Today’s show is all about gold and precious metals. Our guest this week is Chris Blasi who is the president of Neptune Global Holdings. Chris has been in the precious metals business for nearly two decades and gives us some great insights into precious metals as an asset class and why he believes we are still in the middle stages of a large secular bull market in gold and precious metals with the greatest gains yet to come. We also talk about asset allocation and his views on cryptocurrencies in general. So if you’re wondering what allocation your personal portfolio should have with gold and precious metals, then this episode is for you. Let’s get right on to the show.

Jay: Hi, Chris. How are you doing? Welcome to the show.

Chris: Jay, how are you? It’s great to talk to you again.

Jay: Yeah. It’s been a while, and I’m interested to get you back on and talk precious metals since you’re sort of my go-to foremost expert in the space, and there’s a lot of interesting things happening there, and I think that a lot of investors are pretty interested in some of these moves we’re seen recently. So maybe for the audience listening in, you could give us a little bit of an introduction.

Chris: Sure. My name is Chris Blasi. I am the president of Neptune Global Holdings, also known as Neptune GBX, which means Global Bullion Exchange. Just a quick overview, we started as a regular full-service precious metals dealer back in 2002. So we’ve been in this for 16 years — basically, every step along with this secular bull market that we believe began in 2001. And we have differentiated ourselves. Even though we do provide all the traditional products for clients — the bars and coins — but we’ve kind of differentiated ourselves with some very unique physical precious metals offerings that actually have received patents but kind of stay true to physical precious metals ownership. And maybe we can touch on that a little bit later. But I always enjoy chatting with you, Jay, about the precious metals market and what’s going on at the macro level.

Jay: Yeah. Absolutely. And maybe if you could, give a little personal color. Have you always been in this space? And was the reason that you decided to start or join Neptune because of the secular bull market that you just described?

Chris: Yeah. Thanks for bringing that up. One thing I like to say is I do have a little bit of a diverse background, which I think all plays into understanding precious metals and not just saying, “Here’s an individual who has only been in precious metals. So his view is very limited.” I started with the traditional big broker dealer — Wall Street broker dealer — also went to a niche M&A firm, merchant banking firm. So I was kind of in those traditional Wall Street roles.

I did spend, also, a period of time in big technology. Without naming the name of the company, but I was involved with all of the financial service firms. And this was one of the major players.

But I was always a student of macroeconomics and trends. And in the late 1990s, through my own research, I was convinced that we would go into, in the new millennium, a protracted secular bull market in the precious metals. I was so convinced that this was going to be real and would materialize, that from the year 2000, 2001, I put all the ducks in a row and launched Neptune Global in 2002. So that’s why I got involved in it. It’s not by accident. It was by research. And I’m happy to say that despite the normal ups and downs in this market, it’s actually playing out exactly as the research I conducted over a decade and a half ago told me what was going to happen.

So it makes me excited. It also gives me a level of confidence when talking to investors and clients.

Jay: Absolutely. It’s interesting because in financial markets, people like to try to predict trends, and it’s difficult to do so. There’s a handful of people that are able to spot them and make big bets, and it’s clearly seems that you’ve successfully done so. Perhaps, Chris, you could shed some light on the broad overview. You stated [0:05:10] that the early 2000s is when the secular bull market began. Where do we sit on that in that trend right now? Is it too late to get in? Maybe you could give the audience a quick overview of what we’re looking at right now.

Chris: Sure. As I stated, I saw through the research that we were going to go into a secular bull market. And we need to separate and just clarify “secular” versus “cyclical.” Cyclical could be very short term. There are multiple cycles within a secular. A secular bull market runs long in duration — like 15 to 21 years. And it’s basically characterized by three major legs.

The first leg is up. The second… And these multi-year legs. The second leg, it pulls back and is multi-year and basically does a retracement. Basically, 50% of the gains are given back. And then the third leg is the most robust where the biggest gains are made. So where are we now?

The secular market started, this bull market started in 2001, ran from basically 2001 to 2012, where gold started at 255 an ounce at its absolute low in 2001, up to, we know, that little short-term peak at 1900. Then gold did that second leg — pulling back, literally to the dime, giving 50% back as gold dropped into 1030, and that ended in December of 2015. And we resumed, and we started this third leg on, literally, day 1 of 2016. So we know 2016 and 2017 were both up years for gold, and we believe this will be and the next few years will be up years. And the biggest years lie ahead.

And just to clarify, when I say “gold,” that is kind of just the word for the precious metals in general. Gold isn’t going to run and the others be left behind. And, just to say to your point, is it too late to get in? Absolutely not, because the third leg has the most upside. And we’re in the very, very early stages of it. So that’s our view.  

Jay: That’s a great overview. I wonder if I might be able to pull up a chart or something when we post this live so our audience can actually visually see where we are on that outlook. So it seems like a pretty exciting time right now. Obviously, the price of gold has been, even in the last couple of months only, has kind of fluctuated between the 1200 and where it is now range. There’s a lot of… Gold is an interesting one, as an investor, because it’s one of these asset classes that, from a general asset allocation standpoint, I think that all investors should have some sort of gold. Physical gold, in my view, is probably the best. And maybe you can talk to us a little bit about the physical versus the exchange-traded instruments and what your view or recommendation is there.

Chris: Sure. A couple of things. One thing about being a gold investor, you really have to have some grit. What I mean by that is most investors, unfortunately, need the crowd to give them the reassurance that what they’re doing is right. That’s why the crowd all moves together. This is typically why the small investor buys and sells at the wrong times. When they finally get full confirmation that everyone is in, they buy at the top and sell at the bottom.

What’s tough about being a gold investor, why these are a separate group of people, you’re making a decision based on your research, to go into an asset that has proven itself for 5000 years and without dispute, but you’re not going to get cheerleading from the mainstream. You’re not going to turn on MSNBC and CNBC and being told how smart you are. You’re going to be denigrated for all intents and purposes. And when you talk to your typical financial planner or the direction that most people are taking, if you really insist on gold, of course, they’re going to kind of shoehorn you into an ETF.

Now the problem with ETFs are they’re not all created equal. So some are, we’ll say, less of a play on gold. The big 800-pound gorilla is GLD. Right? Well, just look at their perspectives. It says it’s there to track the price of gold. And it talks about holding gold in unallocated form. You could parse all that, and what it’s basically telling you is they’ve obviously used derivatives. They have all sorts of caveats, should the market run away on them. And at the end of the day, you don’t own gold. They present it as something that’s convenient; something that supports the typical wealth manager/broker/dealer/financial planner because it keeps it within the exchange.

But since precious metals are, literally, the only unique asset that you can actually own, directly, like other commodities… If you like oil, you can’t put a big silo in your backyard and put a million gallons of oil in it. You’re kind of forced to use exchange-traded products. But here’s this rare, unique thing where it says, look, you can separate yourself from Wall Street, the exchanges.

So my point is always why would you give that unique benefit up of owning the actual asset and not having the counter-party risk associated with an exchange or a financial instrument between you and the underlying asset. So, even though maybe it’s a little more cumbersome, I think it is definitely in the investor’s best interest, when it comes to the precious metals portion of their portfolio, to stick to the physical and the real physical.

Jay: Yeah. I’ve done a little bit of research, but I think that I have to agree with you there, Chris. And I think it’s worth going through that process, just for… I actually don’t own any gold, and I personally have been a little bit of research recently, actually, because I do think that it’s an important part of every proper asset allocation strategy. And I’ve seen allocation from… Obviously, if you’re a gold bug and this sort of thing, it could be as high as — I don’t know — 25% maybe. But for even just the average investor who is looking to diversify, I’ve seen somewhere between — whatever — one or two percent and upwards to five to ten percent of your portfolio, depending on your comfort level.

As far as storage goes, what are some quick tips there? Are there certain things to avoid, pitfalls that you need to be aware of? Obviously your company, as well, provides storage services. Right?

Chris: Yeah. And we do it in conjunction with a major non-bank bullion depository, and that’s a key — non-bank, outside the banking system. And what we’re about to do — a couple of great things, because of this partnership — it also serves as a check and balance. So when our clients buy and sell precious metals with us and they opt to store — of course, we do delivery also — but for those that opt to store, which are many, they get their transaction confirmations from us. But they also get — once the metal is delivered into the depositary, and it’s allocated into a special allocated account and in the client’s name — the depository confirms with them directly. I mean, that’s a unique relationship that we’ve been able to forge with our depository.

So, you’re getting all these checks and balances, and that’s important. We want that transparency. And also, we get a very, very aggressive storage rate from them, which we pass on to the customer so that storage does not become a deterrent. And that rate is basically the same as what the ETFs charge on their management fee. So you’re not saving. If you say, “I’ll avoid storage by buying GLD,” basically, the rate they charge — and of course, they can’t invoice you for that. They just keep reducing the share price. They kind of liquidate. We do an invoice, but at the end of the day, if the cost of storage through us is basically the same as your fee to the managers of GLD or SLV, we think, why would you not want the asset?

And the other thing, like I said, we do metal for delivery to people, and that’s great. But what some people forget is when it’s in your possession when you want to sell… When the precious metals really hit their stride — and they’re going up. They have been the last few years. Gold was up 12% last year and 16% the year before, so you can’t say the precious metals investors aren’t doing well. But when it’s time to sell, when you want to take your profits off the table, when it’s in storage, it’s just a phone call away. You call up; you sell; it’s all locked it. T+2. We’re giving the funds back.

If it’s in your possession, you have to get it back to market. And realize, you’re talking about big, bulky, and not inexpensive to ship because insurance is, obviously, a big component. So people should think this through, especially if their time horizon for going into the precious metals is to buy, hold, and probably sell out in a two-to-three-year time period, waiting to hit a price target. The storage and the ready-to-sell and ready-to-lock-in is something to seriously consider.

Jay: It does make a lot of sense. I think that all of us as investors, one of the… It’s both the exciting part of being sort of a multi-asset investor. And the tedious part is keeping track of all of your positions and reconciling all your balances. There is software out there. I use an Excel spreadsheet. But part of it’s fun — the fun part — looking at the different assets you have and your balancing and this sort of thing. But also, as you mentioned, part of it is tedious, trying to keep up with the bookkeeping and not for nothing. Like you said, when you have to trade that in, it is tedious and cumbersome. And you have to ship it in or find a dealer that will take your precious metals. So I can see the value in storage.

So just logistically, let’s say I were to want to buy some gold bullions for you, Chris, from your company, would I just… Is there an application process and then I just wire the money and then get an account and get set up that way?

Chris: Anyone who wants to inquire could either go to our website and click on contact and request or to call us. And we actually send out two emails. Our customer service people will send an account opening form with some simple instructions and setting up. And the other one is frequently asked questions, which is generally, we believe, very helpful to anyone who is new — all the typical things someone who is new to the process usually asks. So this way, if a customer calls us and doesn’t think of something, we try to be proactive.

And then accounts are funded by bank wire 90% of the time because they’re fast and expedient. They can also fund it by a check, up to certain amounts. So both. And once that’s set up, the client is ready to trade.

I also want to point out, when you talked about record keeping and such, we have a client login on our website. So clients that have metal in storage — so it’s not for clients that have metal shipped to them — but once that metal is in storage, a client logs in. It’s going to show what their whole portfolio is. So if they have multiple precious metals products, it’s going to show the current market value of each project, plus to total portfolio. And it’s also going to show the transaction history — it’s very storage centric — the history of the dates it went into the depositary, the dates any metal came out, with the circumstances are coming out — was it for sale? Was it for delivery? So to aid the investor, as you talked about — looking at all your portfolio, tracking them, tracking history — at least for the precious metals side, we have those tools that people are used to with any account they would have with a traditional broker-dealer, that sort of transparency and access.

Jay: What sort of — I’m saying this broadly, not specific to your company but broadly — when you’re talking about physical gold and storing it in, say, a vault or a facility, what sort of insurance or assurance do you have that… What happens if the company goes bankrupt? What happens to your gold or this sort of thing? I think it’s a question that lingers in the back of a novice gold investor’s mind before they jump in. What happens in the worst-case scenario?

Chris: Sure. Those are really great points to raise. First thing, we are not the depository, and obviously, this metal is not on our balance sheet, as they say. The depository is a… The one we use is IDS, International Depository Services. That’s our primary depository. It’s a major non-bank bullion depository. And if a person asks for the frequently asked questions, when we email, we have the link to their site. They are fully insured. We, obviously, always receive their letters of evidence of insurability. They are an official depository for exchanges like COMEX, LBMA, and it just means it has to do with when you’re storing metal related to the LBMA or the COMEX or something, that they meet all these standards. And they are audited continuously because of that.

So they’re, like I said, a major depository. They actually have three facilities. They’re also the depository custodian for…almost all the IRA companies use them, and that’s a heavily regulated industry. So that’s why we work with someone like that. We don’t work with a mom-and-pop, and that’s not denigrating them, but it’s just that we’re more comfortable with the firms that have to meet certain regulatory standards, even though they’re still outside the banking system. But holding all this IRA money and metal and such and carrying the insurance in the hundreds of millions of dollars, and that’s where we’re more comfortable. And we believe our clients would feel that way also, and they do.

Jay: Right. Absolutely. So what would be your broad strokes recommendation for an investor? I’m sure you get tons that come to you seeking portfolio allocation advice. I mean, everyone knows that diversification is important in one’s portfolio. If I were to ask you, “Hey, Chris, I’m looking at my portfolio overall, and I have X amount in stocks and X amount in bonds and real estate and this sort of thing, what would be a good starting point to start building a precious metals allocation in one’s personal portfolio?”

Chris: Sure. When you actually touched on this a couple of minutes ago, when you talked about what percentage of your money is in precious metals… That’s a little bit up for debate. I know there’s the textbook five to ten percent. And this is my personal opinion, so a person can digest it and pick what they thank.

When a person is talking about… A great example is 2008. Precious metals rose going into 2008 because the precious metals — we’re just say “gold” representing precious metals — is a very good forecaster of what’s coming up. A lot of people don’t realize that.

Gold moves ahead of the event. So gold rise before 2008 when everyone thought we were in a new economy. Remember, we were in a housing economy, and of course, I’m saying that sarcastically, that ninja loans, it doesn’t matter. Just give a mortgage to everyone. And all this stuff created by Wall Street — CMOs and CDOs — that completely blew up. And the precious metals world new that, and that’s why gold basically rose for years prior and, of course, through that event.

Now when that event happened and the stock market was cut in — what? — half or 40%, the precious metals continued to rise, and they outperformed. So my point is, if a person had a 1%, 2%, 3% position in precious metals a 97% position in a market that gets hammered, it’s nice. How much is it really going to help you?

My point is, I’ve had people say, “Well, you know, I have $500,000 portfolio, and I’ve got 200 ounces of silver at $3200.” It’s nice. It’s not going to do anything for you at the end of the day. When I say “not do anything for you,” I mean, if you’re looking for it to be kind of a counter balance, it’s not enough there to do anything. So my point is, the position needs to at least be relevant enough so that the reason you’re buying precious metals as that store of wealth through market disruptions, which most people feel is long overdue — our next 2008 repeat — and many feel that when the next version of that will be far worse, you need to at least have a position that is going to be helpful. And that would be — without putting myself on the line and being accused of… I still have to play it proper.

We make a market, and we’re here to serve the investors, but it’s just food for thought that it needs to be also least relevant enough to do its job.

Jay: We won’t hold you to anything that you’ve just said, Chris. We appreciate the insights. Now, I totally agree with you on the… There is a point of over-diversifying, and that’s also a dangerous road to go down because, as investors, you kind of get the shiny object syndrome or whatever it’s called, where you think everything is all these little opportunities. Maybe one could pay off. But you get to a point where if your bets aren’t sizable enough, then there’s really no point. You could make a 1% investment into something that three to five Xs, and that’s still… It’s great, but does it really move the needle? And so I would argue more towards the side of doing some deep, deep research into several areas and doing some concentrated bets and just raising your conviction level with each of the different areas.

Chris: If I could, I just have to elaborate because you articulated it beautifully, Jay. And the truth is, the joke is you can diversify your portfolio where everything is offsetting each other to the point where you’re just going to sit in the middle. You might as well be in a money market account. I’m being a little sarcastic. But if everything is designed, ultimately, “Well, if this goes up, this goes down and vice versa,” then all you’re going to do is pay fees to whoever is managing the money, and you’re not getting anywhere. And I don’t look at it as placing bets, and I also don’t believe, personally… It’s very difficult for an investor to nimbly trade markets. I don’t think it’s possible. It may work for a short period of time, but it will eventually blow up.

What I believe is an investor needs to identify the big trends and then get properly invested and let that trend push you. Even more so on the stock market. Taking individual stocks, unless you have a lot of money and can truly buy at least a fair number of different stocks, most investors are served better by mutual fund, by nature. But those mutual funds, they just move up and down with the market. If the broad market goes up, they do well, and if…down.

So my point is, find what trend looks like it’s developing or in play and has some legs to it, which we believe precious metals do, and then take that position in there. And then you’ve got to ride it; spend a little bit of time. You can’t get spooked out of the market in two months. And that’s the other challenge I think some investors have.

Jay: Yeah. Absolutely. It’s classic… On the stock side, it’s classic Warren Buffet versus some of the more active managers. And when you expand that time horizon out and you look at performance, then it’s quite telling that active managers actually don’t end up outperforming.

I wanted to dip our toes really quickly into quite a buzzy, hot topic these days. Being someone, as yourself, someone that’s deeply rooted from the precious metals and commodities space, I wanted to ask, just quickly, your thoughts — without going too much into this rabbit hole — on cryptocurrencies and bitcoin. There’s been references or people have compared it to digital gold and sharing some of the same characteristics that gold has. As someone from your background, what are your overall views on crypto and bitcoin?

Chris: Since we need to keep it relatively brief and the subject is absolutely enormous, I can only touch on a couple of things. So maybe these will be helpful, and maybe we can visit this in greater detail in another conversation.

One thing is, because bitcoin or digital currency is technology — and a lot of people don’t understand technology, and some people, I think, think they understand it, and I don’t think they really do — is there’s a lot of mystique or mystery. And I think people forget two things. Blockchain is a platform. Bitcoin or cryptocurrencies use that platform. They’re not the same. They conflate the two. They use interchangeably “blockchain,” “bitcoin,” “crypto”…

The analogy is the internet is a platform. Companies use the internet to transact or put their business model on, using the internet. So they’re two separate things. All because the internet is viable doesn’t mean using it for your business makes your business viable. And people forget that.

Because if you say blockchain is a very robust early-stage technology, it’s obviously in the developmental stage, and it’s going to be used and manifest itself in a lot of different ways through contracts and there’s going a be proprietary versions for industries and companies to do their own business, cryptos are just using blockchain. And I think people forget that.

After that, these are still software. Even using just the ubiquitous term “technology” is a little too broad. It is software. And you have to be cognizant that it’s going to have the same challenges software has. Bitcoin has already proved that. Bitcoin didn’t scale three, four months ago, and developers had to come in. They talked about that hard fork.

Well, if you’re honest with yourself, you step back and say, “Who are these developers?” Who’s the guy who’s going to come in with the white hat and constantly make the necessary upgrades to this software? I know people get upset when you say that, but it’s a fact. And my point is not to say yay or nay, it’s just to say, understand what you’re dealing with. And it still has to be constantly developed. That means human intervention is always coming in. Who are these people? Who is this so-called group that comes in and fixes it?

I know you’ll hear, and I hope people don’t get their nose out of joint, but you hear people talk about, just like these user groups. They do it, and it’s all kind of like missionary work. But I don’t buy that. Even if that’s true in the early stages, what will happen in the end? And if it’s just an open-ended group, who could stop any nefarious person from getting involved.

So my point is I think digital currency is going to around. It doesn’t necessarily mean it will be bitcoin, and it doesn’t necessarily mean bitcoin is going away, but it doesn’t necessarily mean bitcoin is going to continue to rise.

And cryptocurrency, in some respects, can’t identify itself. It says it’s money, but there’s so much volatility, you can’t, as a vender, if you’re in business, you really can’t accept it. The ones that accept it are immediately converting it to dollars because… You take us. If we were paid in bitcoin and we gave you all this gold, and the next thing you know, bitcoin drops $2,000, we’re going to be out of business because our margins are razor thin.

So my point is, yeah, when the vendors say they accept it, they turn around and immediately have to convert it to dollars. That’s kind of fake, because that isn’t really a currency if you have to convert.

Then, is it an asset? My point is it’s not going away. It’s not blockchain. Because blockchain is developing, the issues with crypto is totally different. One just uses the other. Keep that in mind. It is highly speculative but to the point that, I guess, really hits home, is bitcoin or crypto the new gold? That is flat out just wrong. Because, if you really think about it, if you really think about it, the only commonality they have is that they’re both considered outside of the mainstream — outside of the “system.”

And don’t get me wrong. The idea, in theory, of a currency that could truly operate freely outside of the control of central banks and the Fed, I think is the greatest thing in the world. I would love that. I would love to not have to deal with banks and them thinking they’re doing you a favor to have an account with them and charge you astronomical fees, like wire fees. What’s a wire? You’re sending data, and they’re charging. What do they charge individuals? $30? $40 on an international… That’s a lot of money. I would love an alternative, and people should not get upset to understand I’m in the camp of “show me a viable alternative to the banks.” It would be the most liberating thing in the world. It would free the economies of the world. But I still would be cautious about putting too much money in cryptos.

But, as I said, they’re polar opposites though. Digital currency completely exists in the cyberspace. Physical precious metals you can drop and break your toe. They’re different. One is relying on technology and everything around that — upgrades to software… Technology changes so rapidly. The platforms changes. People have to understand that systems work differently when there’s even changes in the CPUs of the future. There’s so much that affects something that relies on technology.

And precious metals… Gold mined 5,000 years ago is the same gold. No one had to do anything for 5,000 years. An ounce of gold, an ounce of silver is exactly that, which is the polar opposite of what digital currency is.

Jay: Absolutely. Two thoughts after what you just said. And thanks for sharing those views, Chris. I think it’s important to hear all sides. People get caught up a lot with hype and this sort of thing. And your first point of just educating yourself is the most important thing. A lot of people are jumping into this asset class. I know a lot of people personally that have made a lot of money in crypto, and they know nothing about it. And so it’s kind of like, who’s right? It’s not about right or wrong at the end of the day. It’s about knowing what you’re getting yourself into and doing your research and being comfortable with the asset class. I think that you’re right. The large majority of people that are involved in it don’t actually know the technology of it or the underlying technology and this sort of thing.

Secondly, it’s just funny and interesting to me that people would rather jump into this sort of asset class versus gold that, like you said, has been around for 5,000 years. It’s proven its worth. But that’s just the way people are. The average retail investor, Mr. Market, thinks differently.

It’s going to interesting to see how this whole thing plays out. I do agree with you that it’s going to be around for a while, and it’s not going to go away. But I think that at some point it will be interesting to see how it plays into a broader asset allocation strategy, as far as diversifying and picking asset classes. So let’s see how that pans out.

Chris, there’s a last couple of questions I wanted to ask you as we look to wrap up the discussion. It’s been great catching up and hearing your views.

First of all, I wanted to just ask… We established before that it’s not too late to get into precious metals. We’re sitting on sort of the early days of what, I believe you said, was the third leg, which is the strongest leg of that secular bull market, which is exciting. So what is your short-term-ish outlook in the next 12 to 24 months of precious metals and gold?

And then after that, I want to talk about the PMC Ounce, which is one of your special products that I think that listeners would benefit from.

Chris: Sure. Our observation is we believe this third leg started two years ago, and this is going to be a multi-year leg. When I say multi-year, I’m probably talking more in the range of seven years. We’ve got a number of years in front of it.

Gold and precious metals will always be hit. And there’s a degree of manipulation of the short-to-intermediate term. And that’s what can really be very successful at dispiriting investors. Unlike a few years ago, even us here, we knew it was in leg two and the trend was down until it kind of hit that 50% retracement. Well, now we feel — and we did — that once that 50% retracement was achieved, we would go into the third leg. And it has. And we’re in year three.

So my outlook is, despite a day like today where the metals are down, is it will be grinding higher. And over, probably the next 12 to 18 months, it will hit an acceleration. I’m not saying to wait 12 to 18 months to take your position. I’m saying it will start accelerating at a greater trajectory than now.

I want to share one other thing, Jay, that hopefully will help investors experience something that I see.

There are different products in the precious metals market, meaning…let’s take gold. Gold comes in coins — Eagles and Maple Leafs — and then small bars. And the bars go from one ounce to 10 ounce to kilo. The kilo is the 32.15 ounces, about $45,000 in today’s market.

The kilos are basically bought by bigger investors. So big investors… If you’re investing $10 million, you don’t buy gold Eagles. You don’t. You buy kilo bars. You’re still having hundreds of them, but, because you don’t need something that’s as divisible as $1300. And of course, the sovereign wealth funds and those big Asian… You hear about the money flowing to the East, they all want kilo bars. Not the individuals on the street. The power players.

From what we’ve seen over the last few months — and I’m saying this about five months now — the kilos are hard to get. There are none in the secondary market. Secondary market means something that the refinery sold in the past that investors sold back into the market, guys like us buy and then can resell. There is nothing. And the kilos coming out of the refineries, they’re coming out really slow, which tells you that demand by the bigger money crowd is strong. They don’t care if gold is down today. They’re not selling, and they’re accumulating.

And conversely, the classic retail products — gold Eagle, Maple Leafs — there are tons of them. A lot in the secondary market, which tells you retail investors are either selling or not buying.

So I look at it, and my perspective is — and I hate to use these terms because…it’s not to be not kind, but you would call it the bigger players, the smarter money whose connections have a little bit more insight to understanding where things are going, aren’t selling anything, and are just accumulating. And the folks that will get spooked out of a market… Because even though gold has been going up for two years, the market gets hit at a time that just kind of dispirits them, and they throw in the towel. Or they get anxious, and they get sometimes greedy, and they say, “I’m going to go switch to crypto.” They’re changing gears too quickly. They don’t make their decision and stick to it.

So I think, if it could be a helpful message to anybody, from our perspective, from the flow of the metals, based on metal type, this is a good time to either establish your first position or build on what you have. That’s one insight I hope would be of use or helpful or at least interesting for your listeners to digest.

Jay: That’s very interesting, Chris. Is there a spread? As in, let’s say I had $100,000. Would I be better off buying two of those large bars than a bunch of Maple Leafs or whatever? You know what I mean?

Chris: Sure. If you’re going to just do gold, Jay, it still isn’t, and I’ll tell you why. You want the divisibility. You’re going to pay a little bit more for the coin, but it has its value. I would say if it’s going to be in storage, you go with one-ounce bars because you’re going to get a lower premium than a coin. It’s in storage, and you want that divisibility. The reason divisibility is important… Say you at look at what a lot of very smart analysts are saying. In the next few years, gold is going to be up to 2000, 3000, and it’s going to achieve… A lot of people see gold far above $5,000. As an investor, there are times when, if you don’t want to be greedy, you want to start taking some profits off the table. You may not want to get out of the investment completely because you don’t want to miss more of the upside. But you say, I’m not greedy. I’m not a hog. I’m going to start taking.

Now, if you have $100,000 and put yourself into only two units, you basically have to sell big. So you lose a lot of that divisibility where, as things are going up, you may want to just sell five ounces at a clip, 10 ounces — especially if gold is at $5,000 an ounce. Five ounces is $25,000. So I would say the kilos really make more sense when a person has got hundreds of thousands of dollars that they’re putting into gold. A hundred thousand dollars is a nice investment, but still you want the divisibility of the smaller units.

Jay: Right. And with the strategy to accumulate… Let’s say you’re just starting to build a person. Is it the classic like your parents tell you every month, just buy a little bit of gold and just do that for a while? Or is it wait for a pullback and then try to build a larger position and go that way?

Chris: “A little bit” — we’re talking about two things. One is market timing — waiting for the pullback. I’ve rarely seen that work because the psychology with a pullback is if a pullback happens, then the person is convinced it will go lower. It doesn’t it, and it goes higher. I would say this is what the reality is. If you do your homework and you concur that the precious metals are in the early stages of leg three, and if I was to say to you, “Jay, where do you think gold is going to be three years from now, five years from now?”

And you say, “Chris, I listen to a lot of guys who are pretty smart, and they’re saying 5000-plus,” my answer to you would be, what are you going to do? Hem and haw? Maybe gold goes down a dollar an ounce. It’s more likely to be up five. Just establish your position, because the other problem is when the next crisis like 2008 happens, the supply will just totally dry up. And it did in 2008. It was very tough for a couple of days to get anything. So you run the risk of just being shut out because it’s not paper. It can’t be created out of thin air. There is not an infinite supply of precious metals. So my position is just take the position and don’t even waste your time trying to market time.

But I’m going to use that as a queue to just talk about something that we offer because, Jay, the beauty of it is it’s a patented physical precious metals asset called the PMC Ounce which means Precious Metals Composite. And each PMC Ounce has a fixed fraction amount of gold, silver, platinum, palladium. And, depending on how many PMC Ounces an individual buys, those fractional amounts aggregate up to a total, and actual physical bullion is delivered — good delivery physical bullion — into a storage account into the depository, into the client’s name.

Each PMC Ounce is a fixed amount of gold, silver, platinum, palladium that are logically weighted. So each PMC Ounce, in and of itself, is a turnkey, diversified, physical precious metals portfolio. And the logic of it is — and this logic has proved out because you can look at our homepage because we have the history of the PMC Ounce’s price versus gold and silver since the PMC Ounce was created in 2008 — is that it gives a better risk-adjusted return. It mitigates the volatility that is common if you’re in just one or two of the metals. So it’s capturing the blended return of all four metal, and it’s smoothing out that volatility.

One of the greatest examples is silver. Silver spiked way up to almost $50 an ounce in 2011 and ’12 and now is way down at ’16. A lot of people aren’t aware that in the last three years, the best performing in the precious metals are palladium. But virtually no individual investors have no position in palladium because a typical precious metals dealer is pitching gold and silver.

So this is a product that, like I said, it has a patent. It is all physical precious metals. It’s not an ETF. It’s not a fund. It is unique enough that that’s why it has a patent. It’s bridged the best of two world — ease of trade like an ETF with actual physical bullion ownership. It’s logically diversified. So when you say how much should I put into precious metals and then people also start questioning which one, we basically say the PMC Ounce has done it for you. There are times when gold and silver are down and platinum and palladium are up. So we think it’s logical, and as investors get exposed to it, most of them gravitate toward it because the logic is just indisputable. And we have a lot of tools on our website, which is NeptuneGlobal.com. We have a PMC calculator that lets you do a mock trade so you see exactly what you’re buying, how your money is diversified across the metals based on dollars and percentages, an interactive chart that’s updated daily based on the closing prices that shows the performance.

We think — and it is proven — that it is a robust, logical, physical precious metals asset, which is actually resonating with a lot of the new people to precious metals. They’re used to wanting diversification, having something that’s a little more creative than just kind of the old bars and coins which have kind of an antiquated, barbaric feel to it. It’s gotten wide acclaim by some very respected analysts.

Jay: That’s pretty interesting and exciting. Can you divulge the weightings of the PMC Ounce and how you came up with those? And are those fixed? Or do they change over time?

Chris: Sure. The physical weightings never change. They can’t. PMC Ounce is like a pizza with slices. One slice is gold, one is silver, one is platinum and palladium. And each slice is a certain size. The reason you have to visit the site is because there’s two ways of looking at it. There’s the physical amount, and then there’s how much, because each metal has a different valuation. Gold is $1300 and silver is $16. So when you really look at how much money and how you allocate or weight, you have to look at how much money is going into each metal — not units. Meaning, if you had $100,000 and you wanted to put half in gold and half in silver, what would you do? You’d buy $50,000 in gold and 50 in silver. You wouldn’t buy one ounce of gold for one ounce of silver because they have a ratio of 80 to 1, virtually.

So the PMC Ounce has a physical weighting, which is fixed. So a PMC Ounce sold five years ago is going to be the same as one today and five years from now. The thing that’s just changing is its valuation as the value of each component metal changes. And this product is tied 100% to the market. Every tick change it is reflecting. It is a true live-market product that is bought and sold in real time.

So the physical weighting is…gold is 3.5%; silver is 93.75%; palladium is 1.75%, and platinum is 1%. At first blush, you’d say, that’s all skewed toward silver. But it’s not because based on that weighting, the PMC Ounce today, that 3.5% of gold represents 51.5% of your money is going into gold because gold is 3.5% of an item that’s $1300 and change. So you can see the logic. It is predominantly still gold. Gold is the primary.

Now all that silver — like I said, 93.75 — do you know has much that represents of your money? 17%, because silver is so low-priced, so undervalued. So my point is, this is why we have all the tools on the site. And the PMC calculator, which is accessed through the homepage, lets you do a fake trade, but it’s all in real-time pricing. It shows you how much of each metal, physically weighted, you’re owning and how much of your money, percentage, went into each metal, and you see the whole logic of diversification.

So, I love to explain it, but the tools and the feedback has been very positive. People who are doing their due diligence and their investigation utilize the PMC calculator, and then they can totally conceptualize it. So I would just encourage anyone who is interested to visit us and check it out.

Jay: Absolutely. We’ll get that link in the show notes — the PMC calculator and, of course, your website. And that leads us to the last question, Chris, which is what’s the best place to find you or follow you or connect with you, if you’re interested in perhaps purchasing some of this PMC Ounce?

Chris: Sure. I’d encourage anyone to go to NeptuneGlobal.com. There you’ll find our phone number. Don’t be bashful. Call in. We’re happy to chat. Also, you could hit the contact tab and just request information. If you hit the contact tab and request, we will send you the frequently asked questions, and those will give you a direct link to the PMC calculator, the page that gives you an overview of the PMC Ounce, even things like what are the minimum count sizes, the link to the depository — a lot of things that we think are a great helpful starting point. So pretty much the centralized place for getting to know more about us is NeptuneGlobal.com.

Jay: Fantastic. Chris, thanks so much for your time. It was really interesting. It was very helpful for me personally, and I learned a lot, as always. I think our audience is really going to enjoy it. So I appreciate your time and the insights.

Chris: Thanks a lot, Jay. It was great, and hopefully we’ll talk again soon.

Jay: Absolutely. Looking forward to it. Take care.

Chris: Okay.