The term “Crypto Winter” has gained a lot of attention due to the massive drop in cryptocurrency prices and the collapse of the cryptocurrency exchange FTX.
But Peter Schiff, CEO and chief global strategist at Euro Pacific Capital, doesn’t think that’s the correct term to describe the situation.
“This is not #crypto winter. It means spring is coming. This is also not the crypto ice age as it ended millions of years later,” he wrote in a tweet. It’s the extinction of cryptography.”
That’s a serious warning. But this isn’t the first time Schiff has sounded the alarm.
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When bitcoin hit $50,000 last year and seemed to continue its upward momentum, he said, “It is possible to go to $100,000 for a while, but going to zero forever is inevitable. hm,” he said.
If you share the same view, you’ll want to know where Schiff finds refuge in this ugly market.
Now that Euro Pacific Asset Management has released its latest 13F filing, the quarterly report institutional investors file to disclose their holdings, let’s take a look at some notable themes in Schiff’s portfolio. .
Money
Schiff has long been a fan of yellow metal.
“The problem with the dollar is that it has no intrinsic value,” he once said. “Gold retains its value and you can always buy more food with gold.”
In fact, when Schiff tweeted about the demise of cryptocurrencies, he also said that gold “will rise again to lead the new breed of asset-backed cryptocurrencies.”
As usual, he pays lip service.
As of September 30, Euro Pacific Asset Management held 1,655,000 shares in Barrick Gold (GOLD), 431,952 shares in Agnico Eagle Mines (AEM) and 317,495 shares in Newmont (NEM).
In fact, Barrick was the company’s top holding at 6.8% of the portfolio. Agnico and Newmont were his third and sixth largest holdings respectively.
Gold cannot be printed out of nowhere like fiat currency, and its safe-haven status usually means increased demand during times of uncertainty.
Miners such as Newmont, Barrick and Agnico could benefit from higher gold prices.
Recession-proof income stocks
Dividend stocks offer investors a great way to generate a passive income stream, but some can also be used as a hedge against economic downturns.
Case in point: Euro Pacific’s second largest holding is tobacco giant British American Tobacco (BTI), with 5.3% of the portfolio.
The Kent and Dunhill cigarette makers pay a quarterly dividend of 74 cents per share and an attractive annual yield of 7.6%.
Schiff’s funds also own more than 157,766 shares of Philip Morris International (PM). Philip Morris International (PM) has a dividend yield of 5.4% for him. The Marlboro cigarette producer is his seventh largest holding in Euro Pacific, with a portfolio weight of 3.5%.
Demand for cigarettes is highly inelastic. That is, large changes in prices cause only small changes in demand, and that demand is largely immune to economic shocks.
If you’re comfortable investing in so-called sin stocks, British American and Philip Morris may be worth investigating further.
Agriculture
When it comes to defense, there is one recession-proof sector that should not be overlooked. It’s agriculture.
It’s easy. No matter what happens, people still need to eat.
Schiff isn’t talking about agriculture as much as precious metals, but Euro Pacific owns 124,818 shares in fertilizer producer Nutrien (NTR).
As one of the world’s largest providers of crop inputs and services, Nutrien remains strong even as the economy plunges into deep recession. In the first nine months of 2022, the company generated a record net profit of his $6.6 billion.
Nutrien shares are up about 3% in 2022, contrasting with the S&P 500’s double-digit year-to-date declines.
Given the uncertainty facing the U.S. economy, an investment in agriculture could provide reassurance to risk-averse investors.
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This article is for information only and should not be construed as advice. It is provided without warranty of any kind.
