In episode 352, Meb Faber interviews James Rasteh, founder of Coast Capital, and they talk about gold miners and the apparent gold shortage, European activism, and ESG. Coast Capital is a fund that takes a private equity approach to investing in public markets.
James starts by explaining why he’s so bullish on gold miners from both a macro and micro perspective that he created a fund dedicated to activist investing in that space. “We are running out of gold to dig out of the ground, and we don’t have the technology to dig 20km under the surface to reach gold reserves” – that brilliantly sums up the perceived gold shortage. Miners are operationally geared to the price of gold, and they should outperform substantially when gold price starts rising. James describes how, when analyzing miners, you need to properly analyze the fundamentals and particulars: its situation in terms of geology, history, jurisdiction, potential political risks, history of the mine(s) and much more. When discussing investment in miners, James makes a smart reference to the old saying that “opportunity often gets overlooked because it goes around dressed as ‘hard work'”.
Then we talk about the opportunity set in Europe and why James believes the valuation difference between the U.S. and Europe isn’t justified. He stresses that valuations have never been this low, and these present a tremendous investment opportunity. We even talk about the difference between being an activist investor in the U.S. and Europe.
As we wind down, James shares his frustration with the finance industry’s use of ESG as mainly a marketing exercise.
Please enjoy this Meb Faber interview with Coast Capital’s James Rasteh.