But I would say that were the Congress to ban ownership by pension funds and commodities, Midas Funds would be shorting those commodities, and we think we’d make a lot of money for our stockholders.

Norman: Oh, so you go both ways? You’re not just a long-only approach to commodities; you play both sides of the market?

Winmill: The nature of commodities is that it’s very volatile, and investors should limit their own personal investment to no more than 5 to 10%; that’s what our story is at Midas Funds. But at the same time, when things get way overdone, we take a view on that - we look at the fundamental characteristics of that commodity, that resource, and make a decision in order to optimize returns for Midas Funds’ stockholders.

Norman: Now when you talk about fundamentals, there are folks out there now who say one of the big fundamentals is monetary policy, the Federal Reserve, the exchange value of the U.S. dollar. It seems more like you focus on, “Hey, this particular company, it’s my operation, what sort of a profit is it going to return?” But what about those macro factors, those monetary policy factors? Does that come into play in your decision-making process?

Winmill: It certainly does come into play, Mike, and partly in the way we allocate the funds. So right now one of our favorite allocations is the platinum mining companies. Platinum - currently the worldwide demand is about 7 million ounces - there’s only about 6.5 million ounces produced worldwide; 80% of that comes from South Africa, and the demand for platinum primarily is in diesel auto catalytic converters.
In other words, every diesel engine that’s put into service - including some off-road vehicles like bulldozers - start to require more admissions controls, and that’s where platinum comes into play: more demand on the horizon for platinum, higher platinum prices, great returns for our platinum mining companies.

Norman: It factors in with the whole entire theme of reducing carbon emissions and all that, and alternative energy … the new technology in cars, as we all know. Overall now, where are we? This rally has been ongoing now for the past six years. A lot of investors just seeming to wake up to this … although it’s sort of long. Do you think it’s near the latter stages or is there a lot more to go?

Winmill: I think there’s more to go. I’d say we’re in the fifth or sixth inning of a nine-inning game, mostly because the commodity cycles are long. It takes now about 10 to 12 years from finding a deposit, getting through the permitting process, financing and making a stockholder money.

Norman: All right, so we’re in the fifth or the sixth inning. You heard it here. Tom, thanks very much for joining us on the show; I appreciate it. Folks, see you for now. This is Mike Norman. Stay tuned right here to HardAssetsInvestor.com.