Sprott's Thoughts

The great debate over stock market valuation continues as equity averages grind higher.

The current 80x gold/silver ratio is elevated compared with an average of 56x over the past 50 years.

The Berkshire meeting has evolved into a high holiday of American capitalism, uniting 40,000 crusading attendees with millions of global investors in collective celebration of the joys and rewards of investing.

The low volatility stock market rally chose to exit stage left as we embarked on our year-end holiday celebrations and cheered the annual growth in our portfolios. Little did we know how soon the calm would be coming to a screeching halt.

The turbulence which riled U.S. equities in early February spread to short-term credit markets during March. As the S&P 500 Index1 slumped towards ongoing retest of February lows, various measures of dollar funding stress surged to post-crisis highs

One prominent 2017 storyline was, "Gold is dead — long live cryptocurrencies!" Gold and cryptocurrencies were cast as opponents in a "monetary" boxing ring featuring the two best alternatives to fiat currencies that are decentralized and function outside traditional government-controlled financial systems.

"If you have goals for your money, you might benefit by focusing on company quality based on specific metrics."

• Some speculators treat gold stocks like lottery tickets.
• Smart investors have financial goals and fit gold stocks into their portfolio.

"Historically, when gold rises steadily, or makes a significant jump upwards, the share prices of those companies rise in tandem."After the rapid rise to $1,250 from the low of $1,050 per ounce in late 2015, gold traded in a range between $1,200 to $1,300 for most of 2016 and 2017.

Growth expectations for the major global economies have moderated and other key fundamentals stole the spotlight in recent weeks. Any rumblings of slowing economic growth were put on the back-burner as inflation woes crept higher at the beginning of the year. With the return of volatility to the broader market and the heightened uncertainty over trade and tariffs the usual suspects received less airtime.

On November 21, Venezuela failed to make $247 million in coupon payments on its dollar bonds due in 2025 and 2026. These bonds now trade at around 22 cents on the dollar, a decline of 78 percent below par.