I'm a gold bear. That means I don't think investors should be storing significant amounts of their savings in the barbarous relic.
You can hear me opine at length on the reasons why in this podcast I did with Tracey Ryniec...
Since that recording was published on September 4, the
SPDR Gold ETF GLD
is down 6% and my favorite industry is up over 15%, with some key stocks sporting gains of 50-75%.
I'll cover that explosive sector in a moment, right after I tell you what recent event has made me even more bearish on gold.
Astronomers have been studying a large metals-rich asteroid named Psyche in the rocky belt between the orbits of Jupiter and Mars which could contain enough gold to make everyone on the planet a billionaire.
Psyche, discovered by the Italian astronomer Annibale de Gasparis on 17 March 1852 from Naples and named after the Greek mythological figure, is one of the ten most massive objects in the asteroid belt. At over 200 km in diameter, it contains a little less than 1% of the mass of the entire asteroid belt.
Most importantly to our discussion here, Psyche is thought to be the exposed iron core of a protoplanet, and is the most massive metallic M-type asteroid. If you know anything about the molten metal core of Earth, you will not be surprised to imagine what Psyche could possess as astronomers have measured and estimated its density to be consistent with that of other metallic asteroids.
According to radar and other sophisticated observations, Psyche appears to have a surface that is 90% metallic and scientists think that these metals are mostly iron and nickel. And this is where the speculation arises that its potential abundance of dense metals could also consist of sizable amounts of gold and platinum.
One estimate is that Psyche, roughly the size of West Virginia, contains over $5,000 quadrillion ($50,000 trillion) of gold at current prices near $1,500.
What if a space-based mining mission were set up on Psyche that could start bringing back tons of new gold?
That amount of new supply would certainly put a dent in gold prices, now wouldn't it?
Well don't worry gold investors because that's a long way off.
Oh wait -- NASA just called and said "Hold my Krugerrand."
Mission to Psyche in 2022, Gets There in 2026
"Astronomers on Earth have studied 16 Psyche in visible and infrared wavelengths, as well as radar, which suggest Psyche is shaped somewhat like a potato. Observations indicate that its dimensions are 173 miles by 144 miles, by 117 miles."
Those measurements are where I took my cue to compare Psyche's size to West Virginia at 24,000 square miles (173 x 144 = 24,900sm).
Psyche takes about five Earth years to complete one orbit of the Sun, but only about four hours to rotate on its axis and complete a Psyche “day”. Since scientists wonder whether Psyche could be an exposed core of an early planet that lost its rocky outer layers due to a number of violent collisions billions of years ago, they are extremely curious to begin the first mission to investigate a world of metal rather than of rock and ice.
We cannot see or measure Earth's core directly and so this mission will offer a window into the violent history of collisions and accretion that created terrestrial planets.
More from NASA...
"This intriguing asteroid is now the primary target of the Psyche mission. Targeted to launch in August of 2022, the Psyche spacecraft would arrive at the asteroid in early 2026, following a Mars gravity assist in 2023. Over 21 months in orbit, the spacecraft will map and study 16 Psyche’s properties using a multispectral imager, a gamma ray and neutron spectrometer, a magnetometer, and a radio instrument (for gravity measurement). The mission’s goal is, among other things, to determine whether Psyche is indeed the core of a planet-size object."
Obviously, NASA's scientific mission has priorities that have nothing to do with finding and mining precious metals. But that doesn't mean commercial space explorers haven't been chomping at the booster rocket to set foot on some metals-rich rocks, after asteroid ownership was made legal for US companies in 2015.
But the only firm with any reasonable shot at participating in that future might be Elon Musk's SpaceX, and not just because the
founder is well-funded and "bold," as we learned from the 2016 book by space exploration pioneer Peter Diamandis. In Bold, Diamandis profiled the extra-planetary visions of Musk, Richard Branson of Virgin Galactic and Jeff Bezos of Blue Origin.
But Musk is the first to begin mastering a key technology essential for landing on outer space asteroids with his Falcon Heavy craft that can also return to Earth's atmosphere and land.
Martin Elvis, an astronomer from the Harvard-Smithsonian Center for Astrophysics, spoke at the American Association for the Advancement of Science (AAAS) annual meeting in Austin, Texas in 2018 and told the audience that he believes Falcon Heavy has the potential to make asteroid mining a significant commercial reality by increasing the number of asteroids that could be landed on by an order of magnitude.
According to Ryan F. Mandelbaum writing for Gizmodo in 2018, Elvis said of Musk's rocket technology “Instead of a few hundred, we may have thousands of ore-bearing asteroids available."
We may not see the first ounce of gold from outer space for another 10 years or more. But when we do, it could be cataclysmic for the price of the yellow metal.
The Journey to Alnylam
Now let's talk about the industry that will create more millionaires than gold in the next decade. If you remember the podcast with Tracey in September, or you made an excellent guess, you might know that I'm talking about Biotechnology.
Since that chat, where I discussed some of my special reports like The Century of Biology, one of my favorite investments
CRISPR Therapeutics CRSP
is up 50%. And my Healthcare Innovators portfolio has an 80% gain as we adjusted our cost basis even more favorably during the October dip under $40.
And even the more diversified, and thus more conservative, ETFs (baskets of stocks) for the industry group are up over 15%, like the
Nasdaq Biotech Index IBB
and the equal-weighted S&P Biotech ETF (XBI).
That's because CRSP wasn't the only thing moving in Biotech. We also saw
Global Blood Therapeutics
GBT Quick Quote GBT - Free Report
) launch over 30% after receiving FDA accelerated approval for their treatment for sickle cell disease.
And then there's
, up 45% since mid October after receiving its second FDA approval to treat a rare genetic disease using RNA interference therapies.
I first identified ALNY as a promising Biotech investment in 2013 when it was trading under $30. It has quadrupled since then to nearly $120 and so I'm very glad I put my Healthcare Innovators members back in the stock at $80 last month.
ALNY is named after Alnilam, a large blue supergiant star some 2,000 light-years distant in the constellation of Orion. It is estimated to be 275,000 to 832,000 times as luminous as the Sun, and 30–64.5 times as massive.
We won't be traveling there any time soon. But in the time it takes the NASA mission to land on Psyche, ALNY shares could quadruple again.
You won't get that from gold in the next 7 years.
This is an exquisite coincidence for me as a gold bear who thinks it should be worth less than $500 an ounce -- while I also believe that Alnylam could at least triple in a longer journey to 2026 by virtue of its leading platform R&D in RNAi.
The Genomic Revolution
Whenever I talk about "the century of biology" or the prospects for genetic and cell therapies, I tell people they should be excited to be living right in the middle of this revolution.
Even if you don't have capital available to invest or time to research the companies, the research and discoveries being made are world-changing. There will be ethical challenges with gene editing and the costs associated with advanced therapies.
But there will also always be wonder to behold on the bleeding edges of science.
And so one plea I also make to new Biotech investors is the one I made recently on an episode of The Paper Traders podcast...
In that chat I made the case very strongly that every investor should at least buy a Biotech ETF like IBB, XBI, or the
ARK Genomics ETF ARKG
. This accomplishes at least two things: first, you are invested in the industry with very low risk, and second, you expose yourself to learning about the top ten companies within the ETFs.
Or I should say, I at least hope you become curious about them.
Because becoming more curious about science and technology is never a bad thing.
And it may actually become a necessary thing in the next few decades. I know this is a wild idea to most because the presidential candidate who intrigues me most, is among those least likely to win as too few citizens care about his ideas or vision: Andrew Yang.
Yang really understands the power of technology like AI, automation and even Biotech that are about to drastically change the world. He also knows that education is the most important institution we need to be reinventing to help people respond creatively to these unstoppable revolutions.
To understand why I think he has greater vision than any other candidate, see these 2 podcasts/articles...
You may not agree with Yang's Freedom Dividend (a proposal along the lines of Universal Basic Income), where every citizen would receive a monthly check for $1,000.
But after you listen to my podcasts and read my articles above about what is coming with AI and other advanced technologies that the rich and powerful will control, you might pay more attention to what he is saying.
Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the Healthcare Innovators portfolio.