The San Francisco Hard Assets Investment Conference is an exciting annual conference where investors can go to hear experts speak and to connect with mining companies who are eager to share their exciting stories.
During this past San Francisco Hard Assets Investment Conference, we met up with Tom O'Brien, a market expert who was also a speaker at the show. Mr. O'Brien is the CEO of Tiger Financial and the host of the nationally syndicated radio program "The Tom O'Brien Show".
Mr. O'Brien is the author of two bestselling books. His first book, published in 2005 is called Timing the Trade: How Price and Volume Move Markets. His second book is a recent publication, entitled The Art of Timing Your Trade: the Ultimate Trading Mastery System, and our conversation started by talking about this book: "I'm always looking for supply and demand equations in the market place," said Mr. O'Brien. "So the book is a system that helps investors find supply and demand."
Supply and demand is a well-known but little-understood concept among investors. The high level concept is that supply and demand influence price – when there's more supply than demand, prices drop; when there's more demand than supply, price rise. That's the reality of the "auction" that we call the stock market.
"In the marketplace, people don't see each other and they're bidding things up and buying things on less volume," explained Mr. O'Brien. "That volume helps to identify opportunities." So his book, then, is a system he offers readers to understand supply and demand and to trade more effectively from it. In his book, he teaches how to read stocks using a variety of analytical tools, and he outlines some risk management techniques investors can use to minimize the downside and increase profitability.
His book is available on Amazon, in Barnes and Noble, and in other book stores. (See the REFERENCES section, below, for links to his books).
Next, we talked about Mr. O'Brien's background and what he does. His website describes him as a "trader and educator" but he is also an author, radio show host, and the founder of a network of traders who call themselves "Tigers".
"I've been doing this since 1980. I started in the bankrupt bond market. I went from the bond market to the equities market." He worked in the equities market over the years and then on April 7th, 2002, he published The Gold Report – his first issue of a gold-focused newsletter. Since then, he has published that newsletter weekly. "I just published my 500th issue this past week," he added. He also publishes another newsletter called "Market Insights".
"In The Gold Report," described Mr. O'Brien, "I cover gold and about 44 gold stocks. I cover bonds. I cover the dollar index, the South African Rand, and the Canadian dollar." Then he adds: "What I'm looking for [in his newsletter coverage] is also supply and demand."
Unlike other experts who share their opinion but don't "put their money where their mouth is", Mr. O'Brien actively trades. "I'm in the markets. I trade a lot, and not a small amount. So it's a little bit different than just thinking about what's going to happen. I've had money behind what I write about for years," he said.
"When I first started in April of 2002, there was only one fund in the gold market. Fidelity owned 14.2% of Goldcorp," Mr. O'Brien said. There are many more now.
One way that Mr. O'Brien tracks supply and demand is to pay attention to filings. "I tag all these large funds," he explained. "When they file, I get an email. I know what they're saying versus what they're doing and in the market. That's dramatic." It's an edge he brings to the market.
So, with his experience and expertise, we asked him on behalf of our readers what he would recommend investors do. "Wait for gold to get back to about $1400," he said. "The dollar is going higher. We'll be looking to invest in Canadian stocks because their currency is going lower. The Rand is going lower. That will put more firepower into equities."
Then he explained further: "Here's what happens: People wonder why gold is $1700 but their gold stocks aren't at an all-time high… but the reason is the mining company is working in a currency that got really strong so their expenses went through the roof. When the Canadian dollar goes from $1.30 down to $0.97, the stocks get killed. Now it's going the other way." Mr. O'Brien is also excited about Goldcorp (NYSE: GG), particularly because of his position on currency valuations.
"I'm bullish on the US dollar and I'm bullish on real estate," said Mr. O'Brien, who then went on to discuss his outlook on real estate. "I've seen downdrafts in my lifetime. This one is a national downdraft, which hasn't happened before. We saw it in 1987 and we saw it in 1974. It was in New York, Boston, California, and Florida. They came back, just like anything else; prices go up."
Investors who want to hear more about Mr. O'Brien's insight, and to go deeper on his supply and demand techniques, can hear his radio show or subscribe to his newsletter. Of his radio show, Mr. O'Brien said: "We broadcast 24 hours a day, 7 days a week. We broadcast live Monday through Friday from 9AM to 1PM and from 3PM to 6PM." And of his newsletter, he said: "The Gold Report is a weekly report and there's a free one-month trial period to give it a test drive."
Mr. O'Brien's supply and demand approach takes us from a well-known concept and reveals a lot of really helpful insights for investors.
REFERENCES
Tom O'Brien's site: http://www.tfnn.com/
Timing the Trade: How Price and Volume Move Markets: http://www.amazon.com/Timing-Trade-Price-Markets-ILLUSTRATED/dp/0976352907/ref=sr_1_8?ie=UTF8&qid=1322967331&sr=8-8
The Art of Timing Your Trade: The Ultimate Trading Mastery System: http://www.amazon.com/Timing-Ultimate-Trading-Mastery-System/dp/0976352915/ref=sr_1_1?ie=UTF8&qid=1322967331&sr=8-1
San Francisco Hard Assets Investment Conference: http://www.hardassetssf.com/