Ep. 10: Mark Yaxley – CEO at Strategic Wealth Preservation (SWP)

Mark: In 2014, I got a phone call. It's a customer I had done business with when I was working for Kitco Metals. And he's like, we're opening the depository in the Cayman Islands. And would you be interested in running this depository? By the end of the conversation, they're like, look, we'll pay for you to come down here. It's one week in the Cayman Islands. Again, it's February in Canada. So it's miserable. And so I'm like, yeah, like, let's do that. And so by the time I got to the airport, and I remember seeing Cayman Islands on the board, like when we were boarding the flight, and I'm like, I'm taking this job.

Tarek: Welcome to Y'all Street. Today, we speak with Mark Yaxley, the CEO and co founder of SWP depository in the Cayman Islands. Mark, would you like a cup of coffee? I sure would. I got you the special coffee mug from the Cayman Islands. Home of the depository. Coffee. Cheers. Cheers, bud.

Mark: That's pretty good.

Tarek: Yeah, after a long day at the conference, tell me about just talking all day long. So SWP depository, Cayman Islands, tell people about that. What what is what is it that you do there? Why Cayman Islands? How did it start? I'm interested.

Mark: It started in 2014. I got a phone call. I was up in Canada. So if you're wondering about the accent, anybody? Yeah, it's a Canadian accent. So get used to it. 2014 got a phone call. It was February. It's a customer I had done business with when I was working for Kitco metals.

Tarek: And which I want to get back into that at some point.

Mark: Yeah. And he's like, we're opening the depository in the Cayman Islands. And would you be interested in running this depository? And my initial answer is like, you know, I don't want to run a vault. I was a marketing guy, sales and marketing guy, product development, you know, brand positioning, you know, that's where I

Tarek: That's a pretty random question from a customer. I'm opening a depository in the Cayman Islands. I mean, it's kind of out of left field, right?

Mark: Yeah, I guess it was more of a statement than a question. The question after that was, would you like to come down and run it? And anyways, long story short, by the end of the conversation, they're like, look, we'll pay for you to come down here. It's one week in the Cayman Islands. Again, it's February in Canada. So it's miserable. And so I'm like, yeah, like, let's do that. And so by the time I got to the airport, and I remember seeing Cayman Islands on the board, like when we were boarding the flight, and I'm like, I'm taking this job. Like, all these people look really happy going there. And here I am this 35 year old guy going down to the Cayman Islands. So anyways, end up down there. It was a great week. They showed me around the island super special place really unique, beautiful beaches and clear water and everything the total opposite of where I grew up.

Tarek: It's gorgeous. Yeah, I've been there. It's magnificent.

Mark: Yeah. So the business plan that they presented was like, at a Mexican restaurant, it seemed like a napkin job. Like, you know, it was pretty, pretty simple. They're like, we need a little bit of help flushing this out. I'm like, okay, just a little. I'll give it I'll give it my best go. But long story short, we ended up opening the depository in 2015. Our business model was really simple. We're like, we're going to build this vault in Cayman for offshore storage. And we're going to rely on dealer partners like Texas Precious Metals to refer us business. So their clients are going to want offshore storage, and you know, we'll attract those clients as storage customers of SWP. And before too long, it turned into you know, what it is today, which is, you know, a depository and also a place where you can buy and sell metal. And we've expanded the model to offer 11 other locations throughout the world for our clients.

Tarek: It's impressive. I mean, so going back to the the napkin conversation, I mean, you're sitting there, you see the opportunity, you love a location, you're in the industry long enough to know that there is demand for offshore storage. People want some asset diversification, geographic diversification. Cayman has always been a destination for banking and finance and, and a safe haven, if you will. And, and you got this napkin. So how do you, how do you start the depository? How do you learn about building and operating a depository? What is that like?

Mark: Yeah, so the two partners had actually visited a few different vaults around the world before they approached me with a napkin deal. So they had been to Miami, they had been to Panama, they had been in New York City, so they had seen some pretty good operations. And so they had a good idea of what they wanted. They just didn't really understand the precious metals component. One of them was a construction guy. So he built hotels and luxury homes and the other guy was a security guy. So he ran a large security company in the Cayman Islands. So they had a great background for a vault and hence why they were interested in this business. But they didn't understand how the precious metals component, you know, worked. And when I was with Kitco, we did do storage up in Montreal. That was kind of, we were actually, you know, before Toronto was a thing, Montreal was a thing. Yeah, I'm happy to get that plug in because that's home for me. So Montreal was a thing. We had a storage program that was pretty successful. We also offered Hong Kong when Hong Kong was a place you would put gold and silver.

Tarek: Times have changed.

Mark: Times have changed.

Tarek: So the vaults in Montreal, were they owned by Kitco or did they outsource to like Brinks or Loomis or any of those?

Mark: They were outsourced to a company called Garda.

Tarek: Oh yeah, I know Garda, sure.

Mark: Yeah, so Garda had an outfit in Montreal. Brinks also had an outfit in Montreal at the time. They were also working with Kitco. So I had a little bit of experience, but honestly it wasn't like I'd never, like I said earlier, I was a sales and marketing guy. I'm like, I can sell metal, I can position metal, I can convince a client to own precious metals, but running a vault doesn't sound like a great time to me. So I was a little bit hesitant, but again, that weekend came and changed my mind. The guys were great, you know, I knew I was working with good people and that to me was ultimately what attracted me to SWP and why I jumped in.

Tarek: Generally, it's the type of business that's pretty hard to, you know, you have to build critical mass before you can generate any type of income and that requires a lot of capital up front and it requires a lot of months and years of losing money if that's the only source of income before you can start, you know, getting into the black. So can you talk about what the thinking was behind the, you know, early stages, the early days of SWP Cayman?

Mark: Yeah, again, we're talking napkin deals here. So our forecast for year one turned out to be incorrect. You know, I can say that now because we're 11 years in and obviously things have gone well enough, but at the time, you know, when you bring metal into storage, your billing starts three months after that and really you only see the benefit a year later. You know, that sticky revenue that's going to be around for a while and then you start building that mass of the scale that you need. So obviously, you have a lot of up front costs. You know, we invested a fair amount of money to get the vault up and running and I remember walking into it, Tarek, like the day that we started and it was completely empty. We had no clients. We had no brand. We had an empty vault in the Cayman Islands and for me, partly, you know, scary experience in the sense of like what if I fail, you know, I'll let these guys down. Am I really good enough to do this? But the other part of me was like my entrepreneurial side is like this is the opportunity of a lifetime. Like for a kid who grew up, you know, with a dad who's a teacher, mom's a secretary, not a business family, not a lot of money to go around. And it's like here I am in the Cayman Islands, 35 years old, recently single. This is it. And I just poured myself into it.

Tarek: And you start from the position of having a pretty big capital partner right out of the gate, which very few entrepreneurs really have. You know, a lot of entrepreneurs start with trying to, you know, scrape by with savings or raising money from, you know, friends and family. But you have a capital partner who says we're going to invest the money, we're going to build the building and building the building is, I mean, that's the moat in the depository industry. That's what the big financial hurdle is. And there just aren't a lot of people that are willing to take the financial risk to do that. So, yeah, you have this, you have all of the ingredients in the kitchen and now you just need to cook the pie.

Mark: Yeah, you're absolutely right. And you know, in retrospect, that was what differentiated this opportunity from many others was that Shane and Stew, my partners, were willing to take that risk and then bring on, you know, this kid from Canada to get the job done. And without that initial investment and that belief. Now, the good news is they knew Cayman really well. They were both born and raised or raised for, you know, Shane had been there 40 years. Stew was born there. So they knew the market. They knew how to do business in Cayman. They knew the right people. And that gave us a leg up. But yeah, it's yeah, it's a scary feeling.

Tarek: I mean, yeah, I mean, you had obviously with your experience with Kitco, you knew some people in the industry. But, you know, as you know, from experience and again, conferences like this, where the precious metals market is a very small market, you know, it's I was talking to Ed yesterday. And, you know, it's it's comprised of the bullion banks, and you have some refiners, and you have the depositories and the transport companies and the dealers. And, you know, collectively, you're not talking about a lot of people that make all the decisions to move all of the metal around the world. And so when you launch a depository, the hardest thing is the credibility piece. How do I how do I get comfortable with the people behind this operation? And for somebody to put their metal down there, they need to know that it's insured. Well, in order for it to be insured, you need everybody uses Lloyd's of London. Lloyd's of London has to get comfortable with your operation, security, and, you know, the company and so forth. So there just a lot of hurdles that you have to overcome before you even get to the marketing and even get to the customers. ERP system, you know, picking, picking the right software management system to be able to bill and account for all of the metal and all the different SKUs. And, you know, our industry, we don't have barcodes on products, like because there's no packaging. So you're getting a gold bar in here. And now you get a hand type in serial numbers and cameras and things of that nature. So yeah, walk through what was the biggest challenge and all of that?

Mark: You just named a few, you're bringing back memories. It's the biggest challenge that we faced as a young company, starting. So we had the building, credibility was huge. So in order to make a gold vault successful, whether it be back in 2014, or now, is you need liquidity. Ultimately, like, that's the difference, the difference between like a safe deposit box operation, or a business that is going to not only attract long term storage, but also the trading aspect, which, you know, you know, very well, you understand, right. So in order to do create liquidity, we're a young company, we have, you know, limited resources. At this point, we've just invested most of our capital in a building that's empty. We needed a partner. So we had to go out and attract a wholesaler at that point who is willing to take a chance on us. And again, like you said, like you're new to the industry, like nobody knows who you are.

Tarek: So just to add a little bit of context, there are a lot of depositories around the world. And I mean, some name brands like Brinks, like Loomis, that that people are familiar with, but those businesses primarily focus on the storage and the logistics of moving metal around the industry. But Brinks doesn't have a trading desk, Loomis doesn't have a trading desk. So if somebody were to store at one of those locations, what what you're saying is that the challenge is, how do I liquidate my bullion? How do I when the time comes for me to sell my gold, I somehow have to get it out of this location, wherever it is, and get it to a place that will ultimately provide me with liquidity. And you're saying, we wanted to make it so that at the facility, people who were to deposit there can also liquidate it at that location, and especially location like Cayman Islands, where it's difficult to get metal in and out. And there's customs and all kinds of other challenges.

Mark: Exactly. So you need to replicate a real market like New York or Dallas, Zurich or Singapore, that's who you're competing against, ultimately. But you're an island, situated half an hour south of Cuba, in the middle of the ocean with no real, there's no existing market, there's no gold market, like no one's ever done this before.

Tarek: There's no dealers on the island.

Mark: None of that. None of it exists. So thank God, you know, going into it with this kind of naive entrepreneurial spirit where you're like, we will just figure it out. And that's exactly what we did. It was like all those challenges that you named, including the liquidity piece, you know, that became the homework. That was the takeaway. That's like, okay, we found one wholesaler who's willing to provide capital or we found one wholesaler who's going to, you know, or at the time we were lucky, you know, in the industry, we had the OPMs of the world. We had the, so Ella Metal, we had RMC in Miami, these were private mints that were trying to really aggressively grow their business. They were also willing to park inventory down in Cayman at the time, and we turned over that inventory. And so they send more down and it allowed our clients to buy and eventually sell back to us if they wanted to. But that was a critical piece.

Tarek: I think a lot of that aggression helped you. It helped a lot of other businesses in the U.S., but it ultimately led to the downfall of those companies in one form or another. Because, you know, in our industry, it's about getting, being conservative as well. Like it's the margin of error is very small.

Mark: It is. It is. It's a miracle that you and I have made it this far.

Tarek: We have the scars to prove it.

Mark: We sure do. But that was a big challenge. The insurance piece is a big one. But that, I mean, that's just, they send their inspector, they send their risk management guys down. And when they saw the facility that we had built, because of the construction insecurity background, that was actually an easier hurdle for us to clear than the liquidity and the credibility. You know, that's the credibility. Ultimately, that's what you're going to market with, is you have to build this story around, you know, your brand, around your offering. Thankfully, the USP of the Cayman Islands is an extremely unique USP. You know, first of all, everybody's like, what is the Cayman Islands? You know, is it what Tom Cruise refers to in the movie or even any show? Like, it comes up all the time. My wife and I are watching Netflix and we're like, oh, they're talking about money laundering. Like, here it comes. Here it comes to Cayman. It's either like Cayman or Channel Islands. But most of the time it's Cayman. So that's a double edged sword in my mind. That served us well from the perspective of people are curious and those who are in the know, know it's actually a great jurisdiction to move your wealth to. And then you have those who will never bother to really look into it. And they're just like, oh, yeah, that's like sketchy or whatever. But it did help with the marketing of the business.

Tarek: So when I went down to Cayman and visited your facility, A, I was very impressed with the security. It was clear that there was a security company behind the whole operation. But that facility is not the same facility that you're in today. So talk about that. What inspired the transition from Facility A to Facility B?

Mark: Two things. Number one, COVID happened. So we were, you know, we're chugging along, you know, we grew the business, 100 million assets under management, you know, 300 million, like all those all those milestones, all those milestones, right? We used to have this whiteboard. Actually, funny enough, it was on a whiteboard. We were like, like, oh, we're here.

Tarek: So you upgraded from the napkin and you went straight to the whiteboard.

Mark: Yeah, exactly. Very technology savvy company. So anyways, we're chugging along and then COVID comes. And we were talking about this in the Uber on the way over here. And it's like life changed for precious metal dealers. Like, I would wake up in the morning and be on the phone from 7am till 6pm every day for months. And I ended up hiring my brother, my wife, my sister-in-law, like it was like emergency war room, like my basement became an office. And we expanded very quickly. Now we already had other staff. This was just like all hands on deck, because the phone is ringing, the emails are coming, everybody wants metal. So it was great for the business. So that happened. And then we were actually leasing the space and the original space was leased. And our landlord thought he was a pretty smart guy. So he's like, I'm going to give these guys short notice to get out of the building. And I'm going to keep the vault. That was his plan. He's an evil guy. He's like, I'm going to get these guys out. I'm going to keep the vault because I'll never be able to get the vault out before they leave. But he forgot that we had a partner who's a construction guy. So we basically, we buy a piece of land and came in, we built this beautiful purpose built vault building. We ripped the old vault out of the first location. Now we were really well positioned for another 10, 15 years of growth. But those were the two things, COVID and a bad landlord.

Tarek: Well, it's one of the questions that I remember asking you was, how do you handle the extreme weather conditions from time to time that happened in the Caymans? Because if there's a big hurricane, what do you do to protect the facility? I remember you saying that when you built the new building, built it at elevation to protect against flooding or things of that nature. Can you comment on that?

Mark: Sure. Yeah, no, I mean, hurricanes are real thing. It was the first question I ever asked my future partners when I took the job. I'm like, well, what about hurricanes? And it's a real thing in the Caribbean, obviously. So Cayman, you know, if you build real estate in Cayman, when you design your home, your business, your office tower, your vault, I mean, you have to plan accordingly. And there are standards that exist. And obviously, you have to build a cat five standards as a baseline. But when you're building a vault, obviously, we over engineered it. I mean, I tell people that building, that new building will be there in 1000 years, it may be underwater, we don't know, but it will it will be in the ground, like bolted to the ground in 1000 years, because we just over engineered, you know, like three x, like we just went nuts. And, and it's elevated, it's about, I don't know, 12 feet above sea level, which is, you know, it sounds like nothing, but that island is enormous, is very, is very flat. So, yeah, I mean, and again, here's the thing I also tell people, like, you know, when you look at a sunken treasure, right, they recover these these treasures off the, you know, off the coast of Florida, or wherever the gold looks exactly like it did back in 1600, when it sank, because metal doesn't do anything. Sorry, water doesn't do anything metal over time, like silver, it'll tarnish or whatever. But that's all part of the insurance, it's all recoverable, the metal is not gonna be impacted by water damage. And they're, you know, like I said, that building will be standing through storms for forever.

Tarek: So so let's go back in time a little bit. So you grew up in Canada, you mentioned, you know, your mom and dad, teacher, your dad was a teacher.

Mark: And my mom worked as a secretary at the university.

Tarek: Yeah. So walk me through, I guess, your your schooling and your journey, how did you end up at Kitco? Was that a, you know, a place that you had targeted that you wanted to work? Or what's the history like there?

Mark: Yeah, so mom and dad, lots of credit to them, quick shout out, lovely, just an amazing couple. They raised two boys, education was big. You know, if we had good grades, there was like a small monetary reward. Hey, that's nice. Yeah. My mom also used funny enough, used to pay me to score goals in soccer. So I was like the youngest ever professional soccer player. I remember one year scored 30. And I made 30 bucks. I was like, hey, there you go. So you know, there was always in there was always, I guess you could say they, you know, they were humble, but there was always a reward for performance, which is a good and bad thing. Like in retrospect, you know? So shout out to them for that. How did I end up at Kitco? So this is kind of a funny story, because I've been asked this question many times. And the truth is not flattering in the sense of like, I did not target Kitco. I studied finance in school, I finished top of class in accounting. And all my friends were CPAs. And they're all making good money. But they were working like 80 hours a week. And I was like, that's not me. Like the 22 year old version of me was like, that's not me. So I ended up working in fashion. If you remember fashion, American Apparel.

Tarek: Yeah, guys.

Mark: So I ended up working in sales and marketing for American Apparel, which was really cool. It was a great company. It was a great story made in California. Good looking girls in the office. Like I was happy.

Tarek: So funny story there. My first company that I started after The Apprentice was Lionheart Apparel. And we, we sourced a lot of our product from American Apparel and kind of on the commercial side, because it was US based. It was like the one product that you could get that wasn't manufactured overseas.

Mark: And I still have a t shirt, like those t shirts hold up, I still have a few, you know, and they still look pretty good. So anyways, long story short, I'm working at American Apparel doesn't pay. You know, I like I like the job. I like my colleagues, it's not paying. So it's Christmas. And I got a bonus. And I was 25 or 26 years old, I get a bonus. It was a gift certificate to the movies for 100 bucks. Okay. And my wife, I was sorry, my girlfriend at the time, who later became my my, my wife was working at Kitco, this precious metals company in Montreal, I didn't know a lot about it. I didn't really know what she did. I knew she was in the back office. It was a gold company owned by it's this local guy. And she came home with her bonus. And it was $5,000 cash in an envelope, which at the time was a lot of money for us. So I was like, okay, like, I'm doing the wrong thing every day, nine to five. So I ended up applying for a job, I ended up becoming an executive assistant to a woman who we now employed SWP, Rosie, she's wonderful. Everybody in the industry knows her, she's, she's been around forever.

Tarek: And what year was this?

Mark: 2006.

Tarek: Okay.

Mark: So it's, I mean, now 20 years into the career. But yeah, started there, you know, didn't didn't say a whole lot for the first two years. I'm kind of an observer. I love listening and learning. And so I listened and learned for a long time at Kitco. I got to sit in all all the executive meetings, the president, you know, it was a great way to learn the business.

Tarek: What were some of the big learnings?

Mark: Rule number one, never burn a bridge. Rosie taught me that, like, it's a small industry, you said it earlier, it's a really small industry, don't ever burn a bridge. Listen to your customer, but not in the cliche sense of like, oh, yeah, customers always right. You know? Yes, you could make that argument. But that's cliche. What what I mean is, your customer ultimately will tell you exactly what you need to do to build a successful business. So it actually makes your life a hell of a lot easier if you just listen to their feedback. And I'm not talking about complaints, I'm talking about like, what are they asking for? What are their root concerns? What are they, you know, that if you get to know your customers well enough, they will give you that information, which is extremely valuable,

Tarek: Which I think is really, you know, vital when when you're in an industry that is heavily commoditized, like ours is, everybody's selling this largely the same products. Many of the customers are agnostic on what form they're taking, you know, the metals in, they just want to have exposure to the physical metals. So when you think about how you as a business are differentiating, differentiating yourself from everyone else, you know, it can be challenging. And sometimes that differentiation can be something as simple as jurisdiction, which is, which is really foreign to sort of the modern model of business, because we've gotten so accustomed to everything being online, that it doesn't really matter where you're located, you know, unless you're in the service business. So yeah, I think that's wise advice for sure.

Mark: Yeah, jurisdiction is a big one. And I get what you're saying. You know, I think people forget where things come from, you know, and a lot of it's, you know, consumer base. So they're, they're ordering it for home, like, you know, the average purchase on Amazon, it's like coming to your house. So it's an afterthought. But in our business, when you're deciding where you're going to put your life savings, or part of your life savings, that jurisdictional choice is huge. And whether it be domestically and picking the right state, you know, in Texas would be on my short list if I was living in the US, obviously. You know, I've in my career, I've seen, even in, you know, the last 15 years, it's like, I remember when Hong Kong was a place where people put a lot of gold. And then they had some political issues and kind of a falling out with with with mainland China, and the government, and then you had Singapore came on the map. And I remember looking at my colleagues, and I'm like, why would you want to put gold in Singapore? Like, what's that all about? But it had attributes that were very attractive to, you know, international investors. And, and even to this day, you could argue, it's a pretty attractive place to put your gold. And then we've tried to recreate that with Cayman as well.

Tarek: Yeah, it's it's so interesting, because we use a lot of the vernacular that is common to banks, where people are making a deposit, or they're making a withdrawal in a depository. And modern banking is very different than how banking started, where you would go to the local bank, and you would physically deposit, like you use the expression safety deposit boxes. I mean, that's, you know, originally, the banks were actually holding cash, or they were holding gold. And today, we open a bank account, and everything is on, you know, our phone, and it's totally digital, and it like the deposit vaporized, we never actually see the thing. And yet, in the precious metals business, it's an analog business, it's never going to change, like this is physical gold, and it has to be located somewhere. It's either in your house, it's, you know, in your gun safe, it's in a depository, it's physically located somewhere. So that becomes part of the decision tree that is non existent in conventional banking.

Mark: That's a very, very good point. And even with the invent of smartphones, even with digital gold, and you know, blockchain, gold backed products, like, the fact is that gold still sits somewhere, and that gold moves from one vault to another. And yeah, obviously, that's a business we're in.

Tarek: And you have to now or ETFs as well, right? So you think about the gold ETF markets, a $380 billion market, where's the gold?

Mark: Yeah, you know, where's the gold Tarek?

Tarek: New York and London, that's where most of the gold is predominantly. And yeah, I mean, as a jurisdiction, is that where you want your gold? Or do you just want price exposure? And you don't really care about the the asset that backs the ETF? These are all great questions.

Mark: Yeah. And I think one of the challenges that that guys like us who are in the physical space now face is that people expect their experience with a gold dealer to look like their experience they have with the bank. But we still have to take care of all that logistical challenge of moving metal, you've got customs, you've got obviously, you know, the flights. I mean, I remember during COVID, like, you couldn't put gold on a plane, because FedEx was busy shipping COVID shots, or COVID, you know, vaccines and so on. And so things like that can can obviously interfere

Tarek: The movement of metal in the United States, we we use Brinks, tractor trailer, and I think we can get about 600,000 ounces of silver on the tractor trailer, move that across the country. Well, if you're dealing in millions of ounces of silver, it's going to take time to get trucks loaded, palletized in out with all the security restrictions that we have in that across the country. So, you know, taking physical delivery of a metal product can can take a week, you know, and that's a challenge. And early days, like you, you and I have both been in this industry a long time. But when we were shipping, when Kitco was shipping, and early days, like Apmex, and the pioneers of the ecom business, it was US Postal Service registered mail, which was like 10 days in transit, you had no tracking numbers, it was a disaster. At least today, we have UPS and FedEx, and we can have overnight metal. But it all speaks to your point that it's very hard to replicate that, that digital speed with an analog product.

Mark: Yeah, but I think it's worth the wait. You know, and I would argue for anyone who says like, Oh, I've got this great app. And I just bought, you know, this, you know, fractional amount of gold, my hey, that's great. But where is it? Do you did you read the fine print? Do you even understand, you know, where it is the same with an ETF? I mean, I've read the contracts, I've read the fine print, I know who the custodians are. Like, whether or not, you know, you can make arguments that some of that gold might be leveraged, some of that gold might be leased, some of that gold may not even be where you think it is. But point being, like, you need to take the time to understand what you're buying. And the fact that you are buying a physical product, whether it takes one day to get to your house, or 10 days, or, you know, two weeks to get to a vault, or whatever it might be, I think it's worth the wait, because of that physical asset, you cannot replace the security and the fact that you're removing any third party risk, it's personal property, which is a big message I always tell people, like they may not even realize, like, under the law, that physical gold bar is considered personal property, it's yours, you own that no one else has title to that. There's no lien, there's no risk. It's all removed. If you pick the right partner.

Tarek: So going back to Kitco, then, so you're learning, you're working with great people who have a lot of industry experience and business experience. What was the rest of that transition like over the next five years of your career there?

Mark: Yeah, so Kitco got into the news, I don't know if you remember, they were in the news in like 2010 2012.

Tarek: The and for those listening, Kitco is a major brand in the precious metals industry, and early days internet, it was the Kitco widgets that were on almost every single, you know, website that had anything to do with precious metals to get live updates on what the price was of gold and silver and platinum, etc. So they were a major brand before sort of the last 15 years where the the US market became much more developed and robust in the precious metal space.

Mark: Yeah, they were the first company to ever post the live pricing. So first, it was the London fixes, and then it was a spot price. And that's their claim to fame is they were the first company to really ever post the spot price. So all jewelers, all market makers, retail investors, everybody went there for the spot price. So I don't know if you remember Tarek, but in 2010 2012, Kitco was in the news. And it was a big deal because basically, there was an accusation at the state level in Canada, we call provinces, but at the state level that they had committed fraud. And that involved kilo gold bars. And it's a long story about how this all unfolded and why they were accused of this by the government. But it was front page news. Like I remember showing up to work one day. And there was guys in vests, standing outside the building. And we weren't allowed to go inside. And they were they were literally walking with computer like it was it was a scene of like a movie where you're like, oh, bad guy just got caught. It was like that. And after that, the company changed. You know, the President went through a really hard time, you know, to his credit, they ended up winning that case. He never he had tons of lawyer fees, I'm sure he, you know, he's out of pocket on the deal. But he actually was found innocent. The company was found not guilty. So his name is cleared now, which is great. But it changed the company culture. And a few of us younger guys ended up leaving, I ended up going to work for a small dealership in Nova Scotia, which is this province north of Maine, if you know, oh, sure, the Northeast, and really small outfit. But what it kind of taught me is like, I went from like one of the biggest companies in the business to like a very small company where I was like, face to face with clients every day, you know, selling them a couple ounces and buying scrap metal off the street, which actually I always thought was pretty cool.

Tarek: So it was it was an interesting say scrap metal off the street. So you're going to like garage sales and yard sales and pawn shops.

Mark: So yeah, I did some pawn shops. No, but I'd have like, literally like divorcees walk in with their wedding bands, man. But it taught me a different part of the business, which I still appreciate, because now if you talk to me about scrap, I understand I know how to test it. I know I know what the rates should be. So like, I was thinking our business, it's like, I'm always happy that I saw all these different aspects, sales and marketing, product development, scrap buying, you know, small, big, and now starting a company and getting more sizable, you know, all the way up to the LBMA and IPMI and all those things. It taught me, like I always say, whenever we do something new at SWP, I want to be the first one to do it. Like I want to understand before I ever ask someone to do something for me. And I think that's a good business practice.

Tarek: So where did you go from Nova Scotia?

Mark: I went to Cayman. So that was the phone call. That was a phone call, went to Cayman, worked there for three years, work, work, work my bag off. Like it was big time work. Like I will, you know, startup mode. I remember driving home at night after, you know, another month in the books, you talked about like, oh, capital outlay. And you're trying to, you're trying to earn a return for your investors, myself included. And I'm like, I remember asking myself, are we going to make it? Like, I don't know if we're going to make it. And then I met this beautiful German girl, showed up in Cayman, my wife, now Monica. And I ended up leaving, going to Germany for two years. I told my partners, I'm like, I'm going to run your Cayman Islands business from Munich. And one of them hung up the phone.

Tarek: Oh gosh.

Mark: He's like, he just hung up.

Tarek: There are some advantages though, to being in Europe because of how much precious metals activity happens there and, you know, relationships with London and Zurich and elsewhere. Did you exploit any of that or were you just kind of parked out in Munich?

Mark: Oh no, I was, I was still working hard. And of course we explored, you know, it gave me a chance to go to Liechtenstein. So Liechtenstein was this country I'd never heard until I got to Munich. And now I'm over there, I'm going to Zurich, I'm going to Liechtenstein, I'm meeting the vault operators over there. So we opened up the Zurich, you know, offering for our clients. We opened up the Liechtenstein offering, which is actually a really big one for us because no one else was offering it except like local German Swiss companies. Nobody knew, no North American investors knew what that was, but I could get on the phone with them and be like, I've been to the vault. It's amazing. This is like a five-star cut into the Swiss Alps vault. This is incredible. And so those life lessons and, and, you know, experiences just feed into the story, feed into the brand.

Tarek: And from Germany, where did you go?

Mark: From Germany, we went to Golden, British Columbia, which is home, which is not too far from where you're at. And yeah, we live in the mountains, 4,000 people in this, this small little village. It's a great ski town, beautiful scenery. And that's, that's home now.

Tarek: How has SWP came and changed since COVID? Because COVID really, you talked about a little bit earlier, you know, the, the long nights and, you know, working around the clock really changed the industry because we had this depression in the industry and, you know, 2017, 2018, it was very slow. There was not a lot of activity in metals. There was this existential debate between Bitcoin and gold. You know, Trump was elected, interest rates were really low. It was pro-business in, in the U.S. specifically. And you know, a lot of money going into equities and real estate and anything other than precious metals. Then COVID hit and the whole thing flipped and, you know, metals are like the fear trade and people started buying toilet paper and gold and ammo and everything else. What have you seen change over the last five years and what are you focused on?

Mark: I mean, for us, for our company it, it gave us the scale and reputation we needed to be able to take that, that big, that first leap, that real leap forward where we could then join the LBMA, where we could reach out to partners like yourselves and say, okay, you know, we know that we're going to be around now for a while. We have enough assets under custody that this model really works. So, you know, it was fortunate in the sense that it helped our business, unfortunate for the rest of the world, obviously, but I don't think for, from gold's perspective, that was as significant as what we're experiencing right now. And, and I think it's going to take a few more years for our industry to reap the ultimate benefits of what we're experiencing right now on a macro level.

Tarek: Comment on that.

Mark: Like, I can't take full credit for this and I'll, I'll take full credit for this, but I can't take full credit for the fact that, you know, for 20 years, you know, gold has always been in the shadows. We're always, you know, it's like either you're a gold bugger or not, either you get it or you don't. And we're here to tell the story, you and I, and we've educated a lot of people over the years and we've done a good job of that, but for the most part, it's been a struggle for gold to be relevant. And then Bitcoin showed up. So like, you know, if we're trying to, we're trying to make gold a thing and then, you know, Bitcoin gets invented and then there's the whole back and forth between Bitcoin and gold. But I think that, that has been settled. But my point being that right now gold's relevance is at an all-time high for me in my 20 year career, because there's so many indicators that things are going sideways and sideways or changing at a macro level, significant changes, you know, from a trade war perspective and obviously leadership perspective, you've got China continues its rise. You've got, countries are pulling in different ways. Leaders are pulling their people in different directions.

Tarek: Becoming a more isolationist.

Mark: Isolationist, yeah. And former allies and trade partners are turning away from each other. You've got tariffs obviously is a more short-term thing that's causing some issues, a lot of volatility. And gold is central to that conversation again. It's a structural asset that not only central banks, corporations are going to start leaning into, we're seeing, you know, corporate clients reposition and repurpose their treasuries to include gold, whereas before it was like, I'm just going to buy you as treasuries. Like, why would I buy anything else? There's no argument that gold, and that's changing. Now, you and I are sitting at this conference and people are like, oh, you know, demand's okay and everything's going okay. But bigger picture, gold is relevant again. And that to me is ultimately the most important thing.

Tarek: And price is a big communicator of that.

Mark: Yeah.

Tarek: I mean, look at the price increase over the last, you know, 18 to 24 months. Actually, I was just, it's interesting, we were having a conversation at a financial conference I was at recently. And I was saying that since 2001, so essentially the last 25 years, gold has outperformed the S&P 500 total return. Total return, that means inclusive of all dividends. Gold's returned 1,130%, and S&P 500 has returned 600%. And you say that to people, you say that to guys in wealth management, and they're just shocked by that, because it's just an incredible amount of alpha in gold relative to S&P 500. Now, if you break that down into individual years, gold's outperformed 13 out of 25 of those years. If you break it down into five-year increments, gold has outperformed three of those five five-year increments. So from a technical standpoint, we've been looking at gold as, you know, once it broke out of that 2100 and went higher, that we're in the beginning of another major super cycle in metals. And we're beginning to see that play out not only with gold, but now silver is catching up, and platinum is starting to move, and even copper and some of the base metals are starting to move. So, yeah, there's certainly evidence of a structural shift that's happening globally, and the participants are global, because it's a global commodity.

Mark: Yeah. Yeah, I was reading some numbers the other day, and global growth will have its worst year since COVID. You know, the USD, you know, is under some scrutiny, is weakening. Obviously, that's good for gold priced in U.S. dollars, so that correlates really, really high. And, you know, from an investment investor standpoint, that's good news. So, but here's the one that stuck to me, and like, I'm big on mentors. I'm big on, you know, people that have been around and are smart. Like I said, I observe, like I listen. I'm not, you know, necessarily here to tell people how things work. But when you have a guy who's 70 or 80 years old, who's been investing in gold and silver since the 70s, who owns property in multiple locations, who has reserve fuel, reserve water, grows his own food, you know, and he really gets, he's lived through things that you're just too young to have lived through. When he's like, this is going to be rough. He's like, the next three years are going to be rough. He's like, do not, you know, this is not a time for risk. This is a time to shore up for your family, your portfolio, so on. This is the kind of thing I'm hearing. Aside from all the news, all the things we just talked about, all the indicators, you know, all the headlines, that's all there. It's all there. But when people who have lived through it start telling you that you need to be prepared, and it's not like, you know, doomsdayers and they're always out there, but these are educated people that have lived through things. I'm hearing that now. And so those two things combined, all the indicators, all of my experiences, and then those guys telling me, like, shore it up because this one's going to be rough. And that's where gold, it all kind of comes back to like, well, that's one way I can do that.

Tarek: Yeah. And I think it can be summarized in the word uncertainty. You know, there's just a tremendous amount of uncertainty about, you know, the resilience of the economy, the resilience of consumers, the resilience of trade partners. And, you know, what we've come to expect from the global order is changing dramatically. And what can you rely on? What can you, quote, unquote, bank on? No pun intended. What is there? You know, is Bitcoin a reserve asset? Or, you know, Bitcoin could be any digital currency. Is that the new money? Is that the new gold? Or is it a tech stock? How are we to understand it? You know, these are all really good questions. And, you know, the answer, we're talking in our book here a little bit, but, you know, the answer is not necessarily putting all of your money into gold or silver. It's just that, you know, it's a time where, you know, you might want to get a little bit conservative, you know, as you say, shore up you know, the home front and the assets and everything else. So, yeah, I certainly see the wisdom in that for sure.

Mark: Yeah. Bitcoin, I mean, I think I don't see it as a reserve currency. Personally, I can see why it's an attractive headline for leaders to use. And I'm not opposed to Bitcoin. I own Bitcoin and we accept Bitcoin as payment and we support the whole ecosystem as we can. But if I, you know, if I really, if it came down to the thing about gold is it's been proven over time that it's the ultimate negotiating chip. Like when you have to pull your chips out and be like, OK, we're going to we're going to talk about what's about to happen, whether you be as a country or whether you be an individual, you need something done. I'd rather have gold in my pocket. I think that's ultimately like I've heard so many stories of people fleeing a communist country with gold sewn into their their jacket liner who got to the border, who were able to essentially bribe someone to move into a free country and then continue with their life. The Vietnamese after the war coming to America, those who had Viet currency, worthless, burn it. Those who had gold were able to start convenience stores and were able to build something for their family.

Tarek: There isn't a place on the planet that won't accept gold.

Mark: That's what I'm saying.

Tarek: There isn't a country that doesn't recognize the value of gold. It's universal money. It's the money par excellence. Yeah. And last resort.

Mark: Between you and I, I don't want to I don't want to live in a world where we need to be pulling out our gold and silver to settle and central banks need to do this during war times to pay debt. And so I don't want it to come to that. But. There's enough uncertainty, to your point, that that is now coming to the forefront of the conversation again, which makes what this industry relevant and is driving the price and hopefully retail investors who unfortunately are generally the last ones to really clue in on a behavior. Hopefully they don't take too long.

Tarek: Outside of the metal space. What is your life like? What are you interested in? Where is your focus? Do you read books? Do you have hobbies? What do you do?

Mark: I, I always thought of myself as an athlete. Never played pro anything, but played every sport. Love being active, love moving. I still play hockey back home. I still play softball, baseball. So love being outside. But yeah, I mean, what am I doing with my time is outside of precious metals is I volunteer. I write for my local newspaper. I enjoy writing.

Tarek: Really?

Mark: I do. I cover local news stories and you're a beat reporter. I'm a beat. I, I missed, I always wanted to be a writer when I was a kid. It was, it was short stories and poetry. I'm not embarrassed to say I loved the creative aspects of writing. My parents were very supportive of that. I expressed myself much better through writing, I think, than, than other forms of communication.

Tarek: You're doing a fine job.

Mark: Yeah, thanks. But I love to write. So I write for the local paper. I volunteer for the local hockey team as the treasurer of the board. I'm the education advisor for the team. This is a junior team. So there's like 18 year old kids that are all going off to university. So I'm trying to help them take that step from high school to university. So I fill my time in my local community. To me, that's big. Growing up in Quebec as an English kid in a French place, I was on the fringe of the community, which left some pretty interesting scar tissue, which I'm now attempting to, you know, forget about and move on and be, play a role in my community without being political or anything like that.

Tarek: You mentioned that you love writing. Were you a big reader? You come from an academic background with your dad being a teacher. Did you read a lot growing up as well?

Mark: More so now. Yeah, I'm really, you know, taking allowing myself the time to read and what do you enjoy reading history? Yeah, I love economic history, war history. I've always had a fascination for war. My grandfather was in the army. So Second World War, he was a he was an engineer. So he always showed me the bombers and the planes that he used to repair. And so that was like where I, you know, obviously got into that. But yeah, I love watching documentaries about the Vietnam War, Second World War, First World War. I find it fascinating, the human behavior, trying to understand why people do the things they do.

Tarek: Yeah, yeah, it is. I also love history. And speaking of gold, I mean, it's hard to read economic history or, you know, the history of war without ultimately arriving back at gold in some form or another. It's like what, what, you know, causes people to sink ships, you know, at the end of the day, it seems like, you know, the economic system is intimately tied to why we go to war in many ways.

Mark: Yeah, I mean, it's only solidified, you know, what, you know, what we do for a living in the sense that I can kind of get behind it. But, you know, we're, we're, we're living up until now, we're living in relatively peaceful times. But if you ever need to, you know, any kind of affirmation of, hey, you know, this is worth doing, you know, this is important, our clients are doing the right thing, we're doing the right thing about our clients, all you have to do is read history. And then it's like, oh, it's crystal clear.

Tarek: Are you sensing that that's sort of the, the general vibe in your community of 4000 people in Canada? Or is this where people's minds are? Or do you think they're oblivious?

Mark: I was surprised how many people in our little mountain village are actually, you know, quite tuned in, in terms, they're a little bit more conservative, maybe by nature. They're not mainstream in the sense that they uprooted their lives and moved to a small town that's very isolated, there's a it's about an hour's drive to the next town. So these are people that say, like, I'm relocating to a place that is away from other people, and the luxuries of the city and all those things. So I think, inherently, the way that they are, leads them to maybe be interested in what we do. And I've been surprised by how many people have been like, oh, your gold deal is awesome. I own silver, you know, I buy silver, I buy gold, whatever. But I think most people, you know, when we bring it up, they're like, so you buy, you know, you buy like the divorcees rings, like you're in the scrap business. Like, no, I did that. But this is different. Yeah.

Tarek: There have been a lot of headlines recently about Trump making overtures to Canada to become the 51st state.

Mark: Are we gonna go there?

Tarek: Yeah, we have to. I'm just curious, you know, in the Canadian mind, have those conversations come up over a cup of coffee? What are people saying about that?

Mark: They have. Yeah, my best friend, he's not Canadian. He's Swiss Canadian. So he moved from Switzerland to Canada. He's like, it sounds like a pretty good deal. Like you should go for it. I'm like, we're far too proud. You know, the thing about Canadians is we're quiet, but we're very proud. We know we live in one of the greatest countries in the world. The thing about being Canadian, and in Canada in general, it's a it's a place where it's like struggle is real, like for half the year. So there's a lot of hardship, you know, and we have ice storms, and you know, these miserable, like stretches of time. And what it does is it kind of hardens you a little bit, that you're just like, you have a lot of resolve. You have to have a good work ethic, like you're not going to make it if you're not like hardworking in general, or you're willing to like sacrifice through those winter months to get an amazing summer and all those benefits. So it kind of hardens you as a person. And so long story short, is we're far too proud. And it's not that we don't love America. Like, let's make it clear. Canadians love Americans. Okay. I love being in Phoenix. I love Texas. Like coming to visit you guys is like a highlight. I will always remember driving through that small town on the way there. You know, with like, that the railroad goes right through town. There's two main streets.

Tarek: And it's like, hasn't changed in 100 years.

Mark: Awesome. The brewery in Shiner. Awesome. Like all that. Love it. We like Americans a lot. The politics are pretty divisive for us. We look at that and we go, it's too extreme because Canadians are extremely conservative. So we're centralists. Like, it's like, we don't want to change. Like Canadians hate change. And that's why they just reelected the liberals who were in power and were, in my opinion, very damaging to our economy and our country for the last decade. We just reelected them because we hate change. So we look at someone like Trump and it's just a little bit too loud for us. It's just, it's like, it's a little bit too loud. So the 51st date, it cuts a little bit deep, but you know, at the same time, there are things about your country that we respect and we think would be great.

Tarek: Yeah.

Mark: Yeah.

Tarek: If people are interested in storing in the Cayman Islands, where do they go?

Mark: SWPCayman.com is the website. Soon enough, hopefully they'll be able to find us or some semblance of Cayman storage through your website. So we're very happy about that.

Tarek: Yep. Excited to work with you.

Mark: But SWPCayman is the website. You know, we also do the YouTube thing. You can find some educational videos there as well. But yeah, that's home.

Tarek: Mark, you do great work. Thank you.

Mark: Thanks, Tarek. You know, I got a lot of respect for you. I'll say it here publicly. I don't tell this guy enough, but you're one of the people I actually have a ton of respect for and not just blowing smoke, you know, a young guy, same age. I think you might be, I bet you're younger than me.

Tarek: 46.

Mark: Oh, you're older than me. That's great. But no, a lot of respect for what you do and keep doing it. That's kind of you to say that. Thank you.