Let Numbers Not Biases Dictate Your Investments | Avi Gilburt

I have directed secretary Conley to suspend temporarily the convertibility of the dollar into gold or other Reserve assets where is the goal [Music] this is the golden digital podcast Fergus Hodgson your host thank you for tuning in everybody it's my pleasure to do these and I'm so glad you're with us if you want more precious metals you know Freedom mining please do go to goldmusic.com forward slash podcast And subscribe also you can subscribe to our newsletters at goldmusic.com we have a guest who's on the show years ago now but I'm so glad we have him back Avi Gilbert he is the founder of way Elliott wave trader.net this is a live trading room in the Forum focusing on Elliott wave market analysis so he is he's a chartist or a technical analyst and his his goal is to remove personal bias or predisposition which is fascinating to me so Avi we're going to drill down into what this Elliott wave trading process is and defend technical analysis because I'm glad to have that perspective welcome to the show and tell us how did you become a believer in the elite wave method thank you very much for having me for those that don't know my background I am formerly an accountant I have an accounting major an economics major so I I know accounting and economics extraordinarily well I then got a uh law degree and then a masters of law I went to NYU for a masters of Law and Taxation and I was a partner National director at a very large accounting firm so look I understood business I understood accounting I understood law and I understood how to take apart a balance sheet and how businesses work and then when I try to apply that to the investing world I was pretty average and I really understood how how uh how businesses are valued probably more so than anybody else out there most people out there with my background and I was at best average at investing so I started looking for other reasons why what am I missing here and I stumbled upon some work uh regarding Market sentiment and how Market sentiment affect you know the large markets and large companies and I started you know delving into that and I it led me to Elliott wave analysis which is that is exactly what it does it tracks market sentiment and whereas fundamentals are often lagging at the market turns usually Elliott wave analysis which tracks market sentiment gives you strong forewarning of a term that's about to occur so it gives you a a leg up on the market shall we say yeah Junior Clark for what this sentiment is because maybe you touched them just briefly but is this basically the gap between fundamentals and the actual Mark prevailing market price I'll give you an example I've heard so many times you know let's say the market is rallying strongly and the fundamentals aren't good or it comes out the market starts rallying after a negative fundamental report comes out people often scratch their head and wonder why well it's what it's sentiment that's driving the market or the specific sock not the fundamentals and we see it so often yet people just shrug it off and then they just move on to the next uh what's the next news that's going to come out that's going to move the market but they shrug off every time where it doesn't make sense to them I was refusing to allow me myself to shrug it off I I look for intellectual honesty in everything I do so why should I shrug something off that just wasn't jiving with the way I'm supposed to look at the market and that's again it's what led me to understanding Market sentiment what it really means and in the most simplistic terms this is the most simplistic terms when a market gets too bullish I don't care if if the sentimentals are amazing and all I'm sorry the fundamentals are amazing you often see fundamentals the best at Market Highs but when the market gets too bullish there's nobody left to be pushing the market higher everybody that wants to be in his Inn so there's only one direction the Market's going to go it's going to turn down same thing at you know extreme bearishness when the market hits an extreme bearish Point there's no everybody that's wanted to sell has sold and there's only one point left for the markets to go and you know in fact we saw that not long ago October 13th when the that really negative CPI report came what came out and everybody expected the market to tank from it well we were looking at that as a final flush down and about to start a major rally and that's exactly what happen we're about 10 percent higher than than the point the market hit that low and it was purely because we hit a negative sentiment extreme and the market was telling us it's about to turn back on okay I'm not sure I understood all that to be frank there's there's do you want to try to be more succinct with listeners who got lost there in terms of just what you mean by sentiment effectively it means math mood the mood of the public as a whole will affect the way the market looks at news or fundamentals for example if you're in a very very negative sentiment Trend if the sentiment if the trend itself is in a negative sentiment Trend meaning the market is moving down and it still has further to go based upon our uh analysis and calculations if you have a positive report that comes out to the market Market's likely going to interpret that based upon where it is and its negative sentiment Trend so if there's further to go in that negative sentiment Trend you can bring a positive news report or positive fundamental in the market and what makes it won't make a difference the market will just interpret that negatively and still keep moving down the same thing on the positive side if the market is in a positive sentiment Trend and a negative news item or fundamental gets reported Market's going to ignore it and just keep on going in its positive trend so I'm hoping that explains it a little better and we've all seen times like that when that happens you're trying to drill down to this human psyche which does have a herd mentality to it and often it defies comprehension right it doesn't make a lot of sense and so you're trying to drill down to this and at the same time remove your own biases okay I'll give you another example if you remember back in I think it was around 2012 2013 where the FED started putting out more and more QE quantitative easing and of course what was the expectation of the entire Market at the time a quantitative easing is coming out gold is going to the Moon well I'll tell you at the time we were insane gold is going to the Moon because we recognized that gold was in a negative sentiment Trend and we expected it to drop down towards the 1000 region which is exactly what happened no matter how much quantitative easing was thrown at the Mark people were shocked that gold kept going down because gold was in a negative sentiment Trend and no matter what you're going to throw at it from a fundamental perspective it didn't matter that was that was probably a perfect example for it yeah it does seem that the med that the precious metals since as opposed to the base or Industrial Metals they must be incredibly responsive to sentiment so that's where that's where your work is most relevant or and in other let's say the beauty pageant stocks which are the stocks that are most let's say broad-based in terms of their appeal their more populist appeal do you know clarify which investment vehicles are most sensitive to sentiment is it excellent excellent question it's all based upon a Continuum the greater the math involvement in a particular product the greater math sentiment will direct how that product moves so you look at it as a on a Continuum for example the S P 500 that is predominantly driven by sentiment the massive Mega cap those are predominantly driven by sentiment but then if you go down to the other side of the Continuum you'll have something like a micro cab biotech stock sentiment is going to be meaningless for that stock that stock is going to be driven by the one product that that micro cap has in its in its production line so there there's a Continuum there the further you go along to the math is being you know what's involved in that product like I said Mega caps and and and the S P 500 the more likely sentiment is going to be the primary driver of that problem let's say we agree that there is this Mass sentimental herd mentality and as you as you say I tend to agree with you it's it's much more prevalent in vehicles or stocks that are broadly held that are subject to this kind of yeah this this Mass psychology fine is is it correct to say that technical analysis or studies of study of mass psychology is poo pooed and the financial academic world of course it is anything that is really not understood to its core is poo pooed and you know if you are an academician you know that is the be-all end-all of your world when it comes to investing if you're somebody who's going to maintain more of a more of an open mind and broader perspective of how markets work and if and in truth over the last 30 years more and more Studies have been have been presenting how much more important the whole sentiment side of the market is this ecology side of the market is unfortunately the academic world has not caught up with that and you know just I as I mentioned you before I've written articles that the academic world should not be throwing stones there have been many times where it itself has gone back and said we have completely failed literally we have completely failed and one of the examples was back in 2000 the market top in 2000 you know ultimately you know I'll give you some quotes for example Paul Samuelson the co-founder of modern economics he noted and I'll quote you we are at a loss for words if nothing else this baffling economy has defeated the vocabulary of economics and I mean I can give you more and more about what I'll probably end with to explain to you this whole perspective Eugene Faba father of the efficient market hypothesis hold the New Yorker in January of 2010. ah and I'm going to quote you I'd love to know about what causes more about what causes business Cycles I used to do macroeconomics but I gave up long ago economics is not very good at explaining swings in economic activity we don't know what causes recession we've never known that's a quote from the the father of the efficient market hypothesis so you know academicians really you know and now and as I as I've done more and more research into this I I realized why don't academicians move from the efficient market hypothesis it's still taught as the primary basis for economic theory in in colleges today why haven't they moved well from my research it seems they're all pretty much in agreement they don't have anything better the gold newsletter is proudly sponsored by inventa Capital Corporation a venture capital advisory firm dedicated to the acquisition and development of Assets in the natural resource sector today inventa is one of the Premier mining groups with a first-rate portfolio of companies and a world-class team this is the inventor Capital update and we have with us Sheree leaden she's the chief executive of gold bull resources that is goldball.ca on the T6 fee the ticker is gbrc and over-the-counter for Americans it's gbrcf they have a market cap of around 5 million us 6 million Canadian and there is some new up there's some news from global resources they have a pea preliminary economic assessment which came out at the end of October so very recently and this is exploring the prospect of converting this into an above above the water table mine but I don't want to put words into shares Mel so Cherie do you want to give us the highlights of this latest report yes sure so this is the first time that we've looked at the economics of our existing resource Etc and we've always previously been talking about the exploration upside and potential essentially the more we drill the more ounces we can Define at the project but given the exploration sector has really slowed down um we decided to look at the economics of our existing resource to see you know that doesn't make sense to start up a small scale operation based on the current resource and we looked at 250 000 ounces of our half a million ounce resource and they're the answers that are located above the water table so completely dry and what that means in Nevada is uh it can allow for a much quicker permitting process if you stay entirely above the water table so that was the reasoning for only looking at half the answers and that we've got at the moment can you do the permitting simultaneously where you get let's say the above the water table approved and you can get started on that while the other permitting is going through the process yeah absolutely so I mean even above the water table permanent takes about one year for Baseline studies and then say six and nine months for the actual permit so it's still you know almost a two-year process staying above the water table and when you go below it um it just requires more Baseline studies and more hydrogeological investigations and that you know adds another year or so onto it so there's no reason why that can't be done whilst you're in production above the water table and there's a heck of a lot of meat in this report so I was looking over it it's about 120 pages and this is where I'm obviously I'm hoping you'll make it easier for us to understand now one data point that stuck out to me was this one year payback rate which obviously is uh or payback period is enticing trying to clarify what that what that means yeah sure so basically we looked at a small scale gold mining operation very conventional um stock standard heat bleach processing of 35 000 ounces per annum so our mind would produce 35 000 ounces per annum each year and to build that line it's going to cost about 28 million dollars and um and the number that you put out we're going to pay that back in just over a year so it's a very rapid payback period And It produced an irr of 99 so almost 100 um investor rate a return and on top of that an npv of us 77 million dollars and you mentioned our market cap for being less than 7 million so there's a massive discount app between the value of this project and our current market cap at the moment it's insane and so then if so then this seems like it does seem like a no-brainer to do this so is are we just all steam ahead yeah so I'd say with steam ahead we're not full of steam ahead but we're steam ahead we just had a board meeting and we decided to commence the long lead items so there's certain aspects to permitting that just take time they're not expensive but they take time so for example water monitoring you've got a water monitor the water over four quarters even if we're above the water table we've got to like kind of like prove the negative so we're going to start that um in quarter one to essentially say we've got four quarters of data that show that there's no water in these holes um so then we've got tick that box so that's actually probably the longest layer there's some things like your flower surveys you've got to survey them when they're blooming and things like that so we're very cognizant of what needs to be done and we take permitting seriously but we know the things are going to take time so we're going to start them now um so that we can come to a decision point and then we're ready to go rather than have to do all those long long lead permitting aspects you know a year from now we're going to start now so we're ready to run um and although you're an Explorer you're you're proceeding like you said a little bit of your initial plan by just given the circumstances that's what you see is the best option do you want to clarify the financing plans to get to this 28 million so at the moment a feasibility study of which we're going to start we're going to commence aspects um essentially immediately such as these long lead items um the Pea also identified that we needed some more metallurgical work so that's another aspect that will be done in the feasibility study and financing um these days post feasibility study It's Not Unusual to have up to 70 debt and the remainder Circle 30 Equity um there's also you know other mechanisms whether it's a royalty or whether it's a percentage of the project but um you know we're looking at all options and we're at the moment the next step is essentially we've got enough enough cash in the bank to um commence these long lead items immediately and we've got about two million dollars cash in the bank and we've got another U.S 750 000 sitting

in a bond account so we're not cameras and we are we do have adequate cash to keep advancing these assets so just a serious bargain territory about the current prices we've got supportive major shareholders who um are fully supportive of us investigating um this near-term cash flow scenario of the advancing the project and although the market hasn't really reacted as we had hoped we're getting the attention of a number of gold producers and and bigger companies that essentially looking at our project now and requesting Cas and site visits to see you know what is this project that could be producing um such cash flow and have such an incredible irr yeah and as you said the the financing is a lot more forthcoming for production than for exploration so the financing is unlikely to be a hurdle yeah I mean I don't think so but it's you know that's why we change tax you know before it was all about let's add more answers via in-ground exploration at Salman and the sad fact is we announced some phenomenal gold results earlier this year and our share price went down essentially but announced good results the share price would go down so the more money we're spending on Drilling and exploration um you know the the less our the company was valued at so it didn't make a lot of sense but we've also had to be realistic and say well we can't keep drilling you know with the money we've got in the bank what's the point of continuing to drill and add more answers when the market isn't rewarding that so we we believe that we've got a better chance at a re-rating via essentially looking at the feasibility study and looking at the economics of extracting this girl that is literally seeking out the ground yeah folks if you want to learn more it's goldball.ca that's the website and you can follow them on Twitter at goldball gbrc so that's that's the the Ticker gbrc on the Toronto Venture exchange and gbrcf over the counter and otherwise shree obviously I'm so glad to learn of this update thank you for your time I appreciate it thank you thank you [Music] well yes and Noah because the these days and I've written about this the efficient market hypothesis has evolved in terms of the way it's taught on the campus that there's the weak semi-strong and strong so they try to delineate and make it more of a spectrum and it's more of a theoretical framework than an absolute is that the underlying assumptions still are not workable in the modern in the modern and real world as to how markets markets move sure and so the I wonder though whether the behavioral Finance wing of the field will venture more into what you explore what this this Market sentiment or broader sentiment now let's let's say we assume or we agree with you that there is this heard uh mentality or her behavior how does one go about disentangling this like you said that the academics don't seem to have a handle on it and largely largely uh see there's a black box almost what have you done in your own career and what does this Elliott wave method in terms of disentangling the you know human human herd Behavior well I'll start with explaining Elliott wave a little bit back in the 1930s Ralph Nelson Elliott started studying the markets an accountant also and what he identified was that the market was fractal in nature meaning it was variably self-similar at varying degrees of Trent so what does that mean it means the market had a certain pattern to it as to how it moved up how it moved back and when he took Fibonacci mathematics and used and overlaid that into his discovery of the fractal nature of the market he was able to start identifying Market turning points rather accurately uh as as an example um when World War II was raging around him Elliott was calling for an 80 plus year I'm sorry 70 plus year full market now when you take a step back and you realize we're World War II is Raging around you it is the most negative of sentiment times potentially in history in our recent history and he was calling for a 70-year plus bull Mark so basically after learning Elliott a bit more um over the last 20 30 years we've been seeing more and more studies that have been focusing on the psychological side of the market and what they've been showing is that not only um not only can the market exist and and move outside of exogenous factors and there have been many studies that show that exogenous factors do not move the mark in the same manner people believe but they there's a pattern to the market and there's a way it moves more so there's also there's also a mathematical movement that's inherent in the market for example nature is is guided through Fibonacci mathematics there is much of what we see in the ratios that is that grow throughout nature that is based upon ratios based upon Fibonacci mathematics over the last 20 30 years the studies have started moving towards well do human beings think based upon these same type of ratios and the studies have concluded that not only in MA do we see people making decision making based upon these Fibonacci ratios we even see it on an individual basis so when you take all of these things and you put them together it really gives you a tremendous support for understanding how the markets can move in a similar way okay okay and where your your website is Elliott wavetrader.net and how do people I mean I'm trying to think my concern would be that much of a sentiment happens in real time right so how can people engage with the right information well effectively we provide real-time analysis we do analysis based upon five-minute charts 16 minute charts daily charts weekly month we provide you know we're looking at it on multiple time frames and you know during the day we're doing work based upon five and 60 Minute charts even some eight minute charts so we are actually tracking this in real time on an ongoing basis as I said to you just on October 13th when everybody thought the market was about to take a very strong draw people were saying as much as five percent were going to be down we were looking at in real time and I literally as we were hitting the lows I put out a note to our members and I said this should be the the final last gap down before we turn up strongly we we track this in real time now am I going to say that we are a hundred percent accurate of course but I could say that people have been quite shocked at the accuracy with which we've been able to identify Market terms utilizing this methodology okay and this is the golden user podcast so we we take a particular interest in the medals and gold and silver maybe more than others but a big topic this this year has been the way that the dollar has performed so let's say well despite having high inflation and so gold has basically held its ground in other currencies and actually gained ground against some but versus the dollar it has struggled it's actually down about 13 this last six months and about seven percent this year when can we expect or how would we identify when that might turn that sense of my turn we might get back onto the the past trajectory well interestingly on the dollar I'm looking for a breakdown a sustained break of the 109 region on the Dixie tell me that we're probably going to be in at least 12 to 18 month pullback on the Dixie so we're right at that support for the Dixie right now so I'm looking around that 109 region as the main support with regard to the the metals oftentimes we'll use the we'll use a lot of the uh the the common ETF because more people will utilize the ETFs more so than the actual the GLD ETF right correct but but here but here's the problem I would not suggest anybody invest long term in the GLD as a lawyer I've actually taken apart the uh the perspective and I did a full webinar on the GLD perspectives that they could find in the library of our website uh it's free they can get onto there and and hear that there's no charge for them to see that but it should be in the public side of our website they could see it but so I wouldn't I wouldn't suggest anybody invest long term in the GLD uh if you want to invest long term in Gold you buy gold but uh but I use the GLD for analysis purposes and my my analysis is saying that until we're able to get and we use five wave structures to tell us the market is now moving into a bullish phase so until I'm able to get a five wave structure off these lows uh and I'm expecting a bottoming in this region in both gold and silver as well as GDX we have another lower low is the only question I have but once we see a five-way structure moving through the 16150 to 162 region on the GLD I'm looking for a run that should be taking us you know well into new all-time highs as we look out towards 2023 2024. it's it's just so fascinating to me how that you can say that and I I mean I agree with you but do you want to comment on what what the psyche is or what what the the sentiment is that has kept us from making that breakout I mean maybe it's a cryptic question but I just look and I think we discuss this all the time we think it is inflation there's geopolitical instability there's lower confidence in the Federal Reserve the the U.S federal deficit just seems to be Unlimited and yet

there hasn't been that change of heart yet if you want to comment what does it take to make I mean you say you just look at the charts but you don't go beyond that just look at the human psyche in what what kind of catalyst really is Meaningful the problem is most people look at a market and believe that an exogenous factor is what is ultimately going to move that market and as I said we had one of the most extreme exogenous factors that everybody in their mother and grandmother and grandmother's dog thought was going to send gold to the moon and that was quantitative easing yeah gold continued to move down until it completed its correction and of course everybody was claiming he was manipulation it was not manipulation you know there are tons of people out there that are claiming you know gold and silver are manipulated yeah there are cases out there that say that they're manipulated but people have to understand the difference between what spoofing is and what it takes to move a market you know uh move the silver market down from 45 to 15 and that's not a manipulated move what happens is gold and silver just like any other Market out there goes into corrective phases when we topped out in uh what was it is it August of 2020 we topped out in August of 2020 in gold and we have been involved in this basically sideways consolidation in Gold we call this a fourth wave as I said markets move in five-way structures this is a fourth wave consolidation that we've had and we're looking for a fifth wave to take us to new all-time highs so effectively the sentiment structure has been accurately telling us gold is not going to be ready to move upside until it completes its corrective structure sure okay and how do you make sure your own personal biases do not creep into your analysis I I don't I do not follow the news I do not follow exogenous factors I do not let exogenous factors affect the mathematics through which I view the markets my my view of markets is based purely on a mathematical perspective they do not let anything otherwise come in outside of that mathematical perspective okay folks if you want to learn more from Avi the website is Elliott wavetrader.net and Elliot has two T's at the end and who else it does too yeah and and you you can follow Avi on Twitter it's a v i g i l b u r t and a LinkedIn we'll have all these links including links referred to by RV during the interview at Gold newsletter.com forward slash podcast obviously there's a there's a great deal to be learned here and I'm obviously has given us an intro there but please do follow his work and I will too Abby thanks for sharing your time today and I look forward to next time okay thank you ever so much [Applause] [Music] [Applause] thank you

2022-11-10 17:39

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