‘Highly Uncertain’ Economy Ahead: How To Beat Volatility (Uncut) 01-30-2025

‘Highly Uncertain’ Economy Ahead: How To Beat Volatility | Lobo Tiggre

We’re back at the Vancouver Resource Investment Conference 2025. Lobo Tigre of the Independent Speculator joins us once more. We’re going to be talking about what to do in 2025.

What’s a Trump trade for you, Lobo? Welcome back. Welcome to me, to the audience. I love all these interviews we have.

Thank you. And in person. It’s always more fun.

Yeah, we had an in-person one a year ago. As we’re recording, Trump is just taking office, and we have the memos flying, the executive orders. It’ll be, whatever happens this year, it’s not going to be boring.

With so many different ways things can go, and then the responses from trading partners to whatever tariffs are done or not done, all this stuff, it’s highly uncertain. The one thing that is certain is volatility, increased volatility. How do we play volatility? It’s not the VIX.

I don’t know what the hell that thing measures, but it sure isn’t anything that you or I see in our stocks these days. So many ways we can go to that rabbit hole. Let me say, first and foremost, that our Goldbug audience, they’re not crazy.

I think they’re right. I think gold is an absolute essential, but it’s not a play. It’s not a speculation.

It’s not even an investment. It’s a hard asset. It’s savings.

It’s insurance. And I think in volatile times, that’s more important than ever. As far as making money goes, my mentor Doug Casey used to say, make volatility your friend.

So a couple of ways you can do this. The simplest way is just to, if we expect volatility, you look at the things that you want to invest in, the things you have confidence in, and then you wait for these big fluctuations and you buy at that point. Another strategy that we’ve been using in the newsletter is you can sell puts.

So you don’t know what’s going to happen. It’s volatile. It’s uncertain.

But if something that you absolutely, you know, a company that’s a grade A, tier one, and you really like this, but it’s not on sale, well, maybe this volatility can be your friend. So if you sell puts on it and nothing happens, you make the money from selling the puts. And if you get put, you know, there’s some big shakeup in the market and you get filled at a lower price.

Well, then you take ownership of something that you wanted anyway. So this is how I’m thinking of 2025. I don’t know what’s going to happen.

Nobody knows what’s going to happen. We just know that we’re going to see lots of up and down in the markets. And so I’m thinking about ways to take advantage of that volatility.

What’s your underlying assumption behind this heightened volatility? Why do we have so much uncertainty after the Trump inauguration? I mean, we already know who won the election. It’s Trump. We already know what he wants to do.

Well, but do we? We were told that we’re going to be, you know, tariffs across the board on day one. And now we have a memo researching tariffs, right? So things aren’t even… the surprises are starting already. Doge got sued immediately after the inauguration.

So, you know, how do you have a game plan? Where do you know if you’re in uncharted waters, it makes no sense to pull out a chart and say, here’s the plan. So my general approach is just to assume that things are going to fluctuate in big ways and how we take advantage of that. But then the other thing is like with the gold comment.

I don’t own gold because, and you’ve heard Rick Rule say this, I’m sure he’s told you on interviews with him. I don’t own gold because I think it might go up to $3,000. I own gold in case it goes to $10,000.

And, you know, in that circumstance, I’ll be very happy to have a financial asset that I can be long for which there is no short, there is no counterparty risk. That’s what I mean by insurance. In a world like today, and we’re, you know, we’re here at an investment conference, we’re thinking mostly investments.

And I don’t mean to beat up on Trump, but things that he’s working on could go wrong. Negotiations in Europe, you know, who knows how well he really knows Putin? What if things don’t go the way he expects? Or what if, you know, he’s successful in ending the war in Europe by letting the Russians win. Like you cut off funding to Ukraine and Putin takes a chunk of it.

What does that tell Xi over in China about Taiwan? If the U.S. is going to back away from allies, then that, it seems to me, would encourage other adventurous, powerful forces to sally forth. This is a world in which I think even the average Joe who isn’t a gold bug, you know, would think about, you know, maybe a little bit of insurance isn’t a bad idea. But as far as making money in the markets goes, since I don’t know which way the markets are going to go, that’s why I’m talking about being prepared with stink bids in case of big fluctuations, things like selling puts.

That’s how I’m thinking. Well, what about buying and holding the S&P 500 and just forgetting about it for the next four years? Here’s my theory. Perhaps Trump is just going to rehash what he did in the first term.

I don’t know, but I’m just speculating here. And what happened to the stock market between 2016 and 2020, barring the COVID pandemic, which crashed everything? Before then, the stock market was up, gold was flat until 2019, then it shot through the roof. So, you know, it was a good time to be an investor.

Two things. One is, if you look at the endpoints, 2016 to 2020, you draw a straight line, that’s not what really happened. And especially for us as resource investors, you know, are you going to buy the S&P? That’s not what I do.

You know, I buy mining stocks and things like that. So, you know, if you look at the endpoints, that I think is pretty misleading towards what actually happened. And what happened with Trump 1.0 and he slaps tariffs on China, copper took it on the chin.

Mining stocks in general had a very tough year in 2017. And we didn’t see other factors come back until later. So, you know, maybe some very long term, long term vision kind of investors can just like buy and hold and ride out the volatility.

But most people don’t have the intestinal fortitude to do that. You buy something and it’s down 50% and you’re pulling out your hair and people will end up buying high and selling low. So I think I just said what nobody knows what’s going to happen.

But we do have some data. We do know that in Trump 1.0, the tariffs were bad news, especially for industrial metals. And it wasn’t even so much fun for gold and silver at first.

And eventually we got it. Another thing we do know, we don’t know what will happen, but we do know that the stated agenda is pretty inflationary. There’s a lot of people who think, you know, Elon and Vivek are going to come in there and cut trillions of dollars of government spending.

But nobody’s ever done that before. Like honestly, I think the rocket science that Elon’s working on is easier than the idea of getting the United States government to actually spend less. Sure.

It just, that’s, you know, they don’t even have the power to do that. They have advisory power. You know, maybe they can primary some people.

But I think it’s a really big ask to think that we’re going to actually cut spending. But if we’re going to be cutting taxes without cutting the spending, the deficits keep blowing up. And what does that mean for the economy, for inflation? Well, you’ve spoken to Lynn Alden, right? So you’re aware of her fiscal dominance thesis.

I think we see fiscal dominance in spades. I think that means for the economy that what the Fed tries to do with monetary policy is blunted. It’s less effective.

Arguably, we’re seeing that already. I think it’s inflationary. The money helicopters, if you think about it, we’re running wartime levels of deficit spending and we have been since the COVID lockdowns.

The money helicopters never really stopped flying. And I think this is why you’ve been very nice. You haven’t put me on the spot about my missed call for 24.

But I said we would probably have undeniable recession by the end of last year. I was wrong. You could argue we had recession in the manufacturing.

We had some rolling recession. But I said undeniable recession by the end of 24. So if someone gets to you and some people have told me we’re in a recession now, how would you respond to that? I would say arguably, yes, in certain areas.

And maybe the NBER in two years will say, you know what, we were in recession. But that wasn’t what I said. So I think objectively, I was wrong.

And I’m not just trying to do a mea culpa here. I’m trying to get to the point about the significance is, if my thesis was undeniable recession and then the money helicopters would fly, which would be inflationary. What the reality seems to have been is that the money helicopters never stopped flying.

We’re still spending at wartime levels, you know, trillions of dollars in deficits. And so that has held up, not just assets, it’s held up the labor market. If you look at the SOM rule, which we’ve talked about, or the Gundlach indicator, these triggers that are coincident indicators of recession have been triggered.

And yet we really don’t see undeniable recession in the U.S. economy. So is a recession still an important narrative for this year? Maybe less. Maybe less.

You know, people say, oh, you’re changing your tune. Well, yeah, if I was wrong, then I need to look at what actually happened. Right.

So if we didn’t get undeniable recession, we’re talking U.S. here, and commodities are quoted in dollars. So that matters. I’m not ignoring the rest of the world, right? I’m just saying for us as commodities speculators, this this matters.

And if the fiscal dominance prevented anything that anybody would recognize as recession in 24, and Trump wants to keep the spending going and he wants to, you know, give people no taxes on tips and no taxes if you’re a firefighter and no taxes on overtime, all this stuff, right? This is more fiscal dominance we can see ahead. So the takeaways, let’s let’s let’s let’s set the economy aside. I’m expecting higher inflation.

And that’s bullish for commodities writ large. And I think it’s particularly bullish for the monetary metals, because it starts to look like potentially stagflation. Right.

Well, we have to bring up cryptos. And I only bring this up because Trump is the first pro crypto president. This Trump coin that launched, what is it, 48 hours ago now went up 10,000 percent in the first 36 hours.

And the Melania coin is up too, right? Yeah, he’s made more money with cryptos, with his coin, than like the last 20 years of his own business. Has he made money? Is it real? We don’t know. His coin made money.

Yeah, his coin made money. Then it crashed 50 percent today when Melania launched her coin. So this is just frenzy going on.

Is capital going to flow away from this sector, the junior resource sector, into this? I think that’s a legitimate question. Whether you believe that any crypto, even Bitcoin, has any value or not is a separate consideration. If the market is going there, you can’t ignore that as an investment.

It’s one more angle in here. And that is, whatever Trump actually believes about cryptos and whether they’re, you know, he thought it was a scam before. He might still think that.

But by talking about the Bitcoin reserve and making friends with the Bitcoin crowd, that helped. I mean, we were talking about this razor thin election and this swung the tide for him. And not only that, it made the difference in red versus blue in Congress.

And so this is really important. Like, it doesn’t matter what he believes, doesn’t matter what he says. He knows that the election was helped by this pool of voters.

And so I think he and the Republicans are going to pander to that crowd, whatever they believe. And so there’s a real chance that this Bitcoin reserve could go forward. I think it’s crazy.

But crazy doesn’t matter if you need to pander to voters. Well, let’s put it this way. Bitcoin and cryptos aside, is there room for this sector, the resource sector to climb? Is there a bull case for 2025? Yes.

But if you’re waiting for the rising tide to lift all ships and all this momentum money to come into gold, like, let’s say gold goes, as the mainstream guys are saying, Bank of America, you know, still $3,000 gold. Let’s say we get $3,000 gold. You know, a year ago, we would have said, well, surely that would bring everybody flooding in.

You know, how could you have, you know, this record high of $3,000 gold, the rising tide will lift all ships. It’ll be great. Everybody will pile into this.

Yes. Well, you know, gold going to $3,000 from where we are now, that’s what, a 15% rise? That’s nothing compared to what one of these cryptos can do in an hour. So that kind of money that might come chasing in after these headlines, why would it go to gold if you can buy some meme coin that can give you 10,000% a day? Okay.

Gold, but the question is, would it go to gold stocks? There’s a case for gold, right? Yes. I hear you. But let’s just start with that.

Sure. So, bear in mind, dear audience, I’m not trying to be bearish here. I’m not saying gold is done, I’m not making a bear case.

I’m just trying to be honest and answer the question here. I think there is a, not just non-zero, but I think there’s a substantial risk of momentum chasing money of the sort that rises all ships, not coming here. And if it’s not going to go to gold, why the heck would it go to the gold stock? Absolutely.

So the takeaway here is not throw up your hands and give up and buy shit coins, sorry, buy meme coins. I’m saying this is a stock picker’s market. The other data we got from 2024 was that the better companies did do well.

Yes. Like people are pulling out their hair, complaining about the GDX didn’t really rise any more than gold. Like, why would you bother with the mining stocks if they’re not going to outperform the metal? Yes.

The metal doesn’t have operational risk or technical risk, right? So if the mining stocks aren’t going to deliver leverage to the metal, there is no reason to speculate them. What I’m saying though is if you’re a stock picker, if you didn’t just get the ETF or buy the index, if you pick the companies that actually delivered in 2024, you did beat the index. And by the way, you beat the S&P 500.

So I think this is a stock picker’s market. The rising tide might lift all the shelves, but I wouldn’t bet on it. I want to be not just defensive.

I want to make sure that I’m in the best place, whether it’s gold or uranium or copper or whatever I’m bullish on. I want to be a stock picker and I want to make sure that I have the best companies I can possibly put my money into. Let’s end it here.

You said you were wrong about the recession. What was the most surprising result of economic growth that we saw in 2024 that you were just not prepared to see that threw you off? The continued deficit spending. I really thought that after the COVID lockdowns and we kind of go back to normal, we go back to the office.

I thought the government would, you know, it’s not going to live within its means, but I thought we might see at least some trillion dollar deficits, you know, go back to sort of the old normal. And that just never happened. My thesis was, you know, hard landing and then the money helicopters fly.

And I was very surprised that the money helicopters just never stopped flying. And yeah, the so what about that is looking forward is I don’t see anything that’s going to ground them now. That’s inflationary.

It’s bullish for any real assets. I think, you know, turmoil aside in the near term, I like copper. I like uranium.

I like gold and silver. And you know, I think it’s going to be an exciting time for resource speculators if they are stock pickers, if they select the better company. So that’s where you come in.

Where can we find your stock picks? Well, thank you. The stock picks are in my flagship newsletter, the Independent Speculator. If you don’t know me, you’re not ready to trust me with that.

We have, I won’t say cheap because it’s not cheap. It is affordable service called MyTake, which is actually a database. It’s not a portfolio.

It’s a database of hundreds of resource stock evaluations. You get a clear thumbs up and thumbs down. It’s a due diligence tool.

So I would say that’s the starting point. Good. Excellent.

Slobo, always good to catch up. Thank you very much for your take. And thank you for watching.

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