, uh, that big because

we have, uh, estimated amount of

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total above ground stock of 220,000

tons and they've been holding

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something, uh, like, 2000 tons, right?

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So, so that's, that's,

that's not a huge amount.

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But, but at the margin, at the

margin, it was enough, obviously,

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uh, to, to, to move the price.

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And, uh, again, this goes back to my

argument, they didn't see any need,

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if you look at the right hand of the

chart, uh, any need to increase their,

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their gold holdings, actually, they,

they sold when, when the interest

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rates started to, to rise again.

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whereas the price, uh,

just started to to sower.

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Exactly.

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Exactly.

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Then, uh, and so again, I think this

is quite a good confirmation of our

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argument, why what has happened.

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It's been a central bank induced bull

market, uh, which, I think explains

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why performance called gold, as we

call it, has lagged and which also

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I think one can conclude if Western

investors join the party, then we are

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gonna see performance, uh, gold to, to

make, make up some under performance.

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And I think this actually may have

started during the last weeks.

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Rodrigo Gordillo: Yeah.

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Well, when you look at the, you

know, there's a pie chart here

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that I wanna present quickly.

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when you look at the existing

holdings for gold, I thought this

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chart was illuminating, right?

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Since the beginning of our,

of my careers, I met Mike.

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When we, whenever we walk into a

room of, uh, financial professionals,

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we ask how much of their, their

holdings for clients are in gold.

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And it's a shocking amount that say zero.

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And this chart just kind of shows it.

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Here you got gold and precious metals

at less around 1% versus all other asset

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classes, so that, that cohort has not

woken up to the utility of gold so far.

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It's, it's fascinating to me, but, you're

starting to see some pickup, just not

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Mike Philbrick: I would say that I, I

would say that we're starting to see

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a pick up in just evidenced by the way

the underlying gold equities have been

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playing as, as Mark mentioned, you know,

that that tends to be a lot of North

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American participants will, will jump into

that and it sort of flows down the, the

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price of gold is up and then it stays up.

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And then you have to, you know, go

through the discounted cash flow analysis

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for gold mines, see how much they've

sold forward, where they're flat on it.

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So there's this lag period between

where you actually get some interesting

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cash flows and now you're seeing those

growth numbers in some gold stocks

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too that are pretty substantial,

largely based on the gold price

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coming through in, in their profits.

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but you're seeing the

capital flow that way too.

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Just if you look at GDX or GDXJ, the,

the ETFs in North America that represent

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them, you see some outperformance finally

in the last, month or two, I think.

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So it does seem like your, your

thesis is on point Mark that

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the, that the North Americans are

joining the party slowly but surely.

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And I think you mentioned in the

report, you, you feel we're in

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middle innings on this in the, in

the sense of, uh, a baseball analogy.

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Mark Valek: Yeah, I mean, this is

obviously always a very, uh, tricky thing

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to estimate, bull markets evolution.

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but I, could, I, I think one can make the

argument that, this is obviously, we know

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at the beginning that this is also clear.

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So, uh, if we don't think that

we are at the answer, I, I guess

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that, that, that leaves us that

we're somewhere in the middle.

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Right?

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Obviously, I mean, we've been talking

about this, uh, this rediscovery of

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gold as an asset class, which has

been much more, prominent in, in,

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at the level of, of central banks.

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Now it's slowly perhaps starting, uh, in,

in the west of financial scenes again.

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But I think what, what is still kind

of, an, an unknown and, you actually

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asked, asked me about that, uh,

Mike, just before question before,

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about what, what's going to happen

with the fiscal situation, right.

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Fiscally dominance, if you

want to call it like that.

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And, and we really don't

know where this is heading.

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I mean, it doesn't really look as if it

would, uh, would change anytime soon.

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We had, I have to say, uh, a brief

moment of, reconsideration or let's

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put it that way, uh, of, looking at,

what's going to happen with, with Doge.

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And you've already put

up, the, the slide here.

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So, one, I think Ken say about the

administration one once, but, but what

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they did do for the first time, I think

ever, at least the last 50 years, they

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actually addressed the point of the

unsustainability of the fiscal situation.

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And that is, I think, quite,

quite significant actually.

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Because I mean, if you just think,

last, uh, Treasury Secretary Chairman

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Janet Yellen just said, no, no,

everything is fine and no problems,

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uh, nothing, nothing to see.

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Yeah.

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And, and now the officials

actually pointed out very clearly,

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or at least they did, they did.

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So, that was quite, uh,

quite an interesting moment.

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And I'd say, I mean, at the end of

the day, one has to think about why

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is the Gold Press rising at all?

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And the Gold Press is rising because there

is more inflation being produced in terms

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of more monetary units, monetary inflation

in, in order to basically, um, reflate

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the economy or inflate away the debt.

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Right?

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This is like typically structure

of basically also this step based

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monetary system one can argue

it's actually by design like that.

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Right?

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And, and, and so I think the really

the fundamental question which one

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has to ask oneself is, is, the, is the

fiscal path on, on a sustainable, is,

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is the fiscal path sustainable or not?

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And obviously it hasn't been sustainable

for, for the last decades, but as I

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just said, no, there were at least

addressing this point and, and talking

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about changing the path, but it doesn't

look like as if there would be close

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to, to substantially change the path.

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And as long as we don't see,

uh, a change in this, in in

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this momentum, I think the.

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We, we really don't know how

how long the bull market for,

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for gold actually can last.

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Right?

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So, so there are really a lot

of factors which, which we

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do not know about the future.

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But we can say these factors

are, are steady right now.

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And that's why we, we assume

that there's still a lot of upset

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Rodrigo Gordillo: I mean, it is, it

is fascinating to have watched the ups

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and downs of the promises, the hope.

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And now with the big beautiful

Bill, seeing how much more spending

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and continuation of the past.

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There's been, I think, what was it that

Elon's uh, line, uh, the bill can be big,

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it can be beautiful, but it can't be both.

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I think that's, that's bang on.

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Right.

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And, uh, I think it's a both a big, it's,

it's a very big bill and, uh, you know,

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I think the hope for the administration

is really unlocking efficiency and

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unlocking efficiency through cheap energy.

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But even as you look at the bill and,

and explore what they've done in terms

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of, solar and the like, it just, they,

they're making it more difficult to

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have cheap energy in the United States

with the exception of trying to drill,

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baby drill, which is yet to be seen

how they're gonna accomplish that.

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If they're able to unlock that, then I

think all bets are off, and who knows

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what's gonna happen to gold, right?

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If they, they unlock a, a ton of

efficiency and I think everything has

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to be, most of efficiencies can be

driven by cheap energy costs, but that

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is a, a unlikely scenario in my view.

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and it certainly going austerity

is not gonna be something that

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the administration's gonna do.

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Mark Valek: Right.

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Mike Philbrick: we we have to print.

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Quantitative tightening

has been ongoing of late.

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They haven't even started to,

to have to start to roll some of

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the debt and quantitatively ease.

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And we have this in the face

of quantitative tightening.

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We have a very strong gold price.

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I think the other thing in the

real current domain is people will

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say, or have said, it's up a lot.

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Well that's fair, but we're going

through a moment of consolidation.

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It is consolidating those gains.

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:

And if you're someone who's been thinking

about allocating this is the time to

335

:

start actually giving yourself some

time to allocate to an asset as it kind

336

:

of digests a little bit of the gains

it's had over the last year or so.

337

:

I just think it's a bit of a, it's a bit

of a sweet spot where you're still early

338

:

enough where you can, garner the gains.

339

:

And we often approach it, Mark,

from the perspective of the unique

340

:

asset class to the portfolio, right?

341

:

Gold just brings such a unique

orthogonal angle to a portfolio of

342

:

sort of more commonly accepted assets.

343

:

It just always makes a lot of sense

and how you accommodate it and get

344

:

into the portfolio, that's, that's a,

a bit of a long story, but it generally

345

:

always makes sense to have some gold.

346

:

Uh, and I just feel like that,

that, you know, we're going through

347

:

that, that three phases of truth.

348

:

You know, if you go back to, uh, I

think even Gandhi said this, right?

349

:

Truth passes through three stages.

350

:

First it's ridiculed, second,

it's violently opposed, and

351

:

then third, it's self-evident.

352

:

And I think we've, you know, the

ridicule was sort of back aways where

353

:

people, why would you ever buy gold?

354

:

In the, in that period where the

US dominance was so strong, uh,

355

:

US dollar was very worthwhile.

356

:

then now it, you know, it's been through

this, it goes through this opposition.

357

:

Why would I hold it?

358

:

What are the reasons?

359

:

And then eventually it's

gonna be self-evident.

360

:

And, but then it's gonna be all priced in.

361

:

When it's self-evident that it should

be 10 or 15 or 20% of your portfolio,

362

:

the price is gonna be pretty high

363

:

Mark Valek: Yeah,

364

:

Rodrigo Gordillo: So, so Mark, why

don't you walk us through this chart

365

:

here and you know, there's this chart

and the one next that talks about

366

:

the path dependency, but tell us

about how you, you guys are thinking

367

:

about the, the different scenarios.

368

:

Mark Valek: Well, uh, so as already

perhaps may have become clear a little bit

369

:

of from, from our conversation, what we

do like is, uh, thinking in, longer terms

370

:

because I think it's, it's very difficult

to evaluate something in the short term.

371

:

especially, I mean, everybody wants to

know where, where will the gold price

372

:

go tomorrow on to the end of the year.

373

:

But, uh, I think, it's, it's more

realistic to get, get some kind of a

374

:

feeling in, in the longer term because,

these longer term trends, as as we

375

:

already discussed a little bit, to us

seem, seem very firm, firmly be in place.

376

:

And, and, therefore we, uh.

377

:

Basically five years ago, made some

kind of, uh, long-term predictions,

378

:

or at least, uh, we tried to quantify,

a, a model which, where we, where we

379

:

calculated different scenarios and then

the weighting of these kind of scenarios

380

:

we assessed how, how likely are each of

those scenarios, and, uh, our, basically

381

:

the, the, the average scenario brought

us for a 10 year time horizon for the

382

:

year 2030 at the end of the decade

to, a probable gold price of $4,800.

383

:

And that was, as I said, five years ago

en the Gold Press was at, uh,:

384

:

Um, that back then sounded quite,

uh, I think, uh, outrageous for, for

385

:

some people, even though actually.

386

:

the, the, the average return, the

compounded rate of return wasn't,

387

:

wasn't extremely, uh, extremely high.

388

:

I mean, what we looked at, uh,

during, during these, for these

389

:

calculations was actually the,

the decades, the historically

390

:

decades, of, of the gold prize.

391

:

And we only have, basically

from, from:

392

:

see these different decades.

393

:

Uh, we had actually, uh, two, two

good decades, which was, uh, which

394

:

were the seventies obviously,

which was the greatest decade, uh,

395

:

and the two thousands, which was

quite, quite, quite, quite good

396

:

decades for, for the gold prize.

397

:

And during the other decades, it basically

had side, side world markets or, or bear

398

:

market in the, the case of the eighties.

399

:

but so in the long term, we,

we calculated, or we, we, we

400

:

estimated the, the, the rate

of the monetary supply growth.

401

:

That was one factor.

402

:

And also the other, the other

factor was like the, implicit,

403

:

coverage ratio of, of gold.

404

:

So how, how, how high basically, or to

what, to what extent, will, will gold

405

:

be basically covering the monetary base.

406

:

uh, and that's a function of two things,

again, of, of the amount of gold the

407

:

central bank has and, uh, the, the

gold price if you market to market.

408

:

That's, that's how we

calculated it at least.

409

:

And yeah, and, we, we, as I said, we,

we had, uh, different, um, scenarios

410

:

and, the one thing, so, so the,

the, the average scenario was 4,800.

411

:

And, uh, we are now, above

basically the path to 4,800.

412

:

Uh, we were below the path,

but now we are above the path.

413

:

and so this is the dark blue line,

which you, which you can see this

414

:

is the, the path which it would

need to take, uh, to, to get there.

415

:

and, and we also, I mean, one of these

scenarios was an inflationary Scenario.

416

:

And 'cause, I mean, as

I said, the seventies.

417

:

A very good, environment

for, for the gold price due to

418

:

inflation slash stack inflation.

419

:

And if we see such a scenario once

more, uh, in, in this decade, we, we,

420

:

we back then said, well, then the target

will be considered considerably higher.

421

:

Something like, uh, $8,900

in, in, in that range.

422

:

And what's been interesting in that,

in that regard is obviously we saw

423

:

quite, quite significant inflation in

the first half of this decade, but, uh,

424

:

the the problem, at least statistically

speaking, came resolved or wa was, was

425

:

wasn't so, so bad in the last year,

so inflation rates at least came down.

426

:

Obviously that doesn't mean that

prices came down, just the, the rate of

427

:

increase of of these prices, came down.

428

:

but, uh, it was, it was at one point

quite significant, I think close to 10%

429

:

even, uh, in the us something like eight,

9% or so in, in, in, in this range.

430

:

But it came down to three

percentage range again.

431

:

Uh, so in our view to, to really,

and similar thing actually

432

:

happened in the seventies.

433

:

We had the one wave in the big, in the

first half and the second inflation wave

434

:

in the second half of the seventies.

435

:

So in, in order to qualify as an

inflationary decade, uh, I guess we

436

:

would need a second wave of inflation.

437

:

And, uh, I think that's totally,

possible in, in fact, it's, it's

438

:

quite likely in, in, in our view.

439

:

and, uh, if, if we will have a second

wave of inf inflation in the second

440

:

half of this decade, I think this

decade will go down as inflationary

441

:

decade, even though right now it's

not perceived as, as this yet.

442

:

Uh, and, and then I, we feel very

confident with, with our bullish,

443

:

price scenario at close to $9,000.

444

:

but we will see if, it

really, uh, kicks in.

445

:

Rodrigo Gordillo: Yeah, because

look, it's, again, whether that

446

:

scenario ends up happening.

447

:

I think it's important for people

to recognize that, predicting

448

:

the near future is really tough.

449

:

And so I think a lot of people see these

lofty predictions and then they, they

450

:

invest and then a month later when there's

a 20% correction, they say, I told you so,

451

:

or you got me into this at the wrong time.

452

:

So I think it's, it's important to

show this chart here where you kind

453

:

of describe what the different kind

of corrections might be along the way.

454

:

You know, it's not a straight shot.

455

:

so walk us through this chart.

456

:

Mark Valek: Right.

457

:

So we also looked at the, at the Max

Drawdowns, um, during, during each of

458

:

these decades, uh, especially during

the bullish decades, uh, because I

459

:

mean, our premise is that we are in

a bull market, obviously, and even

460

:

bull markets have have drawdowns.

461

:

And, uh, during the last two bullish

decades, uh, we had drawdowns between,

462

:

uh, 20 and 30 percentage points.

463

:

I think, three or four

times, more than 20%.

464

:

And in one case in the seventies, uh,

at one point actually 50% drawdown

465

:

which is, which is quite severe,

can argue if that actually then

466

:

ended the bull market and the new

one started in, in the second half.

467

:

That's, uh, statistically question how,

how you wanna define the bull market.

468

:

But in any case, the point being 20

percentage points of, drawdown, definitely

469

:

something which one should, should, can,

and should expect even if one is bullish.

470

:

And just to basically give, give, give

investors, uh, some kind of an overview.

471

:

What, where, where that would put us,

from, from the last all time high.

472

:

That would be $2,800 basically if, if we

fall 20 percentage points from the last

473

:

all time high, which is totally possible.

474

:

so, uh, but again, we don't know

if it, if it does fall that low.

475

:

So I mean, the one strategy which,

uh, I think in any case, uh, makes

476

:

sense probably is, is to average in

and to average out by the way as well.

477

:

So, uh, averaging in will, will,

will help you to get a little

478

:

bit of a better average price.

479

:

And I think that the other help

is, is, is psychologically, because

480

:

if, if, if you just like pinpoint

your, your entry, uh, point on,

481

:

on, on one specific point in time.

482

:

you, you always, uh, it's kind of if

it doesn't, if, if the market doesn't

483

:

go the way you, you want, you always

like, we'll question this decision.

484

:

But if you, if you kept some power

and, and, and average in, you,

485

:

you actually have a lot of, in,

in both cases, if it rises, well,

486

:

you didn't do it wrong, right?

487

:

Because you put something in already.

488

:

But if it falls, you have enough

power to, to average down your price.

489

:

So that really, I think, helps

you to be more comfortable with,

490

:

with the position to some extent.

491

:

Mike Philbrick: Also, I think, helps

build intuition for allocators and

492

:

investors who may not have had an

allocation to gold, which is not given

493

:

the facts we know from the report 1% of

assets held by asset owners are in gold.

494

:

So not a lot of people have

intuition for how this asset class

495

:

functions in different ways when

compared to, let's say, stocks and

496

:

bonds and how it refl responds to

inflation and potentially deflation.

497

:

And so as an allocator, I think I,

I echo Mark's, uh, advice there.

498

:

Take your time, make an allocation

and then rebalance that allocation.

499

:

And also maybe you sin a little because

you feel you're in a bit more of a bull

500

:

market and you let that allocation run

up, gives you a profit cushion and allows

501

:

you to add more at a, at a potential time

down the road to continue to compliment

502

:

those traditional asset classes that

people are so over invested in from

503

:

stocks and bonds to even, uh, private

equity, private credit to some degree.

504

:

Rodrigo Gordillo: You know, one

of the things that with regard to

505

:

allocating and speaking with allocators

and contemplating gold versus other

506

:

traditional asset classes is the

lack of yield that gold has, right?

507

:

Um, from a fundamental perspective,

professional allocators.

508

:

Like the dividend yield, we've learned

the discount, uh, value mechanism.

509

:

We are getting yields on bonds and cash,

but gold doesn't offer any of that.

510

:

And so how do, how should we help

allocators think about gold as a

511

:

diversifier, gold as an asset class, given

that it doesn't offer much on cash flows?

512

:

In fact, it probably costs a little

in terms of storing and carry costs.

513

:

Mark Valek: Right.

514

:

I mean, this is, I think, a very essential

question, and this, uh, basically to,

515

:

to, to understand, at least our view.

516

:

But I think a lot of people share

this, this view One really needs to

517

:

dive into, into the monetary system.

518

:

Uh, and at the end of the day,

answer the question, what is money?

519

:

And this is a simple question,

but it's, uh, I think it

520

:

has, it has no simple answer.

521

:

but, um, if one looks at the Austrian

perspective, Austrian School of

522

:

Economics perspective, I mean.

523

:

Money basically evolves, or evolved

or oftentimes evolves always again,

524

:

in, in an economy, which, uh, where

you have the division of labor, right?

525

:

So you need to, the, the, the, the

demand for, for medium of exchange

526

:

occurs is once, once the economy

produces supply, output, which is,

527

:

was greater than its consumption.

528

:

So you basically have the

need to, to store some of

529

:

your excess production, right?

530

:

And you need a medium of exchange,

which basically, uh, keeps account

531

:

of these excess production accesses

and, depending, I, I mean, it's really

532

:

interesting and I can, uh, really,

uh, just encourage everybody to, to

533

:

read, uh, Alan Greenspan's essay,

which is short, but very to the point.

534

:

Gold and Economic Freedom,

can just Google it.

535

:

It's a really great essay from

from Alan Greenspan, which,

536

:

which he wrote in 1967, I think.

537

:

where, where he basically describes

also this evolution of, of, of

538

:

money, in, in, in different stages.

539

:

Depends how much, uh, surplus you

produce as a, as, as a economy, you

540

:

need the more durable money, right?

541

:

So.

542

:

So in, in the decentral evolutionary

market process, actually all over

543

:

the world, uh, the more sophisticated

the economies became, the more

544

:

excess savings they produced.

545

:

They, they had the demand for more

durable, uh, medium of exchange.

546

:

cause you had all kinds of

monies, uh, all the time.

547

:

And, with nobody legislating

it, uh, that way.

548

:

Uh, in, in, in a market, in a

competition process, basically, precious

549

:

metals won the race, right due to

the, due to their characteristics.

550

:

And we can talk a lot about the different

angles of that, but perhaps the most

551

:

important and oftentimes underlooked

are most, uh, overlooked factor

552

:

is, is is the stable stock to flow

ratio, especially from for, for gold.

553

:

This, this is true.

554

:

And the stock to flow ratio basically

is the inverse of the inflation rate

555

:

or the, growth rate of, of the gold.

556

:

So the stock is all this all

gold stock above ground stock.

557

:

That would be the 220,000 tons

of gold, which I refer to.

558

:

and the flow would be, 3000, uh,

tons, 3,500 tons roughly, which,

559

:

which is being produced every year.

560

:

And if you divide these two

numbers, you get like 1.5

561

:

percentage points

inflation rate if you want.

562

:

Yeah.

563

:

So, this is, uh, so as a gold holder, you,

I think the main advantage is you, you

564

:

have, you can be very certain that you

are not going to be diluted by new gold,

565

:

which is coming into circulation, right?

566

:

And this, gives gold a high stock to

flow ratio or a low, inflation rate.

567

:

However you wanna, put it.

568

:

The one is just the

inverse the, of the other.

569

:

And, in other words, gold is, is not

available because there is necessarily

570

:

such a limited, amount of it, such

a small amount of it, I should say.

571

:

there are rare earths, which are much less

of them are available, but that doesn't

572

:

mean necessarily that they are worth more.

573

:

but gold is so, interesting as a

store of value because its amount is

574

:

so constant, so you can really know.

575

:

Uh, it's, it's, it's basically the

same amounts going around this year

576

:

than the as it will be next year.

577

:

not a hundred percent, but, but, one,

one and a half percentage points.

578

:

and this rate was very, it has been

extremely stable over the last 150 years.

579

:

Where we have the, the, the data

going back further, it's a little

580

:

bit difficult, difficult to

assess the, the exact, exact data.

581

:

But most of the gold has been, has been

produced, uh, recently, basically in the

582

:

last a hundred years because, uh, even

one and a half percentage points adds up.

583

:

And, we had, I think 30,000 tons,

the turn of last century:

584

:

and now we've got 200,000 tons.

585

:

So it's, most of the tons, the, the gold

has been produced now, but still, uh, it's

586

:

a very, it's, it's a very constant amount.

587

:

and this is the unique thing.

588

:

So this makes it a, a good store of value.

589

:

And this makes it the

good money, basically.

590

:

Right.

591

:

And that's why actually it,

it ascended to, to money.

592

:

and it is no mon no one else's liability.

593

:

Right?

594

:

I mean, we talked about that as well.

595

:

and this again, I think is a

very important prerequisite

596

:

for, for real money.

597

:

You, you want, uh, money to be an asset.

598

:

You want the money not to be

in another man's liability.

599

:

and, this is, this is why gold has

such great characteristics for money.

600

:

yeah.

601

:

And, and this is also the reason now going

back to your initial question, why it

602

:

actually doesn't have the pay interest.

603

:

Because, uh, if think about alternative

investments, and actually one

604

:

shouldn't, in our view at least directly

compare gold as money or as, as, as a

605

:

non-fire money store value with, with

productive assets like bonds or stocks.

606

:

But, uh, in, in these cases, if you,

if you lend to a government, as we

607

:

also discussed already, it comes,

there is always risk involved.

608

:

There's a counterparty risk involved

if you give some money to, to, to

609

:

an entrepreneur, to if you invest in

a stock, there's an risk involved.

610

:

That's, that's why there is a

justification for a compensation

611

:

for this kind of risk.

612

:

but if you, if you basically

don't give, give any.

613

:

If you don't have any, counterparty

risks, actually you can make the

614

:

argument, you don't actually are

entitled for, for yield, right?

615

:

If, if you, if you have the cash

in your pocket, you also don't

616

:

get, uh, any interest by the way.

617

:

You only get it if you, if you put

it on, on the banks and then you're

618

:

already, uh, taking risk again, right?

619

:

So the is,

620

:

Rodrigo Gordillo: of the time if you just

621

:

Mark Valek: yeah.

622

:

Yeah.

623

:

Correct.

624

:

So gold is money.

625

:

I think gold is the natural

money or it, it, it has very,

626

:

good characteristics of money.

627

:

And that's the reason why

central banks hold it.

628

:

Because at the end of the day, and

it's a great Greenspan quote, uh,

629

:

you know, in, in times of extremists,

gold will always be accepted.

630

:

And, and, and they know to recapitalize

the system, they need an asset,

631

:

which is, is no one's else's

liability, which is not inflatable.

632

:

Uh, and that's why they hold

it, because it's the real money.

633

:

Rodrigo Gordillo: And so shifting a

little bit to the new gold Bitcoin, I

634

:

know you guys did some work on that.

635

:

you tell us what you guys

think about Bitcoin and how it

636

:

relates to the characteristics

of gold and how it doesn't?

637

:

Mark Valek: right.

638

:

I mean, it's funny because gold is an

emotional topic because of these topics

639

:

which we already have been talking about,

uh, which, uh, these concepts are not

640

:

so widely, thought of in the financial

world and the monetary system also not

641

:

such a big topic of the typical investor.

642

:

and now with Bitcoin, this is even

in my experience, at least more, more

643

:

controversial, more emotional when, when

it comes to Bitcoin relative to gold even.

644

:

So, I think that's, a good, uh,

transition to Bitcoin because, uh,

645

:

building on what I just, laid out, yeah,

Bitcoin was basically, I think designed

646

:

obviously with, by whomever with a lot of

knowledge about the evolution of money.

647

:

So they were very, conscious of,

the problem obviously, of, of

648

:

this debt-based monetary system.

649

:

but, they also knew about the gold

advantages, but, but they actually try

650

:

to improve gold, E even, in, in, in the

sense that, there is not even this 1.5

651

:

percentage points inflation, but at

the end of the day, zero inflation.

652

:

so I think this is, uh, obviously a

very big part of Bitcoin's appeal.

653

:

its absolute scarcity.

654

:

and that is a concept which one really I

think has to think about harder than one

655

:

may think initially because it's, it's

really a, a, new concept for, for humans.

656

:

There, there hasn't been, uh, an

asset which has been absolute scarce.

657

:

At least not the fungible one.

658

:

Obviously we have art

pieces, unique art pieces.

659

:

There's only one Mona Lisa and so on.

660

:

But you can't, definitely

can't use Mona Lisa as money

661

:

because there's only one, right?

662

:

You need a fungible, money to have

the, to, tick of all the boxes

663

:

for the requirement of money.

664

:

So Bitcoin brings, uh, along

fungibility, but it brings

665

:

along absolute scarcity also.

666

:

And this is the first time what we, we've

been confronted with, with such an asset,

667

:

which in digital asset, which again, may

makes it difficult for a lot of people

668

:

to wrap wrap their heads around it.

669

:

Uh, you cannot touch it.

670

:

so it's, it's perhaps less intuitive

as, as gold because if, if you

671

:

do touch this gold, you, get

some kind of a sense of, value.

672

:

has something mystically to, to it.

673

:

I think for most people

that that's the case.

674

:

Um, but you, you have

none of that with Bitcoin.

675

:

so, so it's, it's, it's really, um,

the scarcity argument obviously.

676

:

Which, which, which is important.

677

:

also, so also one can, I mean, we've,

we've done, we've done all, all kind

678

:

of comparison between gold and Bitcoin.

679

:

Obviously we're not the only

ones and, Bitcoin has advantages

680

:

relative to gold as, as money.

681

:

I would definitely say that.

682

:

but it also has disadvantages.

683

:

But the fact, the matter of the

fact is it has been, discovered also

684

:

as an alternative store of value.

685

:

And I think one can, best

compare it with gold.

686

:

It's not the perfect,

comparison, but it's it.

687

:

People who invest in Bitcoin,

have similar motivations, uh,

688

:

as people who invest in gold.

689

:

Rodrigo Gordillo: And the

design of Bitcoin has, you know,

690

:

similar, design features as gold.

691

:

I think.

692

:

I think that's the idea, was

to make it a gold alternative.

693

:

Just simply by how the stock to

flow works, how the fact that it's

694

:

gonna be scarce, and then after

that it was a network effect,

695

:

whether it was gonna be adoption.

696

:

I mean, gold, why gold versus

any other metal historically.

697

:

you know, we can talk about that.

698

:

But the, the reality is that society

has accepted gold is a medium of

699

:

exchange, is a store of value.

700

:

Every major economy has some gold.

701

:

Most individuals, um, in one way

or another are, you know, backed

702

:

to buy gold because they live

in the country that owns gold.

703

:

And now we have Bitcoin that

has a similar characteristic.

704

:

The question is, you know, what are the

blind spots of both gold and Bitcoin?

705

:

Um, and I think they, they generally

tend to compliment each other.

706

:

It's an interesting use case here.

707

:

So there's, as, as we're, as Bitcoin

becomes more and more adoptive though,

708

:

what are you guys, what are you guys

trying to tell us here with this chart?

709

:

Um, on, in

710

:

Mark Valek: Yeah, so exactly.

711

:

So how, how to measure gold,

uh, and, and, and we measure

712

:

that in a, in a monetary sense.

713

:

And now building of our gold prediction,

gold model, we, this year for the

714

:

first time integrated to evaluation

model relative to, to gold because

715

:

as I said, both, both assets are

used for similar use cases, obviously

716

:

as a store, store of value or

speculation, however you wanna put it.

717

:

But, uh, what we are seeing here is

basically the, the market capitalization

718

:

of all global above, uh, ground stock.

719

:

So gold, these 220,000 tons,

priced at, at at market.

720

:

And we are somewhere at 19 trillion.

721

:

sorry, about 22, trillion

dollars currently market cap.

722

:

So that would be the, the, the

golden area, uh, representing the

723

:

market capitalization on the left.

724

:

And, uh, we are somewhere about,

at over 2 trillion, dollar, all

725

:

the Bitcoin market capitalization.

726

:

So, so roughly a ratio of one to

10, or in other words all world's

727

:

gold is, is worth 10 times as much

as all Bitcoin, which are produced.

728

:

And then in both cases we, in

Bitcoin's case, by the way, we know

729

:

more exactly, uh, how, how the exact

supply will, will be in, in the future.

730

:

But in Gold's case, we,

we know it pretty good.

731

:

We, we estimate that the gold,

exploration in, in of the next five

732

:

years plus our, our, our, our price

targets in the conservative range.

733

:

It's, as I said, 4,900, let's

call it 500, uh, $5,000.

734

:

That would bring Mark Gold's

market cap up to 38 trillion.

735

:

So that's almost a 2x still

from, from here, uh, not quite.

736

:

And, Bitcoin, uh, if one

looks at the relative.

737

:

at the ratio, basically, we, we can see

obviously that the market cap has been

738

:

growing much faster in, in Bitcoin, but it

also has been growing much more volatile.

739

:

So the, the, the ratio has been

going from coming from zero

740

:

basically, and, and, and moving up

to sample percentage points roughly.

741

:

Um, with, with a lot of draw, uh,

draw downs and want to point out that

742

:

the right hand scale is logarithmic.

743

:

which, basically doesn't, the drawdowns,

uh, don't seem so significant, but

744

:

there was quite significant obviously.

745

:

But, but I think the, the

logarithmic scale shows, uh,

746

:

this, this increase, uh, nicely.

747

:

And also it shows, uh, a small

decrease of this increase, right?

748

:

So the rate of re return is, is,

being far greater with Bitcoin,

749

:

but it has been, coming down

slightly over, over, over the years.

750

:

And we, we, we basically

extrapolated this, this trend.

751

:

So our, our estimation is,

uh, our premise is that.

752

:

Bitcoin will keep

growing faster than gold.

753

:

We think gold will keep growing,

Bitcoin will keep growing faster.

754

:

And, and I mean this is a numbers game

to be, to be honest, but, we picked a, a,

755

:

a, a number of, of 50 percentage points.

756

:

So we could imagine that at the end of

the decade, coming from 10 percentage

757

:

points, market cap, where we're currently

roughly, we, we may end at 50 percentage

758

:

points, market cap, uh, in terms of

Bitcoin to gold market cap ratio.

759

:

Right?

760

:

and that's brings you

to quite high numbers.

761

:

I mean, uh, this is also this table

we included to, for everybody to, to

762

:

plug, plug in their own expectations.

763

:

Um, but with these two numbers, so 50

percentage points, market cap and the,

764

:

and the, and a price of 5,000 at the

end of the decade, that leads you to

765

:

very high six digit, uh, prices, in,

five years time, which yeah, may, may,

766

:

which is bullish, which is optimistic.

767

:

Uh, uh, I would like to add, uh, here,

but we don't think that it's, uh,

768

:

we, we think it's, it's achievable.

769

:

It is achievable.

770

:

In fact, if, the ongoing trends,

remain intact, then we will land

771

:

in, in such a kind of a range.

772

:

Rodrigo Gordillo: Hmm.

773

:

Yeah, I mean it's an interesting way

that you guys have modeled this up.

774

:

It's certainly, you know, if, if there

is continued debasement, again, because

775

:

of the way that Bitcoin has been

designed it, it also makes sense that

776

:

we're gonna get more and more adoption.

777

:

We're seeing institutional adoption now.

778

:

BlackRock has something that's investible

for the traditional finance individual,

779

:

so it's becoming easier to accept.

780

:

It almost feels like people are

talking about Bitcoin more than

781

:

they're talking about gold.

782

:

So it also attracts that it'll probably

get higher adoption faster, right?

783

:

Mark Valek: Yeah.

784

:

And what I,

785

:

Rodrigo Gordillo: Yeah.

786

:

Mark Valek: when, what, what I

always, can witness is that these two

787

:

assets are nearly all the time being

mentioned in the same discussion.

788

:

Right.

789

:

I mean, that's, that's,

that's, that's really evident.

790

:

And that's also, I mean, we wrote 2019

Gold and Bitcoin Stronger together,

791

:

and that is also what we do as a

asset managers management company.

792

:

In 2020, we launched our combined Gold

and Bitcoin product because we were of the

793

:

opinion that in, in combination, these two

assets have a better risk return profile.

794

:

And I mean, so far we've been, uh, I think

spot on with that idea and also with,

795

:

I mean the track record of the assets

and of the combination, I think, uh,

796

:

also confirms this, this thesis so far.

797

:

So we, we have now a hard asset or

sound money, however you want to

798

:

put it, bucket, which I think, will

more, more become kind of, building

799

:

block of, of people's portfolio.

800

:

You can do it on a single level where

you can basically adjust your, the,

801

:

the composing of, of this hard asset,

uh, block, as, as you see fit or, or

802

:

you can do it in, in a combined way.

803

:

That's what we offer basically where we do

the rebalancing, uh, for, for our clients

804

:

where one can also have the advantage

of, an overlay, derivative over overlay.

805

:

Which, which then by the way, makes

it possible to, to earn some yield.

806

:

So we solve the yield problem

also in, in that regard.

807

:

but yeah, so, so I think, uh, this,

this is going into this direction of the

808

:

last sentence in, in, in this regard.

809

:

people like Ray Dalio who I think are

very highly regarded, especially among

810

:

asset management managers or, uh, to me,

I think he's, he represents like the,

811

:

the king of strategic asset allocation.

812

:

I mean, he's referred as hedge fund

manager, but I think the real, uh,

813

:

USP wa, was the combination, uh, the

structuring of, of the portfolios

814

:

at, at, at Bridgewater, what they do.

815

:

Anyway they, he also, uh, I think two

or three years by now ago said, I like

816

:

my gold with sprinkles of Bitcoin on it.

817

:

So he also sees these two

assets as in, in one bucket.

818

:

At least that's what I took

away from, from that comment.

819

:

And uh, I guess this is

slowly, um, but steadily moving

820

:

into this kind of direction.

821

:

Rodrigo Gordillo: Very

822

:

Mike Philbrick: I like that.

823

:

I like that.

824

:

We've got maybe five minutes left.

825

:

Do you want to talk a little bit about

how you guys reimagined the 60 40

826

:

through the context of, of a new regime

and, and, uh, gold and silver stocks?

827

:

I.

828

:

Or is there another topic

that you'd like to hit?

829

:

Mark Valek: I am happy to do so.

830

:

No, happy to do so.

831

:

The new 60 40, uh, portfolio is something

esented last year actually in:

832

:

we, yeah.

833

:

So you know about the classically 60

40 portfolio, multi-asset portfolio

834

:

where you have 60% equity, 40% bonds,

or some kind of variation thereof.

835

:

and that I think does make sense

from a risk adjusted perspective,

836

:

but especially, in, in, during a

time horizon where you have falling

837

:

interest rates or disinflation, which

basically comes with each other.

838

:

And, uh, because, uh, you have

typically the bond part of the

839

:

location which profits when, when

you go into recession, and, uh, the

840

:

equities when, when you have growth.

841

:

Um, so you've got slightly

negative, correlation between

842

:

these assets in general.

843

:

And so, so, and both

of them produce yields.

844

:

So, so in, if you add them up, you

have, uh, a superior risk adjusted um,

845

:

return profile, and that's what's most,

mostly about in asset management, right?

846

:

but, uh, we, we are of the opinion that,

uh, basically since, since we see that,

847

:

uh, the, interest rate trajectory is.

848

:

We, we've, we hit zero, right?

849

:

And now we, we are of the opinion that

we're rather seeing a bull market in

850

:

interest rates, uh, in other words,

a bear market in, in bonds, uh,

851

:

something again, similar maybe to, to

the seventies and you in, and that's,

852

:

that's awful for, for this combination.

853

:

We saw that in 2022 already when, when

you had a year where stocks and bonds

854

:

combined actually, uh, really had a really

bad performance because both assets fell.

855

:

You had a, a positive correlation,

uh, in a falling, in a falling market.

856

:

That's not what you want to have.

857

:

And, uh, I think that was an indication

for, for more of those or similar years

858

:

to, to come potentially, especially

again, if we see second inflation wave

859

:

than, than these kind of portfolios, I

think are very, very much endangered.

860

:

So that that makes an argument to

basically reconsider especially the

861

:

bond component of, of this this 60 40

portfolio, which, which we did and,

862

:

find, substitutes for, for, for bonds.

863

:

And I think this is, this is

going on especially with gold.

864

:

So gold, I think to some

extent there's been.

865

:

Still very slowly, especially

in this institutional level.

866

:

Not, not at all yet, I'd say, but

uh, to some extent being substituted

867

:

and, and we see this as, as a trend.

868

:

Um, and, and also another argument in

favor of gold, I think, I mean, typically

869

:

if, if you have a few percentage points

at all at maximum in your conventional

870

:

multi-asset portfolio, uh, I think

one can make the argument also from

871

:

a risk point of view, since it is

so unique, the asset, and it doesn't

872

:

have an, uh, a counterparty risk.

873

:

If one, if one takes into

consideration the whole return

874

:

distribution, you don't actually have.

875

:

Like kind of a black swan event with,

with gold, obviously the price can

876

:

fall, but you don't have a sanctioning

event where you are something that,

877

:

uh, and there, by the way, I also think

it's, it's advantageous to Bitcoin.

878

:

You have potentially some

technical problems, which I think

879

:

the risk is pretty low also.

880

:

But, but I think, I'd

say it's not zero, right?

881

:

So you have all you, you have in, in

all kind of different asset classes,

882

:

but especially in bonds, you have

like left end, probability, which

883

:

would be very bad if, if that happens.

884

:

And you don't have that with gold.

885

:

And I think also from that perspective

gives you a great argument to

886

:

increase your, your gold portfolio

significantly because you don't, you

887

:

don't occur some, some kind of a black

swan event with the gold generally.

888

:

So, so, uh, we try to structure, uh, a,

a, a new 60 40 portfolio accordingly.

889

:

And uh, we increased.

890

:

So we had, in, in the 60%, what is

typically the equity portion, we

891

:

put in all the bonds and all the

equities in, in, in 60%, so that we

892

:

ended up with 45% equities and only

15% bonds, which brings it to 60.

893

:

That's the 60% and the 40% in our new

60 40%, portfolio is a hard assets,

894

:

basically non inflatable assets.

895

:

So, uh, we, we've got a chunk of

security gold in there, but we've got

896

:

some performance gold, as I said, that

would be mining equities in there.

897

:

We've got a, a, a small slice of

commodities in there, and also a

898

:

small slice of Bitcoin in there.

899

:

so we come up to, with, with a,

with a hard asset block of, of 40%.

900

:

and, and and we are of the opinion

that, this is going to outperform the.

901

:

the conventional 60 40 per portfolio.

902

:

Uh, which it has, by the way,

since:

903

:

that ends up in a few years time.

904

:

Rodrigo Gordillo: Yeah, so, so I

think I just found it, um, just to

905

:

quickly share with everybody here.

906

:

Uh, 60 40 into that combination.

907

:

Here you have 45% stocks,

15% bonds, 15% of safe haven

908

:

gold, 10% of performance gold.

909

:

So again, performance gold is the idea

of, uh, miners, silver, et cetera, right?

910

:

10% of traditional

commodities and 5% Bitcoin.

911

:

So for everybody, this is in

the, In Gold We Trust playbook.

912

:

Okay?

913

:

Mark Valek: So this, I'd say an extremely

unconventional, uh, allocation currently.

914

:

but I mean, it's, it's not so

far from my personal allocation.

915

:

Uh, so, so we, we really, I mean,

practice what we preach and, uh, I

916

:

think it's so far for this decade,

this has been doing very well.

917

:

And, um, as I said, I think the

dynamics are, are in place for this

918

:

portfolio to, to keep up performing.

919

:

There are risks, uh, obviously

involved, uh, with every asset class,

920

:

with every, with every strategy.

921

:

But, uh, we are quite, convinced

that that's a good way to go.

922

:

Mike Philbrick: Given the

regime, sounds like a sound plan.

923

:

Rodrigo Gordillo: Yeah.

924

:

Well, thank you, uh, Mark.

925

:

Really appreciate your insights today.

926

:

Very insightful.

927

:

love, you know, this is the first time

I've actually read this report, so it

928

:

provides a lot of insight on, on all

things precious metals and Bitcoin.

929

:

I recommend everybody download

the chart book or read the paper.

930

:

Um, but, uh, just before we sign off,

um, tell, just tell the audience,

931

:

uh, where people can find you, what

your, what you, you guys do and offer.

932

:

You mentioned, uh, fund and

investment opportunities.

933

:

so tell us a little bit more about that.

934

:

Mark Valek: Yeah, right.

935

:

So, uh, basically our fund business

can be founded Incrementum dot LI.

936

:

That's our homepage here in Liechtenstein.

937

:

and, uh, we have our In Gold We Trust, uh,

report at, ingoldwetrust, all one word,

938

:

dot, report, and everybody can subscribe,

uh, can download, without subscription.

939

:

We keep it very open.

940

:

personally, I, uh, we, we have a, um,

a Twitter, Twitter feed InGoldWeTrust

941

:

Twitter feed, which is quite active.

942

:

so we can be found, on, on these sources.

943

:

And yeah, if, if anybody has

question can drop me email.

944

:

Rodrigo Gordillo: Amazing.

945

:

Thank you Mark.

946

:

Really appreciate your time and the

hard work that you guys put in on this.

947

:

we'll, uh, we'll hopefully have you

back again when gold hits 5,000.

948

:

but uh, yeah, if anybody has any

questions, you can go to those

949

:

two websites and, uh, and contact,

uh, Mark and team directly.

950

:

Thanks again for your time.

951

:

Mark Valek: Thank you.

952

:

Thanks for the invitation.

953

:

Have a great day.

954

:

Mike Philbrick: Thanks all.

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Profile picture for Rodrigo Gordillo

Rodrigo Gordillo

Rodrigo Gordillo is the President and Portfolio Manager at ReSolve Asset Management Global, an alternative asset management firm specializing in globally diversified systematic investment strategies. He co-founded ReSolve Asset Management Inc. in 2015 and expanded to ReSolve Asset Management Global in 2021. Starting his career at John Hancock focusing on pensions, Gordillo transitioned to the ultra-high-net-worth sector with i3 Advisors Inc. He held significant roles at Macquarie Private Wealth, Dundee Goodman Private Wealth, and Richardson GMP, enhancing his expertise in investment decisions and client wealth management.
Profile picture for Corey Hoffstein

Corey Hoffstein

Corey Hoffstein is the CEO and Chief Investment Officer of Newfound Research, a quantitative investment and research firm based in the Greater Tampa Bay Area, United States. Hoffstein co-founded Newfound Research with the aim of assisting investors in proactively managing investment risks through diversification, specifically by leveraging Return Stacking™ strategies. The firm specializes in managing alternative strategies and capital-efficient solutions, enabling the implementation of these innovative investment concepts. In addition to his role at Newfound Research, Hoffstein also serves as a Portfolio Manager at Return Stacked® Portfolio Solutions.