UK-based Simon Popple was making good money in his 30s as a director at one of the world’s largest private property companies.

At the time, he assumed his growing pension fund would set him up for a comfy retirement.

“Fortunately, twelve years ago, I did a bit of maths,” Popple says in the intro to his new book, Investing in a Recession: Time to Think About Gold.

“The question was really simple: what happens to my pension if we get inflation? I crunched a few numbers and things got really depressing.

“Let’s say your pension pot is worth £1,000,000.

“If you multiply that pot by the present value factor (if we get 8% inflation for ten years), in today’s money, it’s actually worth about £463,000.”

Inflation was going to corrode the value of every dollar (or pound) Popple saved.

Driven by the need for a pension he could actually live off, Popple left his well-paying job and started investing in commodities, mostly gold, full time.

“One of my investments was life-changing, and I made a lot of money,” he says.

“Several others did very well, too. My pension pot went from around £192,231 to £790,396 in less than nine months.

“Now, I’m on track to live, not just exist.”

In 2008, he set up Brookville Capital, a capital-raising business which subsequently won mandates with, amongst others, Bunge, the Bank of China (Suisse) and Fleming Family & Partners.

(He also gives Stockhead readers stock tips from time to time, including a legendary ‘pre-Julimar’ call on Chalice Mining (ASX:CHN).)

 

Prepare the for the next gold bull market

In 2023, evidence strongly suggests that the next leg of the gold bull market it is getting closer and closer as people starting to wake up to the devastating impact inflation and recession could have on their investments.

“In these challenging times, you’ve got to admit, things just don’t feel right,” Popple says.

“Gold could be the critical store of value you need.

“It has been around for thousands of years. It’s trusted. And right now, I think trust is in short supply.”

Popple’s easy-to-read book breaks down the basics of gold investing for the beginner.

He says that by the end you’ll be full bottle on things like:

  • How gold has performed in previous downturns.
  • What to look for when analysing gold mining stocks.
  • What the gold:silver ratio is, and why you should keep an eye on it
  • Investing mistakes Popple made during previous bull markets.
  • His six pillars of investing, and the B.R.I.D.G.E system.

We’re working our way through Popple’s book and will bring you more in the next couple of weeks. Here’s a preview of chapter 12 called …

 

The Biggest Mistakes I, Popple, Made in The Last Bull Run & How to Avoid Them.

It’s true – during bull markets you can blindly invest in a pile of crappy stocks and still make profits. You can also be left holding the bag, which is why for long terms gains it is important to have a plan.

“Gold booms (like it did in 2011) can make and lose a lot of money for people. I want you to be on the right side if we get another boom,” Popple says.

“The secret to long-term success is to have a strategy.”

 

#1 PICK YOUR DREAM TEAM

Think of the gold-mining universe as a fantasy football team, he says.

The largest, lowest risk companies with many mines are your goalkeepers. That includes majors like Newcrest (ASX:NCM) and Northern Star (ASX:NST).

Smaller, higher risk producers — like Regis Resources (ASX:RRL), Ramelius Resources (ASX:RMS) Perseus Mining (ASX:PRU) and West African Resources (ASX:WAF)  — are your defenders.

Those who are perhaps near term miners or new to production ( like Bellevue Gold (ASX:BGL) or Capricorn Metals (ASX:CMM)) are your midfielders, and the explorers (no production) are your forwards.

“If you want a good team, it makes sense to have players in all positions, so I would look to have a broad portfolio,” Popple says.

“If you want to take less risk, put together a more defensive team.

“Alternatively, if you want more risk, you may want a more attacking formation. Because I know the market well, I’m comfortable taking more risk; if you’re new to it, you may want to be a bit more conservative.”

 

#2 KNOW WHEN TO SELL

Picking the right stock is important. It’s also important to know when to sell,  Popple says, because that’s when you make money.

“Having identified what you want in your portfolio, I would then urge you to write down what you want to make,” he says.

“When you’re happy with your return, you can then sell. Perhaps you’ll sell your stocks over a period of time but still sell.”

 

#3 DONT BUY CHEAP STOCKS JUST BECAUSE THEY ARE CHEAP

Another big mistake people often make is they sell a good gold mining stock and go and buy a bad one because it’s cheap, Popple says.

“If it’s cheap, there’s normally a good reason why.

“Although you may be able to get away with this for a while, you can be left holding shares in particularly bad companies when the cycle turns.”

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