-- Posted Sunday, 8 July 2007 | Digg This Article
It would appear to have been a long seven months as gold and silver continue to build bases. There are many long faces out there due to downward stock chart channels and hence the title which happens to be the title of a golden oldie: Good Time Charlies Got the Blues. If sentiment has been any indicator, many of the “Good Time Charlies” do indeed have the Blues.
Nevertheless, I think it’s time to reestablish our positions in the junior gold and silver mining companies. What separates the men from the boys is research, patience, and to some extent capital. I mention capital because Americans are frightfully in debt and if you need money, you need money. Often times one is simply required to sell assets to raise capital. This scenario could be due to a medical emergency, loss of employment, divorce, and all manner of other unanticipated events. In that case, I extend my sympathies and wish you are back on your feet quickly.
However, if you are currently selling your “junior assets” because you are weary of the markets going nowhere, then I personally believe you are making a mistake because you are most likely selling at the bottom. Unfortunately, that is frequently the trend: buy high, sell low. I just hate when that happens. Don’t ever forget that the bull shakes off as many investors as possible on the way up and the bear does exactly the opposite: the more the merrier—on the way down.
All other things being equal, I personally believe it is time to get back into the game if indeed you have sold out. Overall, the physical price of gold and silver are down, but nothing like the junior mining companies that have been hacked and whacked again and again. Believe it or not, $650 gold is not that bad. Several years ago, $650 gold would have been considered Nirvana! Let’s keep things in perspective.
The other side of that coin is gold “should be” at $850 or higher and silver at $20.00. Even though there are dollars sloshing around the system, it’s funny money. Recently I was speaking to a highly respected geologist and a good friend. I was told that there was endemic “burn-out” in the industry and everyone is exhausted. Personally, I believe this has as much to do with pushing the boulder up the mountain and then having certain governments manage the price of gold to the extent that the quality juniors just can’t get no respect—a bit like Rodney Dangerfield. They will. This time it may take a bit longer, but nothing will prevent a primary bull market from extracting its own revenge on those who would manage it for their own personal agendas.
But it is a far worse thing we are witnessing aside from gold being managed. Our liberties are also being managed. America had better wake up because time is running short. Goldseek is posting many excellent writers. Jim Willie is one of them and in his recent piece Garbage Bonds and Bonfires, found here on Goldseek a few days back, he writes: “Citizens in the Untied States have never seen such a broad, deep, palpable threat to their liberty, this time from within, in terms of the system and its leadership. Dependence, the opposite of the celebrated theme, is running strong. The corporate agenda takes a one-day holiday. Refer to waging war, deceiving the masses, selling out the Middle Class, undermining the institutions, and rendering any threat to systemic reform as anti-business or unpatriotic.”
Want to Get Rich?
When the market starts its run again towards $700, which I believe will occur within the next 90 days, we are all going to be stunned by the gains to be made in our favorite junior mining stocks.
I am not a big fan of hyperbole and of course we all have visions of getting rich off of one thing or another. However, “Want to Get Rich?” will attract your attention. I think now may just be the time to implement your investment ideas if you are planning on doing it via the metals markets.
Ladies and Gentlemen, now is the time to be buying these junior mining companies in order to put the scenario in the correct order; we want to buy low and sell high—not the other way around. Some folks are already well on their way to making their fortunes. If that is indeed the case, I can almost guarantee you that two things will have occurred. Those investors will have sizeable positions in a few companies in which they have performed their due diligence, aka known as research. I would also think that those folks will have practiced patience and allowed those companies in which they hold an interest sufficient time to implement their full business plans. This can take many years but when the gains are amortized over extensive periods of time, it would not be uncommon to witness 20% per annum gains.
In some cases you will see a few “ten and twenty baggers”—the dream of all speculators!
I had a friend email me the other day, wondering about Madison Minerals. I believe there was some frustration talking and I can’t blame him. But Madison is still one of my favorite companies because of three things. First they have proven results right next door to Newmont’s Phoenix Fortitude Complex. Secondly they have management that understands the nature of the junior mining sector and thirdly they will soon be drilling again on their Lewis Property in Nevada.
Many many companies are in the same boat. Good Projects, excellent management, and a depressed share price.
As we’ve continued to wait quietly as the precious metals markets work themselves through these summer doldrums, we are consistently receiving comments about how this gold market is going into the drink—as pirates would say. And there are a good many pirates out there.
However, considering how the other major markets are working their way through the summer, I’m thinking we may receive some pleasant surprises from the commodity markets before too very long.
Many of my favorite analysts believe that the general markets are going to go ballistic—the “blow off stage” in the parlance of the cyclic analysts. Me, well, I’m not so sure. The market always does what the majority thinks it will not do or put another way, the markets will surprise most of the people most of the time. Put another way, Mr. Market will do what he wants when he wants and it usually is contrary to popular thinking. There is one caveat here. Never in the history of the markets have things been so, managed. Mr. Market is no longer master of his own destiny. He now has a plethora of governments, pirates, and other various and sundry entities pushing him in one direction or the other. The old axiom of the market looking out six months doesn’t seem to apply any longer. If we’re lucky, the market might be left unattended long enough to look out from the opening until 11 AM EST.
So, in this kind of a conflicting environment, who the heck wants to know about highly leveraged junior mining stocks? Well, for one—I do!
The one thing we still can count on is that gold and to some extent silver, are political metals. As such these bull markets will react wildly, wickedly with apparently no rhyme or reason. But there is rhyme and reason if we understand the political repercussions of the world’s oldest and still most reliable currency.
The Bull Market in Gold is still very much in tact and indeed we must remember that these wild machinations are the end result of some very serious tugging and pushing in different directions by the various factions who have their own special interests and defined turf to protect.
If we return to basics, we must remember that gold and silver have always been the barometer of inflation. Years ago, via Gibson’s Paradox, the plan was laid out to break the thermometer and keep the American-International Public in the dark. We are still being essentially informed that all is well unless you have to eat, drive, and require a place to live, or well use energy in any form. Most importantly, the US government does indeed save a great deal of US dollars (that other countries apparently are being less attracted to) by keeping the COLA’s or cost of living increases to a bear minimum. These are the colas that were supposed to protect the Greatest Generation from inflationary pressure—those are the folks that fought WW II. I shall say no more.
The Tip of the Ice berg is melting
Several weeks ago, the entire matter with regards to the Bear Sterns hedge fund fiasco could have been the tip of the iceberg. Hence the 185 point drop in the Dow. We have to understand that the PPT was sedulously endeavoring to prevent such a drop so when that kind of drop does occur, major forces are at play, er, work and they are not being successful.
I keep counseling Patience, but perhaps patience is simply not enough. I am ever more convinced that great fortunes are currently being made in the gold and silver markets. Great fortunes are being made in the Copper, Uranium, and molybdenum markets. We simply must stay abreast of the “wave” and not get too far ahead of it or too far behind it.
I think the people railing against the injustices of the system (and I of course, am one of them) have to realize that the die is cast. It is simply a difficult effort to sit back and wait for this iconoclastic Shakespearean farce /tragedy to show its true colors.
I don’t want to keep harping on the same old things but the same old things are not being resolved. Hence we are left with the same old unanswered questions.
Debt is the overriding shadow that affects every aspect of our current state of affairs on every level. Debt seems to be the one thing that receives the least bit off attention; especially since it affects such a huge component of our country’s future.
Money will always go where it is treated best—not necessarily where it is the safest or where it offers the maximum yield or where it compounds annually at the best rates.
I ended the last article titled Political Commentary and Market Updates with a list of Junior Mining Companies which I find well placed for the long run. Below is the last paragraph from that Article. We’ll pick up where we left off with the premise that there are some excellent “buys” out there.
A Review of Some of Our “Junior” Investment Ideas
Recently, there have been some excellent buys in the junior mining sector. If you believe as I do that gold will soon break $700 to the upside, might I suggest:
1. Oromin Resources (OLEPF.OTC)
2. Madison Minerals (MMRSF.OTC)
3. Geocom Resources (GOCM.OTC)
4. Scorpio Mining (SMX.CA)
5. Samex Mining (SMXMF.OTC)
6. Buffalo Gold (BYBUF.OTC)
7. Golden Phoenix (GPXM.OTC) {Molybdenum, Gold and Silver}
8. Win-Eldrich (WEX.V) {Molybdenum}
These are investment ideas of the “high risk-high reward” variety. I have recommended many of them in the past. I shall be doing additional write-ups on many of them in the near future. Some of the prices have been off due to a lack of bids, not a deluge of selling.
I still believe that Oromin Resources has a very bright future and the recent press release appears to bear that out. Madison Minerals is another one that has gotten into the realm of the “ridiculously inexpensive” especially given their assets. Geocom is still another to review carefully.
But these ideas are just one man’s opinion and you need to do your own due diligence. I believe that the share prices of these companies will move substantially higher as soon as gold takes out that $700 level—even the silver plays.
If you’d like to be added to our mailing list, please do send your name and address to consulting@seacoastpub.com. All information is kept in the strictest of confidence.
I will soon be launching www.seacoastconsulting.com which is currently under construction. It will be a free site and allow me to post shorter articles in a more timely fashion.
After all it is the summer doldrums and I’ve been taking advantage of them.
Until Next Time,
D. Stewart Armstrong
Disclosure and Disclaimer by the Author: In the spirit of full disclosure, although D. Stewart Armstrong, Seacoast Consulting, and or Seacoast Publishing, are independent entities, they may be employed by this particular company, may own shares in this company, and this company may be an advertiser on GoldSeeek.com which is an internet site in which the author is consistently involved. Although the author is an independent analyst, he is also a paid consultant by the Junior Mining and Exploration Sector. The author is a private investor in the precious metals markets. He is not a board qualified or licensed investment advisor. All material is deemed to be accurate and to have been gleaned from reliable sources in a timely fashion; but said material cannot be construed as being totally complete or absolute. Any foreword looking statements must be considered as such and taken into account. Consequently, the aforementioned parties can take no responsibility for any investment decisions you make or the results thereof. The author does not accept responsibility for any possible errors in calculations disseminated by any company he represents or in which he is involved, nor does he guarantee or insinuate any type of investment results. Consider any and all recommendations as personal opinions on the part of the author. It is highly recommended, and even insisted by the author, that investors, individuals, and all interested parties, conduct their own due diligence before becoming involved in any investment or with the interests of any company mentioned. That process would include direct contact with the company to confirm any facts, opinions, or ideas represented by these companies in general or on any Company CD’s distributed and referred to in these articles. The author would suggest the possibility of hiring professional advice from a certified investment advisor before making any investment transactions. Again, please consider these articles as opinions and please understand that investing in Junior Mining Companies is a high-risk, high reward proposition and you must take full responsibility for your own actions because there is always the possibility of losing all or a portion of your investment capital. This disclaimer applies to this article, Email correspondences, and all communications with both public and private entities. This disclaimer is applicable to all articles and communications published previously and to ones to be published in the future.
-- Posted Sunday, 8 July 2007 | Digg This Article
