Wheaton Precious Metals (WPM): How to Bank on Gold & Silver 🤑🙌🏼🤓👇🏼
I think one of the best ways to gain exposure to the rally in precious metals is via stock in Wheaton Precious Metals (WPM)—imagine the Goldman Sachs of precious metals mining.🤔🤑
WPM has a very unique business model, whereby it acts as almost an investment banker and/or Private Equity Firm with an exclusive focus on Precious Metals mines and their cash flows—Wheaton is a precious metals streaming company. But, we get into the weeds of the stock, let’s talk about the reason why Precious Metals are so precious…? 🤔
Less than 48 hours ago, the Federal Reserve, the ONLY entity in charge of and responsible for the supply (and price of money), unknowingly ignited another round of inflation that will surely hit consumers’ already stretched budgets within the next 9-18 months.
Since 1913, when they were put in charge of keeping the value of the US dollar “stable,” the value of the US dollar has diminished an astonishing 98%!!! Just think about that for a second…🤔
Once upon a time a hundred years ago, your great grandma sold her bakery for $100K🤑…Back then, that was a 💩ton of money! Today, that amount of money would by you about $2K (or less) of the same goods & services that $100K would have bought you…This is NOT because of GREED—this is ALL ABOUT INFLATION…
Because humans have been ripped off by TPTB (The Powers That Be) for thousands of years, societies spanning the entire globe 🌍 have turned to precious metals like gold and silver as a store of value—humans learned to hedge against risk.
This is why people pay other people to dig up, cut, stamp, store, and protect precious metals.
Gold was the original money—it remains as such.
Silver is similar but different…It is used industrially much more than gold. Platinum and Palladium are fascinating in terms of the way they’re used in production—mostly in the production of catalytic converters for cars. Copper is becoming more valuable as well, causing some criminals to get creative with their crimes. Copper may be the new precious metal. Btw, 🤔 did you know that Aluminum was once a very “precious” metal?
But Gold is the “gold standard“ for a reason. And lately, I’ve been getting lots of questions and interview requests about it.
Mostly it’s just, “is gold a good investment?” 😐 To which I respond thusly:
“Gold is money—not an investment…” I’ve said a bit more—here are the most recent quotes & links:
@CBSNews:
Okay so if gold isn’t an investment, and I need to invest my money to beat inflation, then what should I own for the long run? For one thing, you should own equity in profitable & growing companies—it’s hard to imagine better investments than stocks. But remember, stocks are not lottery tickets—stocks are ownership…Therefore, the only way to understand a stock’s long term value is to understand what the company’s business model can do in the long term. Business models matter, just ask Kodak, MySpace, & Blockbuster.
Okay, back to the stock pic…What’s to like?
Let’s start with how ridiculously profitable it is…It has gross margins close to 80%—just below Goldman’s 83%. But, whereas Goldman’s Net Income margin is under 23%, WPM brings double to the bottom line with over 50% Net Income margins. 🤓🤑
Most impressive in my not so humble opinion, is the difference Human Resources. Goldman was for decades known as the firm of that hired the smartest guys on the street (this is before Blackstone & Citadel), but today, their Net Income per Employee is barely above $250K; compare that business to Wheaton Precious Metals, which earned an astounding $13.6 MILLION PER EMPLOYEE! Wowaweewa!
In my next article, I’ll discuss how this amazing profit machine will actually and significantly GROW in the next decade and beyond. To be continued…
