How 'Gold Landlord' EB Tucker Would Spend a $10 Million Windfall

 

Fortune often goes to those wise enough to see when an opportunity is presenting itself, however it is usually in retrospect that most people realize there was an opportunity. I have one story of missed opportunity but I may be able to redeem myself with the Gold Landlord.

It was the end of the Gold and Silver Summit in San Francisco and I was feeling pretty wiped from two days of meetings and at this point, I was packing up and looking to go home when a young guy in a suit came by the booth to ask me about what I do. So I stand up and deliver my sales pitch about finding and writing about early stage companies in the mining sector. He presented to me his card...Metalla Royalties, Brett Heath, President and CEO.

He said he would be interested in maybe working with me so I took his card and said that I would follow up with him in a couple of days, this was back in October. Well, the card stayed in my suit pocket for the next couple of months and I completely forgot about it until yesterday when I was asked to meet someone named E.B. Tucker, affectionately referred to as the landlord of gold.

When I met E.B. at a coffee shop just around the corner from the Pan Pacific in Vancouver, he said he was working on a company, Metalla Royalties. Immediately, I put my palm to my forehead in disbelief that I had heard about the company and had ignored it, because it had come across my desk a couple of weeks before because they had already announced a dividend policy, a rare thing for an early stage company and I forgot to follow up with Brett.

Nonetheless, this time I was determined to get to the bottom of this story and the people behind this company because, opportunity rarely knocks twice. So I punched in his name into google and found this bio on the Metalla Royalty website...

"Mr. Tucker writes The Casey Report, a monthly investment advisory founded by legendary resource speculator Doug Casey. Prior to joining Casey, he served as the analyst and lead analyst on Stansberry's Investment Advisory and The Bill Bonner Letter respectively. Before joining Stansberry, Mr. Tucker was a founding partner of KSIR Capital Management; an asset management firm focused on precious metal equities. He also co-founded KSIR Capital, a corporate finance advisory firm focused on the precious metals industry. He holds a B.Sc. in Business Administration with a focus in Finance from the College of Charleston in Charleston, South Carolina."

I realized that E.B. Tucker had a similar interest in finance and publishing as me and I wanted to know about his experience. He enthusiastically answered my questions with a great story and insights about his views on investing in the gold and silver space. 

The following are some excerpts from the conversation we had...

How would you invest a $10 million windfall today?

I believe you only have to get rich once in life. Most people would say a $10-million windfall meets the definition of rich. Invested wisely $10 million can provide income and continue to grow. That means you don't take the $10 million and bet it all on red. I'd suggest 5% into physical gold bullion & coins, 20% into blue chip stocks (non-resource stocks) 30% into income producing real estate, 20% into equity investments in private companies as opportunities emerge, 20% cash and 5% speculative stocks through private placements. 5% to speculate might not sound like much but that's $500,000. Remember....a good speculation gives you the chance to turn 1% of your portfolio into 10%, people get these numbers mixed up somehow and often turn 10% into 1%. Do that enough and you'll need another windfall.

When you were a kid what did you want to be when you grew up?

I wanted to be my grandfather. He was still to this day the best income investor I've ever known. As a kid I was watched him use his letter opener to cut open envelopes and pull checks out. I couldn't believe people just sent him money in the mail. He had land leases, real estate and a great stock portfolio he built over years. He took me to my first public company annual meeting. It was a life insurance company he bought shares in as a mid-sized firm and held through several acquisitions. I watched him tell the outgoing company CEO how he found the company when it was small and watched his stake grow. He taught me if you want to harvest big gains you have to pick the right management team in the right business and let them work and over time they will build incredible value. Incidentally, he read my first newsletter issue at Stansberry the night before he died, this was a fitting end to our wonderful relationship)

Why did you enter financial publishing?

I started writing a blog because I had things to say. I made almost no money, but I liked having a platform for my ideas. I talked a lot about gold. The blog work led me to a gold conference in New York where I met Brett Heath. We became friends. A year later we launched a precious metals equity fund together. We ran that until 2013 when I went to work for Porter Stansberry. Today Brett is the CEO of Metalla and an emerging titan in the gold royalty business.

What have u learned about living well from Doug Casey?

Doug taught me the importance of having balance in my financial life. In a bull market some people forget to take a little money off the table and do something for yourself. I recently bought a 100-year-old rug for my office. I love it. It changed the way my office feels. There's no sense in living like a Spartan. Someday we'll be in another bear market. I'll have plenty of time to sit in my office reading and enjoying my rug.

What have you learned about marketing from Porter Stansberry?

Porter Stansberry is the world's best storyteller. He taught me that most people can't remember anything they learned a week ago....but when you bring a story to life, they remember it forever. Marketing is everywhere, but when it's woven into a story you persuade people without making them feel sold.

Why are these people mentoring you?

Some people are good writers, some people are good stock analysts. It's tough to find people who do both well. My guess is Porter and Doug saw I had the basic skills to give it a shot and that's why they invested time into mentoring me. They're still mentors by the way and I hope we're not done growing together.

Why is your mining royalty startup Metalla compelling today from a fundamental perspective?

In the gold bull market of the 1970s or the 1930s mining firms paid huge cash dividends. You don't see that anymore. Metalla has a monthly cash dividend. It's target payout ratio is 50 percent of operating cash flow. That means every shareholder has a beneficial interest in gold and silver royalties. I don't know of any other company that offers this type of direct exposure to gold and silver.

Name a guilty pleasure:

Stephanie takes me to get a pedicure about once a month and I absolutely love it. It's so relaxing, and it's completely out of character for me.

How do you want to be remembered?

People have pretty short memories...so I don't hold out much hope that I'll be known for much. Maybe they'll think of me and understand that I helped shape Metalla into the company I was always looking for and never could find. If it does what I think it can do, shareholders will do very very well. That will leave a positive mark on thousands of average people's lives. That's not a bad legacy.

About Metalla

Metalla is a precious metals royalty and streaming company that trades under the ticker symbol "MTA" in Canada and MTAFF in the United States. Metalla provides shareholders with leveraged precious metal exposure through a diversified portfolio of royalties and streams. Our strong foundation of current and future cash generating asset base, combined with an experienced team gives Metalla a path to become one of the leading gold and silver companies for the next commodities cycle. http://www.metallaroyalty.com/