Financial Sense Newshour Interview With Gold Fund Manager

At the beginning of the third segment of this week's Financial Sense Newshour podcast is a brief interview with Thomas B. Winmill, president of Midas Finds. [.mp3 file.] Winmill's flagship fund, the Midas Fund, has racked up an impressive record in 2009.

He credits his performance to his background as a lawyer, a point that deserves some explanation. Lawyers are habituated to assuming that people shave the truth their way; that attitude helps to discount optimistic press releases and reports. Winmill believes that the truth is shaded less in written documents. This .pdf file of a recent Bloomberg profile explains his investment philosophy.

With regard to gold (and silver) stocks, he prefers ones that grow their reserves over time and/or have high free cash flow. As an example of the former, he brought up Kinross Gold.

One point he emphasized was looking at the background of the executives. A track record of being a minebuilder counts for a lot. (He also points to following through on one's promises. Some managements have had trouble with doing so in the sector.) He think that these two points sift out the big winners from the winners.