What Resource Companies Are On This Fund Manager's Buy List?

But all of the major gold mining companies have operations in Ghana. So where are you going to go to replace a potential steep depletion rate with a new mine when the country has your back? So I think the government is certainly behind this. I wrote this last night, and when I came in this morning I found out that Shandong Gold Mining Co. (600547:SHA; 1787:HK) has made an all-cash bid for Cardinal, topping the bid made by Nordgold by 31%. I think this is a real question right now: Will there be a counterbid or a new interloper entering the mix? We will see. But I think the bidding is on for assets. As I review recent filings, both MM Asset Management Inc. and Macquarie Bank Limited have lodged reports showing they raised their exposure to Cardinal since the Shandong offer was announced.

There are other companies, too. Just think about single asset companies. Any single asset company is probably a target, but also a single asset company could be looking at another project to combine with it to get some synergies. So I think the game is on right now.

SWR: Is there anything else that you'd like our readers to know?

RA: I recommend investors stick to a sound asset allocation plan. Don't put all of your wealth into gold by any means. A small part will give you good benefits in terms of reducing your overall portfolio volatility. When we look at the economy right now, there's a lot of push to keep interest rates as low as possible. The Fed has some bullets, but it's tough right now. I think the bigger issue also that we're dealing with is social reforms are coming. That may imply higher taxes, but a lot of those things have been sorely underinvested. If you're not investing in people, then you don't really have a business or a country if you don't really take care of the population and give people opportunity, and not just a few people, but lots of people.

SWR: Thanks for your insights, Ralph.

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1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household ...

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