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Gold Stocks and Bear Markets...
(oldy but goody)
Tuesday, December 8, 2009
When Gold is in a bull market, so are Gold stocks. There are always exceptions in markets and anyone who looks hard enough can find weeks or even months when Gold is going up and Gold stocks aren't. Speculating isn't easy, to be sure. But one tends to play the odds to maximize one's chances of success when trading or investing.
If you think Gold is going up, then you're safe 8 times out of 10 investing in Gold stocks. It's not 100% and the exceptions generally relate to times when Gold is not in a secular bull market and during market crashes or mini-crashes. Gold is in a secular bull market, so we don't have to worry about this first item. But focusing on the second item, this is what happened to Gold stocks in the Great Fall Panic of 2008 (which the federal reserve and Treasury were absolutely, entirely and irrefutably unable to stop). Ironically, at times like this past fall's panic, the fundamentals for Gold stocks tends to improve rapidly while they are tanking (due to an increasing Gold to commodities ratio during the crash).
But what about Gold stocks during a bear market? If the Dow Jones and/or S&P 500 enters a new leg in this general stock bear market (which is far from over), can Gold stocks still go up? Doesn't a falling market drag all stocks down with it? In the case of Gold stocks, the answer is an emphatic NO!
There are so many examples in history that I will resort to the same old pictures and charts I show every time I am asked this question. The easiest to relate to are those from recent history, no? Before the current bear market that began in the fall of 2007, the last bear market we had was from 2000-2003. Ignoring the NASDAQ, which was a tulip mania sort of collapse, and focusing instead on the S&P 500 index yields information that I believe is highly relevant to the current situation.
Here's a chart of the last bear market from 2000-2003, plotting the S&P 500 (candlestick plot) versus the unhedged Gold Bug Mining Index ($HUI - the black linear plot):
The old adage that Gold stocks rise and fall with the stock market is dismissed as false by even a casual perusal of the actual data. Now, it is true that when the stock market really tanks fast, everything is thrown out in a panic sell off. If you think a market crash is dead ahead, don't buy Gold stocks. I don't think we're due for another crash any time soon. The first leg down, if you believe in Elliott Wave theory, is not the vicious leg down, the 3rd wave down is. In other words, we have a 1st leg down in the bear market, then a bounce into the spring, then we may have a crash-like scenario or at least a vicious drop. The fireworks aren't likely to get started immediately.
And, of course, everyone likes to talk about the worst bear market in the last 100 years, the 1929-1932 bear that claimed 89% of the Dow Jones as its victim. Even if a replay of this scenario is coming, the favorite blue chip senior Gold miner of the time, Homestake Mining, simply yawned once it made it through the 1929 crash and made its way slowly higher in spite of the carnage in the stock market (chart stolen from the Long Wave Group - check out their site if you are into Gold and/or the Kondratieff Cycle):
If a popular blue chip Gold miner can gain 50% during a 90% drop in the stock market, I'd say Gold stocks have the possibility of bucking the stock market bear that I believe is far from over. And how about the 1970s? The best chart I can show you is from the 1973-1975 bear market. During this time, the S&P 500 lost about 50% and here's what happened to a major Gold mining stock index (Barron's Gold Mining Index [BGMI], chart stolen from sharelynx.com):
Some things I have learned by experience and by looking at past historical periods when Gold stocks are in a secular bull market (like now):
1. Gold stocks often fall with stocks during the initial portion of a cyclical stock bear market (i.e. 1929, 2000, 2008) but then start marching to their own drummer.
2. Gold stocks do not survive true market crashes or panics but can rise SIGNIFICANTLY even in the midst of SEVERE bear markets.
3. The steepest and fastest part of a stock bear market tends to coincide with corrections in the Gold stock sector.
So, in my humble estimation, the stock bear market is going to take a few months to get a head of steam up for its next leg down. During that time, once this brief Gold and Gold stock correction is over (I suspect before December is over), I believe both Gold and Gold stocks will EXPLODE HIGHER EVEN IF THE STOCK MARKET GOES LOWER.
This is my thesis. It is backed by actual facts and data from relevant history. If I am wrong and you lose all your money speculating based on the homework I did, I will refund your subscription fees (but not the money you lost...). If it is any consolation to those bullish on Gold and Gold stocks, I will be 100% invested in Gold and Gold stocks (with a small exposure to silver and silver stocks) from the long side before December is over.
My "dream" scenario is to ride the Gold bull higher into the March to May 2010 time frame, then sell Gold stocks and switch to shorting the stock market to catch the juiciest part down of the bear market leg in general stocks that I still think is coming. My physical Gold is not for sale until the Dow to Gold ratio gets to 2 or less.
As far as the shorter term, the current correction is likely almost over in price but needs a little more time if history is a guide. I may well start buying before the end of the week.
http://goldversuspaper.blogspot.com/2009/12/gold-stocks-and-bear-markets.html
and yet another viewpoint posted today...
Why Gold Stocks are Struggling Despite Record Gold Price
-- Posted Monday, 18 April 2011 | Source: GoldSeek.com
By Jordan Roy-Byrne, CMT
Gold looks fantastic. It is breaking away from a consolidation which could be called a running correction. Two weeks ago Gold broke to a new high. Last week Gold retested the breakout and then advanced to another new high at the end of the week. Its textbook bullish action. Yet the gold shares have really struggled.
Last week the shares failed to make a new high and underperformed badly. GDX never broke to a new high and is below its December high. GDXJ did break to a new high but is now at its December high. Gold is nearing $1500. Its December high was $1425.
There are real reasons for these divergences. Some peers think its the hedge funds shorting the shares or manipulating the market either intentionally or unintentionally. Some think its manipulation by the powers that be. The fact is, these assertions have not been proven and there are some fundamental reasons for the divergence.
The price of Oil comprises about one quarter of the cost of mining. Remember 2007-2008 when the gold stocks badly underperformed? Part of that was because Oil went from $60 to $150. Sure the Gold/Oil ratio is now well above its highs from 2000-2008, but since the summer of 2010 its decreased from 17 to 13. That will cut into margins this year.
Secondly (and we’ve written about this before), the Canadian gold price is up only 13% since its peak in February 2009 and up only 7% since last June. Most gold companies are Canadian companies. Its the Canadian price that is more important to them. Thus, a weak US dollar eventually negatively impacts gold producers.
The gold shares have underperformed a rising price of Gold in the past. We saw it in 2004 and also in 2007-2008. It generally precedes corrections and that is a reason to be cautious beyond the short-term, which looks positive. It is not manipulation or intervention. The proof this time is that all gold shares (seniors, mid-tiers and juniors) are now under-performing.
We’ve noted the fundamental considerations but maybe the market knows something else we don’t. Perhaps the market senses a top in equities? Perhaps the market sees an intermediate term top ahead for Gold and Silver? Perhaps the market thinks the shares will struggle in the seasonally weakest period of the year?
We are short-term bulls but cannot be too bullish with the broad divergence between the shares and the metal. In this bull market, this divergence has always resolved itself with a correction in the sector. Sure it could be different this time but we think not. For more analysis like this and professional guidance, consider a free 14-day trial to our service.
Jordan Roy-Byrne,CMT
Jordan@TheDailyGold.com
previous 2 posts indicate...
that mining shares may take off in near future - of course that's what hope. Have done lots of searching over past few weeks to try to figure out why mining shares haven't appeared to shoot up along side of gold and silver prices - Dan Norcini is pondering the same issue and will likely have more on this in coming days and weeks. Right now his theory is that it won't last - but just never know.
Hedge Fund Ratio Spread Trades Continue to Distort the Value of the Mining Shares
Dan Norcini
I hope to have further on this topic sometime this weekend depending on time constraints but I wanted to at least get some charts up to demonstrate how severely undervalued many of the mining shares are in relation to the underlying metal as a result of the plying of this particular trading strategy.
One of the factors that I believe are involved with this severe underperformance of the shares in general is the advent of the ETF's. Those who want LEVERAGED EXPOSURE to either or both gold and silver can now use the ETF's to do so.
Formerly, there were two methods available - commodity futures or mining shares. Since the charters of some funds prevents them from investing or trading in commodity futures, funds who wanted this leveraged exposure to the metals were forced to go into the mining shares in the past. That implied that bull markets in the metals were going to see substantial money flows coming into the shares.
Since the ETF's came along, those institutions looking for leveraged exposure to gold can now directly purchase the silver or gold ETF's instead and margin those up to obtain leverage. In other words, they are no longer captive to using only the mining shares.
Additionally, the hedge funds, which have proliferated like mushrooms after a summer rain, are able to offer prospective clients exposure to the commodity markets since there is nothing in their charters preventing them from investing in the commodity markets. That attracts further funds that in time past would have flowed into the mining sector directly.
Keep in mind what is necessary to drive prices higher - sustained investment flows. Now, if the investment flows that formerly would be diverted directly to the mining shares have been split and are now moving directly into the commodity futures markets and the ETF's, that pulls a portion away from the shares. That means that there is a bit of an exploitable weakness, a chink in the armor if you will, in the sense that the amount of firepower coming into the shares, is weaker when compared to the other alternative forums for investing in the precious metals.
The hedge funds understanding this then employ a strategy designed to take advantage of the "weaker sister" which suffers somewhat from the smaller money flows heading its direction - they short some of the mining shares while buying the commodity futures and the ETF's. That selling then further absorbs the buying interest that is still heading into the mining sector shares.
The reason they do this is because it helps them manage their risk. When the market sells off in this volatile environment, they are able to profit from the short leg of this trade as the shares head lower generally at a faster rate than the metals themselves do. In other words, they might be losing $1.00 on their long gold or silver positions in the futures or ETF's, but making $1.10 - $1.20 on their short share position. In effect, they have a permanent put option.
This trade has been extremely effective for them which is why they seemingly refuse to give it up but at some point, the effect is to so distort the price of the mining shares in relation to the underlying metal, that something has to snap to bring the share price back in line to historical norms. After all, the higher the metals run in price, the more profitable the well run miners become. Stock prices are eventually determined by profits - Eventually some of the hedge funds plying this trade will begin to realize that they are pushing the trade too far and will begin to exit. That will set off a rush by the others to do the same.
We got a brief taste of this April 5 of this year when the HUI shot up nearly 30 points in a single day. That was the first sign that the days of this trade are drawing to a close. There is an old adage in the trading world which is apropos for this situation:
Bulls make money; Bears make money; but Pigs get slaughtered.
Hedgies beware. The time is coming when there are not going to be any sellers on the other side of your trade when you need to unwind it.
SIL (Silver Miners ETF) to Silver ratio...
from Dan Norcini
This one is very revealing as it contains silver miners. Its performance against silver since last year has been spectacular - if one can measure a poor showing in those terms (spectacularly poor).
SIL Top Ten Holdings
1. Silver Wheaton Corporation (SLW): 12.74%
2. Industrias Penoles SAB de CV (PE&OLES): 11.10%
3. Fresnillo PLC (FRES): 10.44%
4. Pan American Silver Corporation (PAAS): 9.82%
5. First Majestic Silver Corp (AG): 6.86%
6. Coeur D'Alene Mines Corporation (CDE): 5.64%
7. Silvercorp Metals Inc. (SVM): 5.22%
8. Hochschild Mining PLC (HOC): 4.45%
9. Hecla Mining Company (HL): 4.40%
nice letter to shareholders...
https://materials.proxyvote.com/Approved/825356/20110325/SHLTR_84790.PDF
if link not working - look for on their website soon: http://shoshonesilvermining.com/
you're welcome,thanks for ...
stopping by. I visit this site nearly every day and often use the links to browse what's going on from different view points.
bought a bunch of TLR...
agree that it's undervalued and deserves to be higher.
SHVLF @ $0.15 = Starcore, profitable...
last quarter - gold and silver producer with 83 mil shares out.
March 07, 2011
Starcore Reports Positive Financial Results from the Second Quarter of 2011
Vancouver, B.C. - Starcore International Mines Ltd. (the "Company") has filed the results for the quarter ended January 31, 2011 for the Company and its mining operations from the San Martin Mine, Queretaro, Mexico. Starcore had earnings from mining operations of $3.4 million, and net income for the period of $1.45 million for the quarter ended January 31, 2011, on revenues from metal sales of $9.66 million. Over the six month period ended January 31, 2011, the Company reports revenues of $16.1 million, earnings from mining operations of $6.1 million and a loss for the period of $1.9 million. The basic and diluted income per share for the quarter ended January 31, 2011 was $0.02 and $0.01, respectively, and a loss of $0.02 per share for the six months ended January 31, 2011. The net income for the quarter includes a net $1.98 million non-cash unrealized gain on forward sales contracts, and the net loss for the six months ended January 31, 2011, includes a $0.97 million unrealized loss on forward sales contracts.
bought more SHVLF.pk...
and feeling good about it. Holding strong for gold $1650.
Evaluating Mining Stocks: Discovery Investing...
Wed, Mar 30, 2011
By Michael Montgomery—Exclusive to Gold Investing News
When considering investing in junior mining companies many factors must be taken into consideration. The majority of junior mining companies have no revenues or cash flows which makes evaluating them with traditional methods used for established companies less than ideal.
Gold Investing News spoke with Chris Berry, founder of House Mountain Partners, for their take on evaluating junior mining companies. Mr. Berry’s company has created a system for evaluating junior mining companies who lack the reputation of larger firms that have been established in the industry.
“We have pioneered an investment philosophy called ‘Discovery Investing.’ It’s a different approach to risk and is a road map that lends itself nicely to micro and small cap companies. We believe that all wealth creation begins with a discovery, whether it’s a gold deposit or a cure for cancer. With that in mind we look at 10 factors that are designed to evaluate junior companies,” stated Chris Berry.
In this article we will look at some of the most important aspects of discovery investing in determining the value and risk associated with investment in junior mining companies. The first of these is the main asset of the company you are evaluating, the size of their deposit. “Is this a world class deposit, is it a company maker? This is based traditionally on the grade and tonnage, and other intangibles such as the location of the deposit,” stated Berry.
The location of the deposit is also an important factor in determining investment; more specifically, is the deposit in a mining and business friendly environment? “If you have two similar deposits in terms of grade and tonnage, but one is located in Quebec, for example, and the other is in a central African country, then in my opinion the deposit in Quebec should have a higher valuation. This is due to geopolitical intangibles, such as the threat of expropriation and political instability,” stated Berry.
The ownership of the deposit is the next factor to consider. The control that the company in question holds over a deposit weighs heavily on future profits, and takeovers. What an investor should be looking for is if the company owns 100 percent of the asset and has no underlying royalties that they have to pay. Those types of deposits are somewhat rare, but it’s a best case scenario. In joint ventures you want to look at what the partner brings to the table, if they bring financial muscle, then that can defray potential share dilution,” stated Berry. A joint venture partner may also add its technical expertise to the venture which may be beneficial given the circumstance.
The experience and quality of the management may be one of the most important factors in considering investment in a company. Management can make or break a company’s long term potential. In relation to juniors that are looking to start production on an asset, it is beneficial to know if the management team has gone through the procedures before.
“The experience of management is key. Does the management have the financial and technical know-how to take a mining project to production if that is their stated goal? Generally, the longer management tenure in the mining industry, the better,” stated Berry.
The most efficient way to determine the expertise of the management team is to go directly to the company’s website to research the background of the officers. Mining companies welcome inquiries made to the Investor Relations staff concernint the company’s management background and other specifics of the firm.
The potential and the immediacy of production on the deposit is essential to realizing profits. The longer the process to get a mine into production, the greater the courage and patience of the investor to wait for cash flows to be generated.
In practicing due diligence the investor must determine if the project is a “new discovery where the company is ten years away from getting to production due to permitting and environmental studies, for instance. Or is it a company that has acquired a past producing mine in a good mining district that can monetize their asset more quickly,” stated Berry.
Looking into a company’s financial footing, especially in regards to juniors, is challenging as many of them have yet to begin generating cash flow. The financial soundness and sustainability of a company is an important aspect in determining investment.
“In the junior space, the one metric used for financial evaluation is ‘enterprise value.’ That takes the market cap of a company, adds in any debt, then subtracts out the cash. The reason why this is used is that enterprise value is typically referred to as the potential take-over value of a company,” stated Berry, adding, “if the company has a JORC estimate or a NI 43-101 resource estimate, then you can tell what the size of the resource is that company thinks they have in the ground. You can then do the math to determine what the company is worth relative to its peers in the market.”
In determining the value of a junior miner, take these criteria into consideration. Many are generating cash flow from producing on their deposits; in those circumstances traditional metrics on a company’s performance is a valid approach. It is up to the individual investor to practice due diligence in determining the merits of individual companies. When considering investment in firms that have yet to start production on their deposits it is also on the investor to have the fortitude to stay with a company with a lack of cash flow, and to be weary of companies that do not follow through on their promises and targets.
big reverse split...
bummer. Now the question is are they going to start diluting all over again or finally announce something big. Unfortunately, no hint of a big announcement that I know of.
As it stands, one of the few silver stocks that have lost money on.
Why Central Banks of the West Hate Gold...
Posted: Mar 24 2011 By: Dan Norcini
For further market analysis and commentary, please see Trader Dan’s website at www.traderdan.net
Dear CIGAs,
I wanted to post some brief comments to let some of the newer readers understand why many of us believe that there is a war being waged upon gold by the Central Banks of the West.
Let me start this off by quoting from none other than former Fed Chairman Alan Greenspan more than 40 years ago:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard
What the former Fed Chairman was then saying was that absent a gold standard or some device for restraining the unlimited creation of fiat money, there was nothing to impede monetary officials from engaging in such activity to the extent that it would ultimately set in motion a process of inflation, which is really just another name for the erosion of the purchasing power of a nation’s currency by debasing it. Inflation was and is in essence, the transfer of wealth from one class to another.
Today we have the Fed engaging in the very process that Greenspan warned against back then. We also have the BOJ and the ECB effectively doing the same thing to an extent.
Unlike Silver, Gold is the main metal that most analysts and commentators look to when attempting to decipher whether or not inflation is a serious problem. That means the reference point of gold has become a target for Central Banks which want the world to believe that they can create unlimited amounts of funny money with absolutely ZERO impact on inflation levels. In other words, that they can conjure up wealth and produce prosperity with the electronic equivalent of a printing press and produce no serious inflationary impact by so doing.
A rising gold debunks their hubristic assertions to the contrary for it stands as a silent witness testifying against them. This is the reason the yellow metal is despised by so many Central Banks. It mocks their policies and displays their folly for all the world to see. Central Bankers, being the demigods that they are, will tolerate no rivals to their claims of economic omniscience. You see they have actually come to believe that it is their own wisdom and foresight which enables them to see through the fog that hinders and impedes our economic progress and that they are in a unique position to provide the rest of us with lasting prosperity. They attempt to do this by basically providing or withdrawing liquidity as they in their wisdom judge best and by the setting or manipulation of interest rates.
Those of us who believe that it is free market capitalism and the industry and efforts of mankind that produce wealth and prosperity would beg to differ but that is another story altogether. I would add that it is my opinion that the world would be better off without this plague of locusts that actually devour a nation’s wealth but the fact is that they are here.
While they are here gold will attempt to move in such a manner that it either blesses or curses their policies. Now we all would love to have our policies approved by the vote of the market but what about those times in which the market frowns on our course of action and refuses to smile upon it? Why this is but a simple matter – attack the messenger! If one can somehow manage to keep the price of gold under wrap so that it does not move sharply higher then one can attempt to make the claim that inflation is not a serious problem. The comments usually go something like this:
"Well Jerry, we are looking at the gold price and from what we can see, that while it is definitely higher, it is not soaring out of control. The market may be pricing in some gradual inflation but the action in the gold price is telling us that any fears of inflation getting out of control are definitely unwarranted. Besides, we all agree that some inflation is a good thing because the alternative is deflation and no one wants to see that".
Imagine Fed Chairman Ben Bernanke testifying before Congress saying that the current rise in prices of many goods is only "temporary" and "relatively modest" if the gold price were soaring beyond $1650 and higher! Do you think anyone would take anything that the Chairman said seriously? Copper can soar higher and most will not notice it. Even if it does, it is generally explained as a positive because we are told it is a sign of strong economic growth ahead. Crude oil and energy prices can rocket higher and that can be attributed to geopolitical unrest among oil producing nations. Food can rise sharply and everyone notices that but such things are often explained away by citing weather conditions, supply constraints, etc. but a rising gold price? How does one explain that away?
The only reason that gold has a sustained price rise is because of a lack of confidence in the monetary system. It does not rise sharply because of such things as jewelry demand or industrial demand – it rises when fear, distrust, doubt, suspicion and uncertainty over Central Bank policy reigns. It rises when REAL interest rates are negative and investors understand the insidious process of currency debauchment practiced by these monetary authorities is underway. It thus cries aloud and issues a warning to those who can hear it and what it shouts displeases many Central Bankers because they are among those who while they despise its message, are all too keenly able to hear that message.
Thus the messenger, the prophet, the oracle, must be silenced or at the very least, his message blunted, toned down, marginalized, trivialized by whatever means possible. The mechanism employed to do just this is a subject for another time and place. Suffice it to say for now, without the efforts by the monetary officials of the West to discredit gold, it would be trading considerably higher. Even at that however, the ancient metal of kings refuses to go quietly and docilely into the night. It will yet have the final say.
seems like a profitable silver...
miner would get a little more attention. Good time to build a position.
Jim Sinclair on 3/15/11...
Hello Jim,
I hope your arm is healing well. I spoke with you at the AGM. After reading Monty’s release yesterday I am concerned/interpreting that we should sell our stocks in U.S and Canada. If oil does rise won’t Canada with the so called petro dollar be a place to invest? I am from Canada and am concerned that if Japan’s nuclear situation worsens that the stock markets will crash. Is this his concern? Most of my holdings are in gold and silver.
If you have time I would once again be grateful for your help.
Best Regards
CIGA Giacomo
Dear Giacomo,
If most of your holding are in gold and silver you are not connected to the general equities except for a very short period of time.
Gold will trade at $1650 and better.
Regards,
Jim
still holding all gold and silver...
stocks strong - and will continue to do so. Believe both metals are heading higher.
Chinese Gold Demand Stuns London and Hong Kong Traders...
When asked about Chinese demand Norcini stated, “Your sources have been reporting for months that demand from Asia, particularly China has been staggering, especially as the market has moved lower. This FT story has simply confirmed what King World News has been reporting for months, and that your sources have been accurate.
It’s apparent to me that there has been a very large buyer in the gold market, particularly on moves down towards the low $1,300’s on gold. It is obvious now that China has in fact had an insatiable appetite for gold. This explains why we have had such a huge drop in open interest in the gold market, while gold has only fallen a mere 6%.
Open interest has fallen almost 30%, but as I said gold has only dropped 6%. Normally if you are a short in a market and you start to have an asset correct because of significant liquidation, you will see a precipitous drop in price. Given the sheer volume of contracts that has been liquidated, we should have seen a massive correction in gold. Instead it has stayed incredibly strong. You can see the footprints of the Chinese buyers, it is becoming very obvious to all of the players in the gold market, and this is causing the shorts to have to cover prematurely.
I think the key here Eric is that inflation is roaring out of control in Asia, particularly in China. While the western monetary authorities are doing their best to convince their citizens that inflation is not a serious problem, the reality is quite different. To quote Bernanke, ‘Fear of inflation is overstated.’ The citizens of Asia and other regions are not impressed with such statements. Those people have been buying gold and they will continue buying gold as long as inflation is alive and well and I see no end to that in the foreseeable future.”
As Dan Norcini said, King World News has reported on the massive Asian buying, particularly from China for many months. Norcini knows these markets well, having traded them for over two decades. He is now making note that there has been a significant change in the trading pattern of both the gold and silver markets.
Eric King
KingWorldNews.com
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/2_Chinese_Gold_Demand_Stuns_London_%26_Hong_Kong_Traders.html
holding tough during this...
gold and silver slide - and believing that it's temporary based on historic actions in the previous gold bull run. Note that during that run, gold and silver stocks hit their highs after gold and silver hit highs, so even if a top was hit (which don't think it was), would still expect related stocks to move higher in coming weeks/months.
We'll see - takes mental toughness to hold strong on big dips when sitting on big profits - but...no one really knows what comes next.
still holding strong on all gold and silver...
stocks - which isn't easy as tempted to take some profits and book them for the year - but - resisted thus far.
Waiting for gold at 1650 in early part of next year before evaluating selling.
yes, still holding...
they haven't uncovered the big discovery yet and did some dilution to finance exploration. They give periodic updates on their website that says it all better than I can. I'll continue to hold.
I think things will get real choppy here for gold and silver and their stocks - but I'm going to hold on until gold hits $1650 - that's the plan and sticking to it.
KLSVF @ 0.05, silver company...
that hasn't moved up yet - worth a look. Trades on Toronto stock exchange as KS and US pink sheets as KLSVF.
About Klondike Silver:
Klondike Silver Corp. has assembled a quality portfolio of silver properties in historic mineral districts in North America, and is applying advanced exploration technologies to add value to these core assets. Klondike Silver is reviving the Gowganda and Elk Lake silver camps in Ontario, and the world-famous Klondike district of Yukon Territory. The Company owns a 100 TPD fully operational flotation mill in Sandon, BC, which processes material from local mines in the historic Slocan Silver Camp.
http://www.klondikesilver.com/s/Home.asp
gathered a little more...
in the belief that will go up for their gold and silver in the ground alone. Plus, it has the potential for the big discovery.
believe that Europe will be next to QE...
as the currency wars continue. This will send gold and silver even higher. It ain't over yet.
WOW - what a day...
of the 15 or so gold and silver stocks I own - 13 were up - only a couple of dogs. Overall, the portfolio was up big and it's been a very good year so far.
But...........not even thinking about selling anything until gold gets to around 1,650 - which should happen around Jan-Feb next year - just a few short months away. Plan is to sell some at that time and then re-evaluate what to do from there.
SLW new 52 week high of 28.75...
means another good day - still my largest holding and no plans to sell any time soon.
Holding strong on all...
gold and silver stocks - still believe the big moves are yet to come. Some reassurance of this comes from looking back at charts of these stocks just 2 years ago - most of the share prices were much, much higher and gold and silver were lower. Lots of room to move up to these old levels and beyond.
STRAP YOURSELVES IN - this is going to be HUGE...
originally published October 6th, 2010
We are on the point of a major breakout by Precious Metals stocks that is expected to lead to a powerful rally. The reason that the rally will be powerful is that stocks have been held in restraint since late last year by a zone of very strong resistance in the vicinity of the 2008 highs. This resistance is on the point of being overcome and when it is the last argument that bears are using to justify their position will crumble - namely that of the non-confirmation of gold's continuing new highs by stocks - and they will be forced to cover or face annihilation. This covering should give added fuel to the accelerating rally.
The concern that gold and silver are heavily overbought is of course understandable. However, some of the biggest rallies in markets have commenced with the market breaking out in an overbought state and then running an overbought condition for a long time as it continued higher, with all those who missed the boat waiting for a sizeable reaction that never happens. We are well aware that gold and silver are now extremely overbought on a short-term basis and thus prone to a sharp but relatively shallow “air pocket” reaction which should be bought aggressively, as any such reaction, although unnerving, is likely to be short-lived.
(more)...http://www.clivemaund.com/article.php?art_id=2357
many of those that predicted the crisis...
and that articulate the specific causes - are now saying that gold and silver are going to advance rapidly over the next few months. So, I have loaded up even more today on this dip - especially on SMNPF - which is a silver miner that I believe has a lot of room to the upside. Also bought CDE and EXK. Holding onto a bunch of gold and silver stocks.
The catalyst will by QE 2 which will be announced in the coming days - likely a little bit of QE before the election and a lot after the election.
Truly believe that gold will be near 1650 by Jan-Feb 2011 and silver will be even higher in terms of percent gain as the dollar sinks.
largest holding - SLW - keeps going...
up, along with most others in the portfolio. Plan to hold until gold hits at least 1650.
silver producer - SMNPF...
any thoughts?
Scorpio Mining Corporation (TSX:SPM) is involved in the acquisition, development and exploitation of mineral resource properties, primarily in Mexico, with the objective of becoming a profitable, low-cost, mid-tier silver producer and creating significant growth in shareholder value.
Scorpio's primary asset, the 100% owned Nuestra Señora silver-zinc-lead-copper mine, is located in Sinaloa State, Mexico. The Nuestra Señora completed its commissioning and entered full commercial production in January 2009.
http://www.scorpiomining.com/index.php
News:
0/08/2010 Scorpio Mining Announces Completion of Titan-24 Geophysical Survey - Plans Exploration Drill Program
16/08/2010 Scorpio Announces Second Quarter 2010 Financial Results
22/07/2010 Scorpio Mining Appoints New Chairman
12/07/2010 Scorpio Mining Resumes Normal Milling Throughput
02/07/2010 Scorpio Mining Announces Second Quarter 2010 Guidance
18/05/2010 Scorpio Mining Announces First Quarter 2010 Financial Results
06/05/2010 Scorpio Mining's Drilling at Nuestra Senora Mine Reports 42.2 metres grading 198.03 g/t Silver, 1.37% Copper, 1.98% Lead and 3.35% Zinc
21/04/2010 Scorpio Mining Provides Future Production Outlook
16/04/2010 BTV-Business Television Features Scorpio Mining Corporation
09/04/2010 Scorpio Mining Corporation Clarifies Exercise Price of Incentive Stock Options
07/04/2010 Scorpio Mining Corporation Completes Acquisition of Platte River Gold Inc.
06/04/2010 AMENDED: Scorpio Announces 2009 Year-end and Fourth Quarter Financial Results
01/04/2010 Scorpio Announces 2009 Year-end and Fourth Quarter Financial Results
02/03/2010 Scorpio Appoints Pierre Lacombe, Eng., to the Board
23/02/2010 Scorpio Boosts Q4 2009 Metal Output and Presents Overview of First Year of Commercial Production
17/02/2010 Scorpio Appoints Mexico Country Manager
09/02/2010 Scorpio Announces Results of Shareholder Vote For Platte River Gold Acquisition
13/01/2010 Scorpio Announces Signing of Arrangement Agreement with Platte River Gold Inc.
not a bad 60 degree angle...
move up over the last month and a half. Lots more to go IMO as SLW to become the silver stock leader and start getting lots of mentions on all the financial networks and websites.
gold and silver stocks...
I really don't need to buy anymore - just keep holding what I've got ---- but still looking for the undiscovered ones.
KLSVF.PK and SHSH are some silver stocks that haven't caught the fever yet - but I'm betting they will. Most others I own are all moving up steady.
Sinclair hit the last peak on the nose...
and says he's even more certain of this one - but who knows:
Per Sinclair on Sept. 14th:
Many emails have come in saying there is no way gold can go to $1650 by January. My response to those people is you are WRONG, it can.
Many emails have come in saying the dollar is a safe haven and that I am wrong, it will never see .7200 and lower. My response to those people is you are WRONG, it can.
Many were offended for some reason when I drew the comparison between now and 1979. My response to those people is you are WRONG, the comparison is valid.
this chart is consistent...
with Jim Sinclair's prediction of gold at 1650 by January 2011. I believe it's going to happen.
can only speak to how...
it was handled when SLW bought SVRCF in which case I owned lots of SVRCF in an Ameritrade account. Something similar was said in regards to an actual exchange of stock certificates would take place. I did nothing with the SVRCF shares in my account - and after what seemed like forever - but which was actually about 30 days from the closing, if memory serves - SVRCF disappeared and SLW showed up in my Ameritrade portfolio (lots of SLW of which I'm very happy with).
So as of right now - I plan on doing nothing with my TRGD shares except sitting on them.
agree - oddly, it may even...
help if TRGD becomes deregistered and private as it likely removes some paperwork and regulatory burden to complete the transaction on their part. Should go relatively smooth as public companies buy private companies all the time.
The "plan" seems like a good deal for TRGD shareholders - which is why all the "investigation" PRs are kinda silly IMO since they imply that TRGD shareholders should be getting more. 1 share for 2 works for me. The sooner they get it done the better.
great news!!! eom.
Overdose: The Next Financial Crisis (Movie)...
great movie...
The Golden Decade
By: Peter Schiff, Euro Pacific Capital, Inc.
-- Posted Friday, 6 August 2010
As gold hovers near $1,200 an ounce and pundits speculate about a 'gold bubble', it's important for investors to remember that a mere decade ago the picture was very different. In the year 2000, gold sat at an unimpressive annual average of $279 an ounce - a two-decade low. At that time, most analysts thought gold was finished as a monetary metal. They said its price would never recover and only kooks with tin hats would invest in it. I was one of the very few financial commentators publicly saying that gold was not only viable, but entering a long-term uptrend.
With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow, NASDAQ, and US real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends.
2000's - The Great American Century?
Ten years ago, the United States was the world's largest consumer of energy, house prices were steadily appreciating nationwide, the government was running a budget surplus, and there was widespread consensus that the world had entered a period of Pax Americana - stability brought about by permanent US dominance.
Overseas, the euro was just getting to its feet, no Western country could even imagine facing default, and the only BRICs anyone had heard of were the ones used to build houses. These circumstances were extremely bearish for gold, especially as the dollar was at a multi-year high against other major currencies.
But I correctly perceived that this grand tapestry would quickly unravel.
The Tortoise & The Hare
China started moving toward a market economy in the late 1970s. In the ensuing decades, their economy grew exponentially as more than a billion people won the economic freedom to compete in the world economy. While others were stuck in the Cold War mentality of the US versus the Soviet Union, where the Soviets' collapse guaranteed America's perpetual dominance, I was paying attention to this Chinese freight train that was gaining on us at a million miles an hour.
I saw that while the entire Third World was embracing capitalism, the West was embracing ever more lavish entitlements, ever more debt, and was using inflation to pay for it all. Developing economies were buying many of these new dollars, thus keeping the dollar index deceptively high; but all chickens come home to roost and I knew this inflation would come back to haunt us.
Moreover, all the money printing was creating tremendous distortions in the domestic economy - first the dot-com bubble, then the housing bubble, then the financials bubble, all the way to the current Treasuries bubble.
2010 - The Great American Collapse
Today, China is the world's largest consumer of energy, American house prices are at generational lows, Washington is running deficits in the trillions (an order of magnitude used only sarcastically back in 2000), and the United States is suspending military exercises because they might upset the Chinese government.
Since 2000, the euro became the world's backup reserve currency, Iceland's economy collapsed, Greece averted this fate only by the grace of its neighbors, and savvy American investors have turned to the BRICs for growth and preservation of capital.
This transformation of the global economy, and the turbulence that accompanies it, has been bullish for gold. We have now seen the yellow metal reach new nominal highs, causing former critics to go silent for awhile, then re-emerge claiming there is a 'gold bubble.'
Bubble or Bull?
In response, I will return to the only strategy that ever matters to long-term investors - analyzing the fundamentals. The truth is the fundamental trends haven't changed.
The US government continues to add new spending programs (Obamacare, homebuyers tax credit, extended jobless benefits) and new regulations (1099s for small transactions, bank taxes, credit card fee limits), undermining our competitiveness and driving us deeper into debt. Though the euro has grown up somewhat, it is still too young and too troubled to take the place of the dollar as the world's reserve. The Chinese government has maintained a counterproductive peg between the yuan and the dollar which is only beginning to be relaxed. This process would have to be completed before the Chinese currency could win reserve status.
In short, the dollar is closer than ever to collapse and there is no other national currency ready to take its place. I believe the world may soon discover that there is no better alternative than history's proven money - gold.
Some of you might be familiar with these arguments, and say they are old hat. The same Wall Street analysts who missed the dot-com bubble and the real estate bubble are now warning that gold has already had its run up and is way overvalued. However, they were making this same argument back in 2006, with gold at $600/oz.
Meanwhile, in April of that year, I wrote a commentary with a few personal observations: none of my mining stocks had split, precious metals investors were not rubbing shoulders with real estate moguls or dot-com millionaires, and I was still running my gold investment division with only one employee. On TV, Flip That House wasn't followed by Deal That Gold. My taxi driver wasn't offering me hot bullion tips. In fact, nine out of ten people you stopped on the street couldn't even tell you the current price of gold within $200! And that's still the case today.
A Healthy Appetite For Gold
A decade after gold started its current bull run, we are still at half its inflation-adjusted peak. The run-up has been slow and orderly, with the price consolidated over the last three months at around $1,200. Dips like the recent drop below $1,160 have been correctly identified as bargain buying opportunities.
Despite a long rally without a major reversal, Wall Street aurophobes still refuse to see gold as a good investment; but they were wrong on the fundamentals in 2000, and the fundamentals haven't changed. As the world edges closer to the collapse of the US dollar system, gold prices have nowhere to go but up.
I continue to recommend that investors hold five to ten percent of their wealth in physical precious metals. Aside from the likelihood that gold and silver will rise in price, precious metals offer timeless benefits, such as financial privacy, elimination of counter-party risk (if you store them yourself), as well as protection from government confiscation, onerous securities regulation, and punitive tax rates.
Unfortunately, there are a lot of scammers out there who take advantage of rational interest in gold coins to sell people irrational investments. That is why I am so proud to finally offer a straightforward, ethical, no-gimmicks way to buy gold and silver coins and bullion, Euro Pacific Precious Metals. My company does not sell numismatics, proof sets, commemoratives, leveraged contracts, or any product that distracts from our goal: preservation of your capital. I encourage you to add precious metals to your portfolio now, because those waiting for a big correction before coming aboard may just miss the train entirely.