 Good day fellow investors! In a recent video I said that I don't really like that much gold miners when I discussed the Newmont gold corp merger because those are overvalued, risky from a management perspective. And then there was an excellent comment asking me what changed my mind. So in this case, hi Sven! In previous videos you were recommending gold miners as a hedge instead of physical gold. What's the change of heart? And then discussions goes how others are interested. Then the discussion goes how I really dig deep into gold miners and that's exactly what I did. So in this video I want to explain a little bit, okay what is my perspective? Because I spent one month, I think it was November every day looking at gold miners. I spent more than 200 hours looking at the top 50, top 60 gold miners and when you spend so much time to look at one sector plus the three four years experience of looking at the mining sector, then you come to some conclusions, some risks and that's why I am a little bit saying that 95% and here I say 95% of investors that want to be exposed to gold as a hedge should not own miners. The 5% willing to do the research to understand the implication of miners, to find the real good miners that might offer or that are in a positive management environment and things like that, only those should think about miners. The rest is really betting on things that could go wrong and one thing that went wrong is the Newmond Gold Corp merger. Gold Corp was a high cost miner that would benefit extremely from gold prices going up. So if somebody bought Gold Corp at 20, thinking that it might go to 100 if gold prices increase and then bought at 12 again to manage his risks, to rebalance that, to keep that high possible upside, he got screwed because the management made a merger with Newmond which is a completely different company for $10 per share. So therefore when I looked at the market, I said okay in the gold mining industry the management is the biggest risk as it was in 2011-2012 when there was a boom. So it is still like that and when I devoted 200 hours to gold miners I see okay there is a big risk from the management which doesn't really endorse the premise that gold miners are a hedge and here I repeat myself not for a market crash but for loose monetary policies because gold miners are mostly overvalued as the gold bugs those who think gold will go to 2000 tomorrow to 5000 which might happen which it might happen. So those stocks are a little bit already overvalued when comparing to current gold prices so that's a risk. Then you have the management that might trick you if six months nothing happens so Barrick has merged with Rand Gold again different strategy, different companies, complete shift in the mentality, Newmond has merged with Gold Corp again, complete shift for both shareholders, Rand Gold, Newmond, everybody. So therefore the management is quickly changing they're trying to invent something to cater to Wall Street to be liked by Wall Street and that's a big risk. So if somebody wants to be hedged and avoid all these management risks physical gold if you are willing to dig into the management risk understand the management then you might hedge yourself hedge yourself which leads me to another story for 95% of investors hedging means that you should be actually happy if you lose money on your hedge because that means that what you were protecting other the 95% of your assets did good and kept their value. So when I say gold miners are a hedge you should hope you lose your money on gold miners understood that's also a message and that's a message very difficult to share with most of the population and that's why I said okay stick to gold just rebalance if you want have a similar look like like an all weather portfolio and that's it. So when you invest in gold miners you have to expect that they can go down 50% easily over a year as it was the case in 2014 before that they went even lower so that's something to really think about and see okay how does that fit my portfolio should I incur in such a risk should I learn about gold miners what are the general risk the venech vector gold miners is overvalued from a current gold mining gold price perspective if gold prices go up that overvaluation plus the management limits really the upside so you have to find a miner that gives you more upside which is difficult I own two miners their stock price has already increased because the results were good so they might be included in ETFs etc etc so that's something tricky to invest and therefore I'm thinking now okay if you want gold exposure you can do it you can rebalance it but don't expect much from it in the long term from gold miners gold gold will vary and you can make money by rebalancing it in your portfolio as a part of a long term oil weather strategy so to conclude yes I devoted 200 hours and it I slightly changed my mind I really thought that investors could buy Barrick could buy Newmont and forget about them rebalance simply add a little bit more of those stocks because those really were stable producers long term assets you know you knew what you were getting there now with the mergers and everything you don't know what you're getting there because the management started to do scammy things to get more options to get a bigger plane etc so I'm in this case really withdrawing the recommendation to have a little bit of gold miners in your portfolio as a hedge if you are not really sure about what you are doing so better to have physical gold than the new Barrick or the new Newmont because the management is doing so many things here that doesn't really add value they should have just stayed there and that was the Newmont the Barrick I knew from before five years ago they did a lot of acquisitions lever themselves to the health which is again how management destroys value and now I see okay they are again doing things just to do things instead of just mining producing that goal goal lowering their costs and being fine with it so it's a very tricky investment it's a very tricky environment and 95 percent or 99 percent of investors should simply forget about gold miners which leaves us to the 1% that should really know what they are doing have more cycle experience should have lost money in the gold mining sector and then you can understand okay you can understand when somebody is scamming you there or not unfortunately a lot of young investors I have one viewer that has invested a lot of his money in McEwen mining which is a extremely highly levered play and this sentiment you can make a beautiful story around gold I can make a beautiful story around gold going to 5000 that I even might believe myself so that's a big risk there it might go it might not go so that's something to keep always in mind that it is a hedge thanks for watching I hope I cleared a little bit of gold mining investing issues here gold exposures to portfolio Ray Dalio has it said Claremont has it so you have to see how does that fit your portfolio but it's it's always just small pieces so thank you for watching and I'll see you in the next video