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Me & My Money

A hankering for precious metals Add to ...

Ian Gordon, 68

Occupation:

President of Longwave Analytics

Portfolio:

Junior precious-metals stocks

The Investor:

Ian Gordon publishes the Vancouver-based investment advisory Longwave Analytics. He is a follower of Nikolai Kondratieff, the Russian economist who believed capitalist economies moved through 50- to 70-year cycles composed of four stages, the last of which was a prolonged depression, or "winter" phase.

Guided by cycles

"I invest according to my understanding and interpretation of the Kondratieff economic cycle, or Longwave Cycle," Mr. Gordon says. "This knowledge warned me in 1999 that the great stock bull market, which had begun in 1982, was coming to an end."

The year 1999 seemed like 1929 to him. His level of conviction was such that in 2000 he invested 100 per cent of his and his wife's money in the shares of small-cap companies from the precious-metals sector - mainly gold producers.

"I didn't perceive that strategy as high risk because I was confident we were entering the deflationary-depression stage of the economic cycle," Mr. Gordon says. "And I knew that gold mining shares performed exceptionally well after 1929, whereas the general stock market … lost almost 90 per cent of its value between 1929 and 1932."



He is also betting on a downturn in the broader market through inverse exchange-traded funds. "Obviously, they are not doing very well at this stage," he observes.

Largest Holding:

"At present, the biggest position in our accounts is Timmins Gold which I purchased at an average price of about 30 cents. The shares are currently trading above $2, but I am still holding a large position because I can see the potential for the share price to double again."

Best Move:

Taking a long position in junior gold-mining shares during the past 10 years.

Worst Move:

"I stayed in the market during the 2008 crash, even though I forecast it was going to happen in an article I wrote in 2007, entitled 'This Is It.'"

Advice:

"Get out of the general stock market now. According to my Longwave Cycle analysis, this stock bear market is by no means over."



Special to The Globe and Mail



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