You don’t need to be a Ph.D. to realize this current oversold situation in gold and silver mining stocks will correct eventually and those investors ‘in the game’ will be rewarded. This is the time to be a contrarian, time to be brave, time to be bold, time to step up to the plate and make some decisions and then wait. Exercise patience and wait for your seeds to grow, and grow they will, in the coming bull market in the natural resource sector.
So says Dudley Pierce Baker (commonstockwarrants.com) in edited excerpts from his original article* entitled I Wish I Were Smarter.
[The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Baker goes on to say in further edited excerpts:
…Some of the brightest minds in the natural resource sector discussed this timing issue at the recent Metals & Minerals Conference in San Francisco.
- One thought was that gold could still plunge to $900 an ounce. Ouch. That would be nasty, but perhaps not out of the question.
- Others think that gold already bottomed last June at the $1188 an ounce and we are ready for the uptrend to resume.
- Some analysts believe we will trend lower and sideways for another year or two before an uptrend resumes.
No one knows, (and no one will know until well after the bottom is in place and we can look back in our rear view mirror with clarity…[so] what is the average investor to do, if anything and when? …[I believe] we are near a low in gold and resource shares and, over the next few years, fortunes will be made by those investors staying the course and remaining committed to this investment sector. As Rick Rule says, “you have stayed for the pain, will you not stay for the gain?”
Many good companies are selling for below or very near their cash value. While this is unthinkable in a bull market, at this particular time it is not difficult to find companies with lots of cash in the bank selling at ridiculously low prices.
Now I may not be the smartest guy on the block but I can recognize opportunities and it is definitely time for investors to be positioning themselves for the next big uptrend, which could begin at anytime.
Should you be nervous? Of course, everyone is nervous, because ‘we’ don’t’ know if there is further downside risk. So perhaps you will want to tip toe into the waters and keep some cash for later, hedge your bets so to speak. While an aggressive investor might say, ‘the hell with it, I am going all-in’.
I could show you some charts, but you already know how bad it is. This is the worst of times for the resource shares over the last decade or so. Charts would only make you cry to see the destruction of wealth in this sector.
My suggestion is to focus your attention on:
- companies with strong management
- management having significant share positions in the company,
- good properties,
- cash in the bank and
- operating in safe mining environments with little or no geopolitical risk.
The balance of 2013 could be very interesting as tax loss selling season in upon us. Funds will probably also be selling to clear out their weakest positions before year-end as well as to meet redemptions by their shareholders. Thus investors have until the first of the year to complete their due diligence on selected companies…
While I still wish I were smarter, I am not. However, I will use the approaches above to find new opportunities and alternative investment strategies and to be in the best position possible heading into the first of the year.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
We all think the price of gold, the metal, is depressed and is about equal to the total cost of production but when one compares the price of precious metals mining companies to the price of gold bullion, their prices are at historical lows. It seems that the mining shares can only go in one direction…up…but when and by how much? This article suggests it presents the greatest opportunity in 30 years. Look at the charts! Absolutely unbelievable. Read More »
No matter what the latest “news” development is for PMs that paints a rosy picture, those in the fundamentalist camp are looking through rose-colored glasses to expect change in the near future. The charts for gold & silver continue to tell a more accurate story that belie all known fundamentals, and the charts shown here depict a market in decline with no apparent end in sight. Read More »
The gold price will likely decline to $1,150 next spring but should find enough buyer support from physical buyers and jewellery makers to prevent a fall below $1,000. Read More »
Many events moved the market this month which are all very bullish for gold. In addition, gold’s leading indicator is currently at a major low area all of which strongly reinforce the likelihood of an upcoming sustained rise. Let us explain. Read More »
Is it time to throw in the towel? Is the bull market in precious metals really over? I don’t think so because my analyses suggest that nearly all of the fundamental factors that have been driving the gold price higher in the past decade have only strengthened in the past two years. Now that the correction has most likely run its course, I expect gold to rebound into the close of the year and bounce sharply higher in 2014. Here are the 12 reasons why. Read More »
Other Articles by Dudley Baker:
We suspect that many precious metals investors are saying, “We don’t want to play anymore!” and our reply is, “You mean you want to quit right now? Right at the bottom of this cycle? You must be crazy – and that is crazy with a capital C!” True, this is a very challenging market environment for resource shares, but we know what the ultimate outcome will be: higher share prices. The only question is “when” and our opinion is that we are very close in time (within days or a week or two at most) of being able to say that the lows are behind us. Let me explain. Words: 785 Read More »
…Even in these challenging times there have been many great winners in the natural resource sector. I have been fortunate, lucky or smart to have racked up some nice gains through the years. I have been consistently picking winners, big winners, monster winners for years – a string of 10 years of 500% plus winners and more, sometimes much more, year after year – …[so] my message to you is simple: follow me! Your only question should be “Which of my current positions will be the next big winners?” Words: 804; Table: 1 Read More »
$5,000 to $10,000 may not go far in buying the top companies on the NYSE or the Toronto Stock Exchange, but in the junior mining sector, you will be amazed what you can accomplish. You can actually buy thousands and thousands of shares. Yes, these are ‘penny stocks’ but the challenge is to uncover those companies which have the potential to perform well in the coming months. The risk is incredibly high but so is the potential reward. [Let me explain.] Words: 538 Read More »