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Victor Dergunov, The Financial Prophet, talks his 5 step plan (0:30) Bullish on gold (3:30) Gold and interest rates (6:00) Energy names to like and the price of oil (12:10) Palantir, AMD, Tesla and the tech sector (21:00)
Transcript
Rena Sherbill: Welcome back to Investing Experts, The Financial Prophet himself, Victor Dergunov. Always a pleasure to talk to you. Thanks for joining us again.
Victor Dergunov: The pleasure is all mine. Thank you, Rena. I’m glad to be on your podcast and very much looking forward to our conversation as always.
Rena Sherbill: Likewise, as always, so let’s start us off. It’s the end of March 2026, another unprecedented, let’s say for lack of a better term right now year, a lot to note about the market, be it in energy or tech or out of tech or the broad market or gold or not in gold.
For those of you who have missed Victor’s previous appearances, there are a slew to catch up on your investing strategy, but share with investors today, how would you express how you’re looking at and thinking about and analyzing the markets?
Victor Dergunov: So last time we spoke, I believe it was around late last year and already going into January, I was becoming more cautious. I actually wrote an article about this today. That even back in January, I was becoming a lot more cautious on especially the riskier sides of the stock market.
So I began basically taking profits. I actually put out an article with a five step plan where it was outlined that number one, reduce risk. So I took a lot of my riskier equity positions and basically just decreased a lot of them. I sold a lot of them for good profit that I’ve had over the last few years.
Number two was to raise cash. So I actually went from using some margin to about, I believe 20 % cash at at one point earlier this year. I’ve put some of that cash back to work recently and into into like the badly beaten down gold miners and some other sectors that that I find more attractive now like oil. Number three was rotation.
So basically I rotated a lot out of the riskier assets, tech, high alpha stocks, and got into more defensive sectors, and especially, I would say gold. And gold very recently, actually, I started getting back into it because I typically have a large gold position because it works very well in a diversified portfolio.
So that’s done really well over, before it crashed, basically. But my point being is that I sold a lot of my gold and silver positions on the way up and around the peak. And I just recently started reentering them after the significant declines after like the 40 to 50 percent declines that many of the stocks have had in the sector.
So I’m feeling a little bit more comfortable kind of putting my money in that segment, especially with the increased uncertainty and the Iran situation.
So that basically has markets on edge. And I was on edge already even before that. And it’s very interesting because one of my favorite analysts, and I don’t really listen to a lot of people on Wall Street, and one of the only guys whose opinion I really listened to is actually Tom Lee.
And I remember Tom Lee was talking about also, it was, believe on a podcast, it was either late last year or early this year. And he was saying how we were gonna go through this period, in this year, probably due to a policy shock that would feel like a bear market.
And I was a little bit surprised to hear him say that because he’s typically a very bullish analyst. But I was actually feeling very similarly at the time. So it really hit home what I was hearing from Tom Lee then. So it even reinforced my thinking that we were gonna have this correction, this pullback ahead. So I started preparing it for it pretty early, I would say about two months ago.
And again, it was with the five step plan and the final two steps being hedging. We increased our hedges with whether it’s covered calls or the cash secured put strategy, or just some some callers.
And then also number five, and that’s more aggressive hedging and basically shorting some, some sectors and some even sector specific ETFs like going long (SQQQ) or something like that to not just to hedge but to also make money when the market is going lower as it is now in a downtrend.
Rena Sherbill: If you would care to expand, expound on your reasons behind gold, we had George Noble on last week talking about how he’s a fan of gold and especially gold miners. How are you looking at that space? Who do you like more than others and why is that? I would say same for energy.
Victor Dergunov: Okay, so the gold space, it’s always been an interesting space for me, like, especially, I would say, over the last one or two years, I started accumulating more and more gold, because I realized that there was a very high probability that gold would go substantially higher. I’ve had various articles saying that gold would go to 5,000, even very recently, about five or six months ago.
We had stocks like Hecla Mining (HL) trading at four or $5. We had stocks like Newmont Mining (NEM) trading at like $40 or something like that. We had really, really low, just remarkably low valuation and price action in some of these extremely high quality gold and silver stocks that were likely to increase their profits considerably as the underlying assets increased in value, gold and silver primarily.
So I was very much prepared for this gold (GLD) and silver (SLV) rally and I naturally decreased a lot of my positions as things were becoming parabolic in the market up to where I actually sold all of my gold and silver positions aside from just my physical gold and part of my physical silver position.
I was actually able to unload part of my physical silver position right around the top for about 114, 114.50 I actually sold it at. So I got an excellent price on part of my physical silver position.
And the funny thing is, is that I was trying to then sell more silver after the market crashed and then came back a little bit and all the dealers were just running for me. They were like, no, we are not buying any physical silver. They were so scared. So yeah, I couldn’t sell anymore. And that’s okay, I’m fine.
But some of the companies that I’m looking at now are first of all, Barrick Mining (B) because it’s become so, so cheap. It has like a four something dividend. So it’s an incredibly solid company. It’s, I believe it’s the second most significant gold miner globally. So I really like Barrick a lot. Newmont is a decent play being the biggest gold miner globally.
The best managed gold miner I like is Angico Eagle Mines (AEM). It’s a Canadian company, but it’s excellent. I think it’s the best managed gold company. So on a bigger pullback, I would increase some of those shares.
And also Kinross Gold (KGC) I bought recently, which is another very solid company. I believe it’s international. It’s not American, but it’s a very good gold company with bright prospects ahead, I believe.
And in the silver space, I continue to like Pan-American Silver (PAAS) and Hecla Mining as my primary place. And if we use an ETF, it’s (SLVP) I like, (GDX) and (GDXJ) also. And you also mentioned the energy sector.
Rena Sherbill: I was going to say, if I can just interrupt for a second, before you before you got to energy with which I appreciate you getting to, what would you say because there’s so many detractors, especially with the sell off recently in gold and what’s happening and energy but also people’s belief that the gold bullishness that we have seen in the past year to two years to a few years is not something that’s sustainable long term or not something that’s even worth getting into.
What would you say is the most compelling bearish note to gold and the miners and how would you counter it? Or would you say there’s anything even that compelling for you?
Victor Dergunov: Yeah, well, it’s not as compelling as it was, of course, when gold was at like 1500 or 1800, right? So obviously, it being at over 4000 is not as compelling as it was back then, price wise. However, I do believe that gold does have more upside potential.
So really what’s weighing on the gold market aside from the parabolic move that we had that we need to have a some sort of period of consolidation, pullback, maybe further correctional correction phase. But I don’t think that the bull market is over because there are fundamental elements that should support higher gold prices long term.
Now, the thing that that’s really impacting gold prices the most right now, it’s that the Fed interest rate cut probabilities have essentially disappeared for 2026.
For instance, about two months ago, right, there was roughly, I believe, an 80 % probability that we would see at least 125 basis point rate cut by September of this year, right, about an 80 % probability. Now, if you look at the rate cut probabilities, there is a 0 % chance that we will see a rate cut by September, but instead, there’s about a 20 % probability that we could see a rate cut. So we’ve seen basically the rate, interest rate, I’m sorry, that we will see a rate hike. There’s now about a 20 % probability. So the market has basically flipped from expecting rate cuts to potentially seeing rate hikes.
Now this is what really weighs on gold and silver the most because this essentially is telling us that the Fed will be pulling liquidity out of the market instead of injecting liquidity into the market with lower interest rates and quantitative easing. the way, basically this is how the chain goes.
So we have the war, right? It kind of came out of maybe nowhere, I guess. The war is causing oil prices to increase.
Oil prices are causing inflation to rise and inflation expectations to increase. Inflation expectations increasing are causing the Fed or at least the market to project that the Federal Reserve will no longer be looking to cut interest rates this year. Instead, it may look to hike. Okay, and that is a big problem for risk assets.
That’s why we’re seeing downside in major market averages now in my view for, I mean, there are other reasons why, but that’s the primary reason. And also that weighs on gold and silver prices the most in my view is that temporary in my view, flip in the interest rate trajectory.
First of all, lower interest rates, they basically create more demand for gold because people don’t really want to invest in bonds, especially if inflation could be rising, they don’t want to be getting a really low yield on, you know, with bonds. So gold becomes that alternative asset class that should experience more demand.
Then of course there is the increasing of the money supply. When the Fed cuts interest rates and especially when the Fed does quantitative easing, it’s essentially just creating money out of nothing. That’s all the Federal Reserve is doing.
I don’t want it to sound like a conspiracy theory, but in reality, it is a very sophisticated Ponzi scheme, basically the way that the Federal Reserve system works relative to the Treasury Department. I mean, the Fed just punches numbers on the keyboard, creates, let’s say $2 trillion, then takes that $2 trillion and buys bonds from the Treasury which artificially then causes interest rates to go down.
That’s basically what would happen if the Fed went out and bought 30 year treasuries. We would have much lower mortgage rates in America. So that dynamic of creating, increasing the money supply is what actually drives gold prices higher.
Rena Sherbill: Before we get to energy, before you get to energy, if you got the nomination over Warsh, what would you say? What would you want to do? How would you want to kind of, how would you want the Fed to act?
Victor Dergunov: So that’s a great question. And to be honest with you, it’s a bit of a tough job to be in right now because the Fed is really caught between a rock and a hard place in the sense that the labor market is weakening, but we are seeing higher inflation.
However, I would look through that inflation as being transitory. And I know the Fed is now scared and afraid to use that word because they kept using it back in after the coronavirus. They kept saying that inflation was transitory. They use it a million times and we found out that it wasn’t. This time I really do. This is not the coronavirus.
A temporary oil shock is transitory, a temporary increase in tariffs is temporary. It is transitory. So it’s not this prolonged type of inflation, it is a temporary uptick in inflation. That’s how I would look at it more. So I would actually be more for easier monetary policy.
And first of all, I would focus the most on the mortgage market because we just had really negative data where the sellers outnumbered the buyers by like a record amount. So that’s a big issue.
Now, if I were the Fed chair, I would focus more on improving the housing market, improving the labor market and making sure that our economy was doing well. If we have to go through a transitory phase of slightly higher inflation, whether it be 3 % or 3.5%. I don’t think that that’s as bad as having a collapse in the housing market potentially, or possibly facing a recession from a worsening labor market and decreased consumer spending, or just having rates too high on credit cards and mortgages and having a potential slowdown or recession from that.
So I would certainly be focusing more on that side of the equation rather to the transitory inflation part. So I would certainly be a lot more dovish. And I believe that the Fed will be, that’s the thing that I think the market is mispricing here. It’s like when the pendulum swings too far in one direction right now because of all the panic and the temporary threat of higher oil prices.
I think that that way too much emphasis is being placed on the long-term negative possible ramifications of the conflict rather than discussing the positive impacts in which which should occur intermediate and longer term.
Rena Sherbill: So energy, what are your thoughts? What names do you like? Why? What are your thoughts on the price of oil?
Victor Dergunov: Yeah, energy is very interesting. And I’ve actually been paying attention to energy for a while now. And it goes back to, to my, big part of my investment philosophy is where I look for sectors that have been underperforming for some time that have been overlooked by the market that, you know, are irrationally cheap. And that’s where energy has been for a while.
We were looking at price to earnings ratios of like seven or eight in high quality companies like Devon Energy (DVN), (APA) and many, many others. We were looking at basically rock bottom multiples and many of these stocks have rocked from like, I think APA’s up from like 14 or $15 when it bottomed in April to about like $45 or something like that now.
And many other stocks in that oil segment, oil and gas segment have done really, really well. So that’s been a sector that I’ve been focusing on. I’ve been talking about it a lot in my investment group. I’ve had really good profits in my portfolios with these stocks, of course.
And I’ve also been focusing not only on the oil majors and independent producers, but also I’ve been focusing a lot on the oil services segment, which is like ETF (OIH) and it has, it has companies like Schlumberger (SLB), Halliburton (HAL), Baker Hughes (BKR).
These are some of my favorite companies to own here. And that’s because they’re going to have a lot of business ahead. When it’s time to rebuild the middle East, there’s no one better than these top high quality companies, especially Schlumberger and Halliburton in my view.
So I think that those two and Baker Hughes, those three should, should benefit a lot going forward and not just them. Some of the smaller players should do well too. So I’ve been very keen on these companies and I own these stocks as well as the (XLE) ETF, which is basically Exxon (XOM) and Chevron (CVX) and other majors.
And then I own some independent companies like Devon and also the ETF OIH like I mentioned.
Rena Sherbill: Schlumberger was another stock that George Noble was talking about if you’re going to own anything in energy on that one.
Victor Dergunov: Yeah, I think it’s the best. And that’s because they’re positioning themselves as a technological leader in the space, even like, they’re rebranding themselves as like an AI company.
It’s pretty interesting, but they’re actually putting a lot of money into R &D and they’re developing an AI system that should give them an edge against their competitors. So yeah, I certainly agree with your prior guest.
Rena Sherbill: And anything else to add about the energy sector at large or the oil price?
Victor Dergunov: Yeah, I mean, it’s just a very fluid situation and there’s a lot of uncertainty here. So I mean, this could go several ways. They could try to take Kharg Island. That’s kind of like the the noise of the moment here.
And if that occurs, I mean, that’s of course, that’s going to require some sort of boots on the ground. And then that introduces a lot of uncertainty into the market because we don’t know, could some of our troops be potentially hurt, of course, there’s a lot of backup in the region, but still there’s still many uncertain factors when you’re dealing with ground forces on the ground.
So I’m a little bit cautious of this scenario, which could of course occur if they don’t come to some sort of concrete agreement within the next several days. I’ve seen a lot of hardware, a lot of Marines moving out there. So it does look like that the administration is preparing for some sort of land. I don’t want to call it an invasion, but maybe an encroachment on partial Iranian territory like Kharg Island would actually make a lot of strategical sense.
And from there we could potentially then control the Strait of Hormuz which would be an extremely net positive intermediate and long-term. And that could actually then knock oil prices down a lot once that occurs.
And I believe that that’s probably the base case scenario that, since several weeks from now, the situation is going to probably look much different. And I certainly think that the control of the Strait will ultimately be controlled by a competent US president.
Rena Sherbill: Now, if you were president, no, just kidding. Not gonna get into that.
Victor Dergunov: I would do some things. I would certainly do some things. Yeah, next time. Next time. Next time. Next time.
Rena Sherbill: Outside the purview of this humble podcast. But yeah, I bet we could get together, Victor, and get some ideas going.
Speaking of which, did you see, I just was listening to Wall Street Lunch today, and Kim was talking about the President’s Council on Science and Technology. Any thoughts about where technology’s at?
You were one of the first people I heard talking so bullishly about Palantir (PLTR) years ago. Anything to say about the tech space these days?
Victor Dergunov: I missed that presentation, unfortunately. We got into Palantir at an ideal moment. I believe I made it the most significant portfolio holding when the stock was around six or $7 and I kept pounding the table on it, writing articles saying, this is the company that’s gonna dominate. It’s a monopoly. I mean, it was an obvious monopoly.
So, yeah, we made a lot of money on Palantir. We rode it all the way up to about 150. And then I said, well, now it looks kind of just too expensive for me. And then I actually went ahead and I shorted the stock at 207 right before it reported earnings, just because I realized that no matter how good earnings were going to be, the stock would probably decline from a $600 billion valuation when,
It was supposed to report about I think $6 billion in sales the following year. So yeah, the valuation aspect just got completely out of hand in Palantir. Now, the way I’m looking at tech here is that of course we’re not in such a lucrative period as we were back in late 2022 and early 2023 because back then we were getting into a lot of Nvidia (NVDA) stock, Meta (META), Google (GOOG) (GOOGL), you name it, AI, was in the portfolio, Palantir, of course.
But here we’re going through a bit of an AI scare as well in this sort of correction process because it’s just that stage of the cycle where we’re getting the search, the circular financing concerns, we’re getting some back walk from Nvidia first, we’re going to invest $100 billion in OpenAI (OPENAI), now it’s 30 billion and that puts into question, how is OpenAI going to pay for their, I think it’s something like 1.4 trillion in obligations over the next, I don’t know, like five or so years, how are they going to pay for all these when they’re not actually being funded as much as, as they would like, although there are probably certain channels that they could tap to raise a lot of debt and they’re going to IPO most likely within the next, within the next year, maybe sooner.
So, I am still bullish on a lot of tech and I think we’re getting, we’re getting opportunities, opportunities here, but, we certainly have to be more selective now. And I think we need to be a little bit more patient in this drawdown period because some of the tech charts have become more negative, like if looking at something like Nvidia, basically even like the broader tech market is below its 200 day moving average now.
So we have to remember that in the near term, the technicals and the sentiment, they’re gonna trump the fundamentals. Even though we’re very confident that (AMD) is going to do extremely well in the future. And you know, it’s not could go to four or $500 within within the next one or two years, potentially, right? And like a base to a bullish case scenario.
But we can’t forget that the near term also matters to a lot of people and this kind of uncertain atmosphere that we’re in, right? Because of the war, because of what the Fed could do, what the Fed may not do. There’s a lot of uncertainty there.
This sort of period could last a bit longer, meaning that we could have a continued drawdown. We could have a more significant correction. So far we’ve had about, I think, an 8 % correction in the S&P 500 (SP500) and like about exactly a 10 % correction in the NASDAQ or in the NASDAQ 100. So I think that these could potentially go a little bit deeper again, if things escalate more, like we have some sort of ground incursion.
If maybe there’s not an agreement within the next several days. I believe that the market could view this as, as a negative near term signal. And again, technically and sentiment wise.
we’re not in the best place right now, which again, it tells us that we just need to be a little bit more patient. The buying opportunities will come to us and we should see a very solid buying opportunity, most likely in the near term that could then turn into a very lucrative intermediate and longer term opportunity as we advance.
Rena Sherbill: What else would you say about the names that you’re shorting?
Victor Dergunov: So I’m actually not shorting anything at the moment because there’s so much uncertainty in the market. But some of the names that I have shorted recently, again, Palantir, it wasn’t that recent.
But Palantir was a short for me. And I went right ahead and shorted right before earnings too, which probably a lot of people wouldn’t do. But I just realized that no matter how good the earnings were gonna be, the stock was gonna go down.
It was going to be a sell the news event. In my mind, it was like at least an 80% probability of that. So that’s why I did that trade. I shorted Zscaler (ZS) right around the highs at like 330. I shorted a lot of the silver stocks right at their peak and gold stocks as well. Hecla Mining around 30, above 30, I was shorting.
First Majestic (AG) above 30, I was shorting. And then we actually had a really nice second opportunity with First Majestic to short that on a second move higher. The stock had this really irrational move. So I went ahead and shorted that.
Oklo (OKLO) was one of my most successful shorts, actually. I caught that one right at the peak, right at around $190. So that was one of the probably one of the best shorts over the last few months, because it went from like 190 down to a hundred very, very quickly. And then when it jumped back to like 150, basically formed a second shoulder in a negative head and shoulders pattern. So I went ahead and shorted it again. And now it’s at like 55 bucks. Of course, I didn’t hold that my short this long. It’s typically more of a way shorter term sort of strategy I implement to capitalize on the downside in the market.
It’s not something that I do continuously like right now. There’s just too much uncertainty where things can go, you know, things can go up or down on a single tweet like we saw the other day. The market was down, it looked like it was heading lower than one truth social post later, and the market was 4 % higher within minutes. So that was the kind of world that we live in. So you have to be very careful shorting.
Rena Sherbill: Yeah, I think that’s good advice. Wise counsel. Victor, what else would you add to this conversation? What else do you feel like is noteworthy, newsworthy of value for investors to be keeping in mind these days?
Victor Dergunov: So I think, in the near term, the situation here, there’s a lot of uncertainty. So you want to have some cash, you want to be well diversified, you want to have, that sort of dry powder to implement when the market does finally reach a low point, because to be perfectly honest with you, I don’t think that we’re there yet.
I think that we may be close, maybe, you know, I don’t want to put a percentage terms on there, but we maybe were 75 or 80 % of the way there. still with this level of uncertainty and the technical image, again, we’re seeing like all the three analyses sort of aligning here, you know, the technical images isn’t great right now, the sentiment, it’s really bad, but it’s not as low as it can go.
And fundamentally, there’s a lot of uncertainty and there are, I would say, probably more negative near term fundamental catalysts than there are potential positive ones. And once we have a convergence of these three analyses, the path of least resistance remains lower until we really see maybe some sort of a washout process, possibly something similar to what we saw in maybe August of 2024, some sort of a bit more of a significant pullback because I believe that the market still has a lot of things to kind of digest here.
Rena Sherbill: Just because we talked about it last episode, as we wind down this conversation and reminding listeners that you run The Financial Prophet, an investing group on Seeking Alpha, have run it for many, many years to great acclaim and success.
Two of the names that you were talking about last episode back in November were AMD and Tesla (TSLA). What would you, anything to update listeners with there?
Victor Dergunov: Yeah, so these are still two of my two of my core positions. I still have significant positions in both companies. I’ve recently hedged part of my significant part of my of my Tesla position. So I don’t I don’t get a big a bigger drawdown in that if you know if this correction process continues.
Rena Sherbill: What does that mean exactly? Hedging in this case? How are you hedging exactly?
Victor Dergunov: So I’m basically hedging Tesla via covered call options, sold covered call options with, I believe it’s the 15th of May expiry with a $420 strike price. And I sold those a while back. So I really nice premiums for them. I think something like 20 or two, or actually even more.
I think I got like a $25 premium for them or possibly even higher. But the thing is, is that these options are now a lot cheaper, so I could potentially buy them back, but I’m still holding on to them. And just because I believe that that there could still be more volatility in Tesla and it could potentially go lower. So I could possibly repurchase them at a lower level.
And I’ve also considered a collar strategy on Tesla where I would then use some of that premium from the covered calls to potentially buy some put options to further protect my downside in Tesla.
And I have actually a similar strategy with (AMD) where I sold covered calls against part of my AMD position. And I’m just kind of waiting right now to see what happens in the near term, whether I will buy those covered calls back or I may just let them expire if the stock goes higher.
It really doesn’t matter that much to me because I got a really good premium form and I have a very significant AMD position. And even if those options get exercised and those shares get pulled, then I still have a significant AMD position. And I have considerably higher price targets for these stocks. For instance, AMD.
I have a price target of about 350 for the next 12 months. And my Tesla price target is around 550. So I have substantially higher price targets. Or actually 550 to 600 range.
Rena Sherbill: Thank you, Victor. Always appreciate you coming on. Any final thoughts for listeners?
Victor Dergunov: Please be careful, be cautious in this sort of market environment, but don’t be afraid to make the big move when the time is right. You will get signals again from the fundamental, from the technical, and from the sentiment-based analyses when they converge correctly, you will get a comprehensive buy signal for when you could really re-enter the market or increase your positions in the market, again, to really capitalize and increase your overall returns.
Rena Sherbill: Out of curiosity, do you have a motto that you live by?
Victor Dergunov: I do have several so I think this one that I really like is it’s not about what other people really think of me it’s mostly about what I think about myself and I believe that detaching myself from from anyone else’s let’s say anyone else’s influence. Not being really influenced, by anyone’s opinions and kind of detaching from, from, from that aspect really helps me kind of focus on my investment strategy.
It really helps me stay calm in periods when people panic, which is very important, because that’s when I can take that big step forward. And when everyone is panicking, I’ll go in and buy. And on the flip side, you know, it helps me detach from my emotions. So I stay away from the FOMO.
Yes, maybe I’ll sell a stock too early sometimes, but it’s much better than riding a wave up and then riding it on a roller coaster down again. So I think that mentality and that, that thinking really, really helps me with investing a lot.
And that’s also a model that I live by, that I don’t really let people influence me as much as possible and I like to have my own opinions. I like to formulate my own investment decisions based on my own research and my own opinions. And I believe that being your own man or being your own person really, really helps with that.
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