Palantir, Troilus Gold, Nikola - Protection from black swans

Troilus Gold - Undiscovered pearl

A purchase of physical gold and/or an investment in promising gold mining stocks for portfolio hedging makes more than sense at current levels, even if the precious metal price from a short-term perspective still has a theoretical setback potential of an estimated 5 to 10%. Due to the Corona pandemic, the multi-billion dollar economic stimulus programs led to a further increase in the already historically high national debt.

The economy is supposed to grow, and jobs are supposed to be secured. The monetary authorities currently regard the high inflation rates as a temporary effect due to the recovery after the lockdowns and are more or less ignored. Thus, interest rates are expected to remain at zero, and the money printing presses will continue to run. A rapid and significant increase in interest rates would drive both governments and indebted companies to financial ruin.

In addition, the strong gold price in 2020 led to record earnings at gold mining producers such as Barrick Gold and Newmont and strongly growing bank accounts, which will be invested in attractive takeover candidates in the near future. One undiscovered pearl is the exploration company Troilus Gold. The Canadian mining company plans to become a gold producer by the end of 2023 at the latest. The place of action is the Troilus mine of the same name in the leading mining district of the Canadian province of Quebec, where the Company owns strategic properties covering an area of 1,420 square kilometers. Between 1996 and 2010, 2 million ounces of gold and around 70,000t of copper were produced there before the mine was shut down for cost reasons.

More than four years ago, the experienced management around the CEO of Troilus Gold, Justin Reid, resumed drilling. Since then, 250,000 meters of drilling have been completed, and the resource estimate has risen to 8.1 million ounces. Currently, the 10,000m per month exploration and infill drilling program is underway. Exceptional results have now come from the Southwest Zone, located approximately 2.5km southwest of the former mine. According to management, these are some of the strongest areas ever drilled at Troilus and illustrate the exciting growth potential at this zone and the extent of the larger Troilus trend.

Despite the news, the stock remains in correction mode and is currently trading at CAD 0.83. Analyst firm Cormark Securities sees Troilus Gold as one of the "top picks" in the gold market and recently assigned a price target of CAD 4.50.

Palantir - Protection from black swans

Black swans are unpredictable events with extreme consequences. The last black swan was certainly the abrupt Coronavirus, which paralyzed both the economy and social life for months. Data analytics specialist Palantir wants to protect itself from such black swans in the future and is hedging its cash of around USD 2 billion with gold and bitcoin. According to the Bloomberg news agency, Palantir spent USD 50.7 million on gold purchases this month. Additionally, the data specialist now accepts gold as payment for its analytics services, in addition to the cryptocurrency Bitcoin. Palantir was able once again to show its impressive growth rate through strong quarterly figures. In the long term, the stock is more than interesting.

Nikola - Is this the bottom?

With fraud allegations against the founder and the exit of major shareholders, things have been anything but smooth for Nikola in recent months. Now, at least, there has been a positive announcement, which should calm the heartbeat of the troubled shareholders a little. The US Department of Energy awarded the fuel cell commercial vehicle specialist a USD 2 million grant that will be used to accelerate research into autonomous refueling technologies for future hydrogen fueling stations. The free fall of Nikola's stock initially continued unabated during the past trading week. The share marked a new low for the year but managed to climb back into the green zone with a gain of more than 3% in Friday trading. Speculative investors should watch the title.

Currently, there is much to be said for an investment in gold. The fears due to the end of the loose monetary policy are anti-cyclical good opportunities to invest in gold mining stocks such as Troilus Gold. The data specialist Palantir, which protects its portfolio with gold and bitcoin, is a role model here.