Lyle has been in the investment business for over 23 years.
Prior to founding Red Barn Capital Inc. in 2002, Lyle was a Managing Director at Sceptre Investment Counsel Ltd. where he held various investment management and executive positions over the ten-year period 1992 – 2001. As a Canadian equity portfolio manager, he developed broad industry expertise in areas such as mining, chemicals, transportation, technology, utilities, communications and conglomerates.
From 1993 to 2001, Lyle was the lead manager of the Sceptre Balanced Growth Fund, which in 1996 and in 1997 was voted Canada’s #1 Balanced Mutual Fund.
From 1988 to 1992, Lyle was Portfolio Strategist at Nesbitt Thomson Inc., responsible for selecting the investment firm’s Top 15 stocks, as well as Nesbitt’s recommended asset mix, sector strategy and overall market outlook.
In 1991 and 1992, Brendan Woods International ranked Lyle as Canada’s #1 Portfolio Strategist in a survey of buy-side managers
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Q) Mr. Stein, with gold remaining steady above the $700/oz price what are your thoughts on gold and gold stocks moving forward? Also, where are you currently finding the most value among gold stocks – large cap producers, mid cap producers, small cap producers or explorers?
A) I hate predicting the gold price, but as long as the US Dollar is going down, gold is going higher. I believe it will go to $1,000 over the next 3-4 years. Wheat is $8, Oil is $80, why not gold at $800. I like the liquidity of big cap names because if gold goes up and liquidity chases stocks then big caps go up. An old investment adage – when a strong wind blows, even a turkey flies – applies here. If gold goes to $1000 and Barrick only doubles while a smaller stock trebles, do I really care? I like the explorers for their leverage; buy cheap ounces using an oz/share metric.
Q) I was wondering if you could please summarize in a few sentences, your current views on base metal stocks and the outlook for them moving forward.
A) Base metal stocks are ok. The companies are great, but the stocks may be a bit ahead of themselves. With Falconbridge (FL), Inco (N) and Alcan (AL) being taken over, there is a premium being paid for the intermediates based on takeovers. I don’t find that to be in gold stocks, so I like them better today.
Q) What are your current views regarding crude oil markets (which have been hitting new highs recently) and natural gas (which has been groveling in the doldrums of late)?
A) There is a huge disparity with oil vs. gas. The traditional 6x multiple between oil and gas prices is more like 11-12x. Oil is risky and is given a high war premium. Gas is a great long term investment, but take your time investing here as the near term looks dicey.
Q) If possible can you please highlight your outlook for equity markets in Canada and the Canadian Dollar moving forward?
A) Don’t forecast the market; I have enough trouble picking stocks that I think I know something about. Generally, my market view is bearish. Predicitng the movments of the Canadian Dollar is a mugs game. It will go counter to the US Dollar and with oil. The US Dollar is going down and oil is tough to call. Bias would then be for a higher Canadian Dollar. Getting a trend right here is much more important than the level.
Thank You Mr. Stein!
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