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Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

Why This Billionaire Just Bought Gold for the First Time in His Life
January 23, 2019

Sam Zell buys gold for the first time in his life

Billionaire Sam Zell just announced that he bought gold for the very first time in his life because, as he puts it, “it is a good hedge.” In a recent Bloomberg interview, the Equity International founder and creator of the real estate investment trust (REIT) admitted to seeing an opportunity in gold’s increasing supply shortage.

“For the first time in my life, I bought gold because it is a good hedge,” Zell, 77, told Bloomberg. “Supply is shrinking, and that is going to have a positive impact on the price.”

He added:

“The amount of capital being put into gold mines is at most nonexistent. All of the money is being used to buy up rivals.”

I believe Zell’s reasons for investing in gold are sound, and I’ve discussed them in detail a number of times before. Supply is indeed shrinking. The “low-hanging fruit” has likely already been mined, and it’s become prohibitively expensive for many companies to look for large-scale deposits, to say nothing of developing them. As you can see below, the number of ounces in major discoveries has been falling for years, and exploration budgets are still far below the 2012 peak.

The amount of gold in major discoveries has been trending down for years
click to enlarge

We Believe Supply-Demand Fundamentals Look Constructive

As if to confirm Zell’s reasoning, the Canadian Imperial Bank of Commerce (CIBC) forecast in a report this week that a gold deficit will emerge in 2019 “on the back of stronger demand over the next two years, primarily  from bar hoarding, net central bank buying and exchange-traded products (ETFs).” Peak production, according to the bank, will occur in 2021 at close to 34 million ounces, but then decline to under 16 million ounces by 2030.

World gold supply is expected to peak in 2021
click to enlarge

Demand isn’t abating, though. We’re seeing appetite grow for the precious metal, not just from investors but also central banks, which have been net buyers since 2010. According to CIBC, several central banks stepped back into the market last year, most notably the Reserve Bank of India (RBI), which until recently “has expressed negative sentiment around gold purchases.”

CIBC raised its gold price forecast this year to $1,350 an ounce, up from $1,300. The bank is also looking for $1,400 an ounce in 2020.

But These Gold Miners Could Be Even More Effective as a Store of Value

As attractive as I think gold bullion looks right now, there could be some incredible opportunities in gold equities, which are extremely discounted compared to the S&P 500 Index.

Among CIBC’s favorite gold equities are Agnico Eagle, Wheaton Precious Metals, B2Gold and SSR Mining—all of which we own in either our Gold and Precious Metals Fund (USERX) or World Precious Minerals Fund (UNWPX).

And in an article dated January 22, Bloomberg analysts David Stringer, Ranjeetha Pakiam and Danielle Bochove point out that a good place to look for gold equities could be mid-sized producers, which have outperformed both bullion and the entire global mining industry. For the 12-month period as of January 18, four miners in particular—Kirkland Lake Gold, Northern Star, Evolution and OceanaGold—all posted double-digit performance. By contrast, the Bloomberg World Mining Index was down more than 20 percent.

Gold producers the top performers in the Bloomberg mining index
click to enlarge

Northern Star, one of the top holdings in USERX as of December 31, was up 54 percent for the 12-month period. The Australian producer had a phenomenal fiscal year 2018, with net profit up a respectable 3 percent even as the price of gold was in decline. Dividend payouts were raised 6 percent. And the company continues to carry no debt.

Consolidation in the Goldfields

Sam Zell’s other point—about miners allocating their capital not to projects right now but to acquisitions—is also well-made. Indeed, industry consolidation is beginning to happen, which could possibly signal that the industry has found a bottom. Back in September, mining giants Barrick Gold and Randgold Resources announced a deal worth $6.5 billion, making the world’s largest gold producer by annual output. That record will stand for only four months, as Newmont Mining just made public its own plan to buy rival Goldcorp for $10 billion.

The next deal to surface could be nearly as large. It’s now rumored that South African producers Gold Fields and AngloGold Ashanti are interested in merging. Although the rumor has not yet been confirmed, Gold Fields CEO Nick Holland said in an interview this month that “if you are going to survive in the long term, you are going to have to look at consolidation.”

With combined output of 6 million ounces in 2017, a Gold Fields-AngloGold merger would create the world’s third largest producer after Newmont-Goldcorp (7.9 million ounces) and New Barrick (6.6 million ounces).

Gold Fields, which we own in the Gold and Precious Metals Fund (USERX), was up as much as 4.19 percent in New York trading on Tuesday on the news. From its 52-week low in September, the South African company has now risen a remarkable 78 percent.

Curious to see what other companies round out the Gold and Precious Metals Fund and World Precious Minerals Fund’s top 10 holdings? Learn more by clicking here!

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.

Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in these sectors.

A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, hotels and timberlands.

The S&P 500 Index (Standard & Poor's 500 Index) is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value, The index is widely regarded as the best single gauge of large-cap U.S. equities.

There is no guarantee that the issuers of any securities will declare dividends in the future or that, if declared, will remain at current levels or increase over time.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Gold and Precious Metals Fund and World Precious Minerals Fund as a percentage of net assets as of 12/31/2018: Agnico Eagle Mines Ltd. 1.65% in Gold and Precious Metals Fund, 0.00% in World Precious Minerals Fund; Wheaton Precious Metals Corp. 2.50% in Gold and Precious Metals Fund, 0.20% in World Precious Minerals Fund; B2Gold Corp. 0.51% in Gold and Precious Metals Fund, 0.00% in World Precious Minerals Fund; SSR Mining Inc. 2.82% in Gold and Precious Metals Fund, 0.00% in World Precious Minerals Fund; Kirkland Lake Gold Ltd. 0.00% in Gold and Precious Metals Fund and World Precious Minerals Fund; Northern Star Resources Ltd. 4.56% in Gold and Precious Metals Fund, 0.00% in World Precious Minerals Fund; Evolution Mining Ltd. 0.00% in Gold and Precious Metals Fund and World Precious Minerals Fund; OceanaGold Corp. 0.00% in Gold and Precious Metals Fund, 0.03% in World Precious Minerals Fund; Gold Fields Ltd. 1.03% in Gold and Precious Metals, 0.00% in World Precious Minerals Fund; AngloGold Ashanti Ltd. 0.00% in Gold and Precious Metals Fund and World Precious Minerals Fund. Barrick Gold Corp. 0.00% in Gold and Precious Metals Fund and World Precious Minerals Fund; Newmont Mining Corp. 1.01% in Gold and Precious Metals Fund and World Precious Minerals Fund.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

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Here's Why the Price of Palladium Just Zoomed Past Gold
January 22, 2019

EPalladium Strengthens on increased demand from automobile manufactures

Palladium might not fill headlines the way gold does, but it’s been on fire lately. Not only has the precious metal been the best performing commodity for two years straight, but its price also just shot past gold for the first time since 2001. For the first time ever, it broke through $1,400 an ounce last week before pulling back somewhat. From its 52-week low set in August, palladium has climbed almost 70 percent. It’s added about 16 percent in the past 30 trading days alone.

Shares of North American Palladium have surged on greater demand
click to enlarge

Supply is tight, but like many other things, we largely have government policy to thank for the palladium rally. In this case, I’m talking specifically about governments in Europe, which have recently strengthened their vehicle emission standards. The “Euro standard,” as it’s called, classifies vehicles on a scale from one to six, with one being the most polluting and six being the least polluting.

Some European cities have already banned the dirtiest “Euro 1” vehicles from their streets. Old diesel cars and trucks were outlawed in Brussels effective January 2018. In May 2018, Hamburg became the first German city to do the same.

Diesel Engines in the Crosshairs

But now that it’s a new year, some city governments are escalating the ban to include Euro 2 automobiles that run on diesel. Next month, Frankfurt—Germany’s financial hub—will go so far as to ban all Euro 4-and-worse diesel vehicles, and all Euro 1 and 2 gasoline-burning vehicles.

I believe this escalation was prompted in part by a comment made by Elzbieta Bienkowska, a European commissioner whose responsibilities include oversight of industry and entrepreneurship. Speaking to Bloomberg in May, she said that “diesel cars are finished.”

Diesel vehicle sales continue to plunge in Europe

And then, as if to hasten Bienkowska’s prediction, a damning study on diesel engines was issued in June by the very same group that blew the whistle on Volkswagen’s emissions scandal back in 2015. According to the study, conducted by the International Council on Clean Transportation (ICCT), even the newest, cleanest diesel vehicles failed to meet Europe’s strict emission standards in “real world” driving conditions. Peter Mock, the ICCT’s managing director, defended the report, saying that “pretty much all Euro 6 diesels on the market are not clean.”

European sentiment of diesel was already in freefall, but momentum is increasing. In the first half of 2018, sales of diesel vehicles within the European Union (EU) and European Free Trade Association (EFTA) fell more than 16 percent compared to the same period in 2017. For all of 2018, British sales of diesels were down nearly 30 percent, according to the Society of Motor Manufacturers and Traders (SMMT). Between 2016 to 2018, diesel’s share of new vehicle sales in the EU plunged dramatically, from nearly half of all sales to just under a third.

Palladium Has Been the Beneficiary

So what does all of this have to do with palladium? The metal, as you probably know, is used in the production of catalytic converters, which “scrub” pollutants from the exhaust of internal combustion engines. And because of Europe’s enforcement of strict new standards, demand for these devices is surging, along with palladium itself.

Demand is so high, in fact, that there are now reports, in the U.K. and U.S., of thieves stealing catalytic converters, sometimes in broad daylight, to extract the precious metal. On Thursday, it traded as high as $1,434.50, according to CNBC.

Supply Worries Have Remained High

There’s more to the story of palladium’s bull run. For the past several years, supply has been in deficit. That’s mostly because around 80 percent of all palladium (and platinum) production is concentrated in two countries—South Africa and Russia. The geopolitical risks are high. When South African laborers went on strike in 2014, all production of the platinum metals, including palladium, grinded to a halt. 

Where is palladium mined
click to enlarge

Besides supply issues, the biggest risk facing palladium right now is substitution risk. With palladium trading above $1,400 an ounce, how long will it be before auto manufacturers switch to its sister metal, platinum, which is currently trading at around $800 an ounce?

In the meantime, there could be money to be made.

A Palladium Miner With Incredible 87 Percent Income Growth

One of our favorite ways to play the rally is North American Palladium. The company, headquartered in Toronto, mines both palladium and gold (and other metals as a byproduct), and has seen quite a rally itself on higher metal prices. For the 24-month period, its shares are up a remarkable 120 percent.

Trading places palladium overtook gold again
click to enlarge

North American Palladium had a phenomenal third quarter in 2018. According to results, income after taxes and expenses was $22.9 million, up a whopping 87.7 percent from $12.2 million during the same period the previous year. That translated to earnings per share (EPS) of $0.39, up from $0.21 in 2017. I’m eagerly awaiting the company’s results for the fourth quarter!

Stay up-to-date on this potential trend by subscribing to our FREE, award-winning Investor Alert!

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of 12/31/2018: North American Palladium Ltd.

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The Newmont-Goldcorp Deal Is Positive News for Gold Mining
January 15, 2019

The Newmont-Goldcorp Deal Is Positive News for Gold Mining

Consolidation season has finally arrived in the goldfields, just as many experts and analysts have been predicting for some time now. With exploration budgets having been slashed since their 2012 peak, and because there are today fewer and fewer ounces of gold available to be mined, one way forward for producers of all sizes will be to ramp up mergers and acquisitions (M&A) activity.

You might have heard that Newmont Mining will be buying Goldcorp in a massive $10 billion deal. The resultant company, to be headquartered in Denver, will be the world’s largest gold producer by number of ounces mined—larger even than what’s being called “New Barrick,” after the $6.5 billion merger of industry giants Barrick Gold and Randgold Resources, announced back in September. Whereas Barrick-Randgold produced a combined 6.6 million ounces of gold in 2017, Newmont-Goldcorp was responsible for as much as nearly 8 million ounces.

The Newmont Gold Corp deal will create the worlds largest gold producer
click to enlarge

I see this news as positive overall for the metals and mining industry, which has long signaled the need for consolidation. As I explained in a Frank Talk Live segment back in October, it’s when an industry has found a bottom that you start to see big M&A deals. A couple of years ago, the very talented people at Visual Capitalist showed in an infographic that mining M&As peaked in the aftermath of the financial crisis.

A Positive Case Study in M&As: Domestic Airlines

This tacit rule applies not just to metals and mining but also to most other industries. Look at domestic airlines. It’s easy to forget now that between 2005 and 2008, more than two-thirds of U.S. airlines were operating under Chapter 11 bankruptcy protection. A huge wave of consolidation followed, giving us the “big four” carriers—Delta, American, United and Southwest. Profits surged to new highs. This year, according to the International Air Transport Association (IATA), global airlines should see their 10th straight year of profitability, and fifth straight year where “airlines deliver a return on capital that exceeds the industry’s cost of capital, creating value for its investors.”

Consolidation Could Speed Up the Closer We Get to “Peak Gold”

So will gold miners follow suit and consolidate (more so than they already are)? And will this lead to a similarly sustained period of outstanding profitability?

No one can say for sure, of course, but my guess is that we’ll continue to see more and more deals the closer we get to the idea of “peak gold.” As I’ve shared with you before, the yellow metal is getting exponentially more difficult and costly to mine. The “low-hanging fruit” has likely already been plucked, so to speak. Exploration budgets have been slashed, and the days of 20- and 30-million-ounce gold deposits could be behind us, to say nothing of 50-million-ounce discoveries.

The amount of gold in major discoveries has been trending down for years
click to enlarge

To replenish their own reserves, big-name miners such as New Barrick and Newmont might decide to absorb smaller-cap junior producers with provable mines instead of spend higher and higher costs to scour the world for progressively harder-to-find deposits.

Says Michael Siperco of Macquarie Research, the Barrick-Randgold and Newmont-Goldcorp deals could “spark a wider consolidation in the industry, where too many gold companies are chasing too few assets.”

Only time will tell if this happens. I’ll be curious to see what companies could be next to strike a deal!

Stay up-to-date on this potential trend by subscribing to our FREE, award-winning Investor Alert!

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of 12/31/2018: Newmont Mining Corp., Barrick Gold Corp., Newcrest Mining Ltd., American Airlines Group Inc., Delta Air Lines Inc., United Continental Holdings Inc., Southwest Airlines Co.

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Gold and Commodities Set to Soar in 2019
January 14, 2019

Summary:

  • An update to the Periodic Table of Commodity Returns.
  • Goldman Sachs issues an overweight recommendation for gold and commodities.
  • Paradigm Capital says royalty companies are the “best bet” in metals and mining.

Our ever-popular Periodic Table of Commodity Returns has been updated for 2018 and is now available on the U.S. Global Investors website! I invite you to get lost using the interactive feature, which easily allows you to highlight a certain commodity, the top performer, the most volatile and more.

Explore the new periodic table of commodity returns 2018

Palladium was the best performing commodity for the second year in a row, returning 18.59 percent in 2018 after ending the previous year up a phenomenal 56.25 percent. As we’ve noted before in the Investor Alert and elsewhere, palladium and gold prices are now near parity, with a razor-thin spread of only around $2 separating the two at the moment. Late last year, the white metal actually overtook the yellow metal for the first time since 2001 on increased demand from automobile manufacturers. More than 80 percent of world supply is used in the production of catalytic converters.

Not to be outdone, gold ended 2018 on a high note, beating global equities and commodities for the fourth quarter. And as I mentioned before, it was the sixth most liquid asset class, with daily trading volumes nearly identical to that of S&P 500 companies.

Goldman Bullish on Gold, Forecasts $1,425

With a majority of investors now betting that the current rate hike cycle has peaked, the U.S. dollar looks to be in retreat, having lost about 1.7 percent over the past month. Mike McGlone, commodity strategist at Bloomberg Intelligence, writes that he believes the “2019 dollar downtrend has legs.” This is constructive for metals and commodities in general, gold specifically. On Friday, in fact, the yellow metal achieved a “golden cross,” whereby the 50-day moving average crosses above the 200-day moving average—a very bullish sign.

Gold Achieves a Golden Cross
click to enlarge

Among those that are most bullish on the precious metal is Goldman Sachs. In a report last week, the investment bank maintained its overweight recommendation and raised its 12-month price forecast up from $1,350 an ounce to $1,425, a level last seen in August 2013. Goldman analysts contend that the gold price “will be supported primarily by growing demand for defensive assets, with a slower pace of Fed rate hikes in 2019 boosting demand only marginally.”

The World Gold Council (WGC) made a similar case in its 2019 outlook last week, predicting that global investors will “continue to favor gold as an effective diversifier and hedge against systemic risk.” The rise in protectionist policies around the world is chief among the risks since they tend to lead to higher inflation and slower economic growth over the long term, according to the WGC.

I believe the current government shutdown, over funding for a wall along the southern border, is evidence of the risks protectionist policies pose. Now the longest in U.S. history, and with no end in sight, the shutdown could start to take a toll on the economy the longer it lasts, according to Federal Reserve Chair Jerome Powell, and perhaps even cost the U.S. its triple-A credit rating.

Commodities Could Also Be a Buy Right Now

Goldman Sachs isn’t just bullish on gold. Commodities also look like a strong buy, the bank’s analysts say, after prices were slashed late last year. Before the fourth quarter, commodities were following the “late-cycle playbook.” Up 16 percent, they were the best performing asset class of 2018. But with the Fed now “on hold” and there being “low risk” of a recession, Goldman says it can now argue “with confidence” that the sell-off last year was a “mid-cycle pause.”

This is actually good news for commodities, as mid-cycle pauses have historically been a buying opportunity. Look at the chart below. It shows that, with few exceptions, commodity prices rallied in the days and weeks following a “pause” signal from the Federal Open Market Committee (FOMC). And as you might already know, Powell recently commented that the Fed “can afford to be patient” and “flexible” when it comes to additional rate hikes.    

Mid-Cycle Pauses Have Historically Been a Buy Signal for Commodities
click to enlarge

Goldman maintains an overweight recommendation for commodities, with a 12-month forecast of 9.5 percent.

Gold Royalty Companies Are the “Best Bet,” Says Paradigm Capital

It’s no secret that I’m a fan of royalty and streaming companies. (You can read my posts featuring Franco-Nevada and Wheaton Precious Metals.) I’ve long admired these companies for generating profits and creating value, even when the metals market is flat or weak.

Last week, Paradigm Capital reaffirmed my conviction in the royalty model. The Canadian investment dealer shared its research into the long-term performance of the various tiers in gold mining, from juniors to seniors, from explorers to developers. The royalty companies—which include not just Franco and Wheaton but also Royal Gold, Sandstorm and Osisko Royalties—are the “best bet” when seeking to “make money in gold equities,” according to Paradigm’s senior analyst, Don MacLean. He adds: “Royalty companies have the best business model in the sector, by far.”

Below, you can see that royalty companies have outperformed all other tiers, including gold itself. They collectively delivered 16 percent in compound annual growth from 2004 to 2018. Put another way, they returned a massive 884 percent in cumulative change, compared to gold at 300 percent.

Gold Royalty Companies Have Outperformed All Other Tiers Since 2004
click to enlarge

Many junior and senior producers have struggled over the same time period, but Paradigm writes that gold equities are like “coiled springs” and should outperform the precious metal if a “meaningful” gold rally of 10 percent or more occurs. Right now large-cap seniors are leading the rally, having increased 24 percent over the past three months, followed by intermediates (up 18 percent) and royalty companies (up 15 percent). This is in line with past gold equity rallies, Paradigm says, as the largest producers have historically performed best at the start.

My focus lately has been on how the idea of “peak gold” might drive the need for mergers and acquisitions (M&As) within the metals and mining industry. It’s been almost a decade since the last round of deals, and because there’s a sore lack of big discoveries right now to replenish reserves, I feel as if we’re due for more M&A activity this year. The Barrick Gold-Randgold merger, announced last September, might have been just the start of a new wave of consolidation.

We learned just today, in fact, that Newmont Mining plans to buy Goldcorp for a reported $10 billion, thereby making the world’s biggest gold producer. Look for my thoughts on this later!

On a final note, our very own Ralph Aldis, precious metals expert and portfolio manager, shared his top stock pick for 2019 with MoneyShow. To find out which one it is, click here!

 

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The S&P GSCI Total Return Index in USD is widely recognized as the leading measure of general commodity price movements and inflation in the world economy. Index is calculated primarily on a world production weighted basis, comprised of the principal physical commodities futures contracts.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of 12/31/2018: Franco-Nevada Corp., Wheaton Precious Metals Corp., Royal Gold Inc., Osisko Gold Royalties Inc., Sandstorm Gold Ltd., Newmont Mining Corp., Barrick Gold Corp. 

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These Are the Five Wealthiest Self-Made Texans
January 9, 2019

Mark Cuban
Photo: JD Lasica / Social Media.biz | Creative Commons Attribution 2.0 Generic

A couple of months ago, Forbes updated its list of the wealthiest 400 Americans for 2018, with Jeff Bezos appearing at number one for the very first time. Worth some $160 billion, the Amazon founder and CEO finally dethroned Bill Gates, who had held the top spot for a remarkable 24 years straight.

I was particularly interested in learning about the Texans who made the list, including Mark Cuban, Ross Perot, Paul Mitchell-founder John Paul DeJoria, Lewis Energy CEO Rod Lewis and more. I’ve shared with you before my belief that, thanks largely to low taxes and reasonable regulations, there’s no better place in the U.S. to do business than Texas, the home state of U.S. Global Investors. Texas ended up with 38 billionaires on Forbes’ list in 2018, four more than it did the previous year. That’s also the third most of any state, following California (84 billionaires) and New York (73 billionaires). The wealthiest Texan on the list, and 12th richest American overall, was Walmart heiress Alice Walton, worth an estimated $44.9.

But I wanted to know which of those Texans were self-made, unlike Walton. To exclude those whose fortunes were mostly inherited, I cross referenced Forbes’ findings with the Bloomberg Billionaires Index, which measures people on how they make their money. This ruled out individuals like Walton and a few others.

So below is the countdown of the five wealthiest self-made Texans, beginning with number five.

5. Robert Rowling ($5.8 billion)

Robert Rowling is the chairman and owner of Dallas-based TRT Holdings, which holds recognizable brands such as Omni Hotels & Resorts and Gold’s Gym. It also holds the company founded by Rowling’s geologist father, Tana Exploration, which is where he initially made his extraordinary wealth. A Corpus Christi native, the media-shy 65-year-old now lives in Dallas. He and his wife have made significant donations to the University of Texas at Austin and support conservative political causes and candidates.

4. Richard Kinder ($6.6 billion)

Next on our list is Richard Kinder, who made his vast fortune in the oilfields. In 1997 he cofounded the company he’s best known for, Kinder Morgan, which owns and operates tens of thousands of miles of oil and gas pipelines throughout North America. Before that, Kinder served as president and chief operating officer of Enron, the ill-fated energy company that, in 2001, declared bankruptcy after being caught in perhaps the most notorious accounting fraud scheme in U.S. history. Kinder, 74, stepped down as CEO of Houston-based Kinder Morgan in 2015 but remains its executive chairman and largest shareholder.

3. Jerry Jones ($6.9 billion)

Jerry Jones
Photo: flickr/Keith Allison | Creative Commons Attribution-ShareAlike 2.0 Generic

Last year marked the 30th anniversary of Jerry Jones’ $140 million purchase of the Dallas Cowboys. Under his leadership, the Cowboys have been the most valuable team in the National Football League (NFL) for over a decade now, worth some $5 billion in 2018, according to Forbes. The 76-year-old Jones’ latest purchase? A “mega-yacht” measuring 360 feet long—about the same size as a football field—that features two helipads and a garage for water vehicles. The yacht’s reported price tag, $250 million, is over $100 million more than what Jones originally bought the Cowboys for. 

2. Andrew Beal ($9.9 billion)

Although not a household name, Andrew Beal is one of the more fascinating individuals on this list. A true self-made billionaire, Beal dropped out of Baylor University and even had a job for a time fixing broken TVs. At the age of 19 he began buying distressed properties, renovating them and selling them for a large profit. In 1988 he founded Beal Bank, headquartered in Plano, Texas, which specializes in purchasing undervalued real estate and savings and loan assets. The firm, of which the Dallas-based Beal owns 96 percent, held close to $8 billion in total assets as of September 2018. What sets the 65-year-old Beal apart from the others on this list is that he’s also an amateur mathematician and highly gifted poker player. The eponymous “Beal conjecture” math problem, formulated by the billionaire in 1993, is as-yet unsolved, and in 2004, he won one of the largest single hands of poker in Las Vegas history, totaling $11.7 million.

1. Michael Dell ($27.6 billion)

Michael Dell
Photo: Hartmann Studios | Creative Commons Attribution 2.0 Generic

And here we are at number one. The wealthiest self-made Texan, and the 39th richest person in the U.S., is Michael Dell, who, in 1984, founded his computer company in his University of Texas at Austin dorm room at the age of 19. According to an interview with NPR, Dell said that one of the things he noticed about the computer business at the time was that it was “very inefficient.” He added: “It took a really long time for the technology to get from the people that made it to the people that were buying it.” Interestingly, one of his earliest customers was fellow Texan and future self-made billionaire Mark Cuban, who bought some hard drives from Dell for his budding software company, MicroSolutions. Four years after the Round Rock, Texas-based Dell Computer went public in 1988, Dell became the youngest CEO of a Fortune 500 company. The company went private in 2013 but, a little more than five years later, is seeking to go public again. The move has set up a legal fight with activist investor Carl Icahn, who filed a lawsuit against the computer company late last year for allegedly withholding “material information.” It was revealed last year that Dell, 53, was the mystery buyer of a $100.47 million Manhattan penthouse in 2014, making it the highest price ever paid for a New York City residence.

Interested in reading more? Check out 10 Living, Self-Made American Billionaires.

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The Forbes 400 or 400 Richest Americans is a list published by Forbes magazine of the wealthiest 400 American residents, ranked by net worth. The 400 was started by Malcolm Forbes in 1982 and the list is published annually around September. The Bloomberg Billionaires Index is a daily ranking of the world's richest people. In calculating net worth, Bloomberg News strives to provide the most transparent calculations available, and each individual billionaire profile contains a detailed analysis of how that person's fortune is tallied.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. None of the securities mentioned in the article were held by any accounts managed by U.S. Global Investors as of 9/30/2018.

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Net Asset Value
as of 03/22/2019

Global Resources Fund PSPFX $4.51 -0.07 Gold and Precious Metals Fund USERX $7.38 -0.14 World Precious Minerals Fund UNWPX $2.79 -0.04 China Region Fund USCOX $8.50 -0.19 Emerging Europe Fund EUROX $6.59 -0.16 All American Equity Fund GBTFX $23.42 -0.49 Holmes Macro Trends Fund MEGAX $16.70 -0.31 Near-Term Tax Free Fund NEARX $2.21 0.01 U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change