Lawrence transitioned his fund to one that focuses entirely on gold investments. His early career was as a venture capitalist in the tech sector. This led him to become involved in the early days of the internet and helped him predict the end of the tech bubble. His research then led him to invest in emerging markets, primarily Asia. In 2008, he was surprised not by the housing bubble itself but the government’s money printing response. This realization led him to study inflation hedges such as gold, mining and oil, and gas. He says, “Those hedges worked well until the Fed began to suppress both the gold market and inflation.”

Currently, inflation is in the process of returning, and the Fed is losing credibility. More people realize that the money system itself is terrible. Unlimited credit is a temporary solution to regular markets, and the end-point of this process could be hyper-inflation. He believes investors will begin to chase gold as the broader markets are likely not headed to new highs. The technical picture for gold is looking good. Commodities are very cheap right now while stocks are almost certainly over-priced.

He outlines the risks with the recent invention of “Modern Monetary Theory.” Many politicians, economists, and groups have latched onto this new flawed economic concept.

He discusses some of his investing mistakes including his belief that 2008 was going to be the end of the dollar. His mistake was underestimating the government’s controls. Whatever solution develops to the existing financial structure will have to be gold backed.

Time Stamp References:
0:40 – His early career as a venture capitalist.
2:20 – The bubble and technology.
4:45 – Emerging markets.
7:00 – 2008 moved into inflation hedges.
8:30 – Central bank market manipulation.
10:30 – Unlimited credit effect on markets.
13:45 – Long term trend should be a return to gold.
15:00 – Technicals look good for gold.
16:00 – Modern Monetary Theory.
18:30 – Cost of Universal Basic Income
21:00 – His market mistakes.
26:00 – Commodities are cheap, stocks are pricey.

Talking Points From This Week’s Episode
• Hyperinflation remains a possibility if the Fed loses control.
• Gold is looking good, a few technical levels to overcome remain.
• The concept of sound money is still mostly unknown in the world.
• Precious metals have many upsides.

Lawrence W. Lepard is the Founder and Managing Partner of Equity Management Associates. He has spent his entire 38-year career as an investor, principally focusing on venture capital opportunities. Before co-founding EMA, Mr. Lepard spent 13 years at Geocapital Partners, in Fort Lee, NJ. There he was one of two Managing General Partners and was responsible for several venture capital funds. Before Geocapital, Mr. Lepard spent seven years at Summit Partners in Boston and California, where he was a General Partner in Summit I and Summit II.

Mr. Lepard received his BA in Economics from Colgate University, and he received an MBA with Academic Distinction from Harvard Business School.

Disclosure: None.

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