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One Month Ago

first_img One Month Ago Rock & Stock Stats Last One Year Ago Silver Stocks (SIL) 18.24 21.11 24.05 Gold Producers (GDX) 37.11 42.32 53.32 Louis James Senior Metals Investment Strategist Casey Research TSX Venture 1,117.85 1,205.81 1,634.34 Gold 1,575.10 1,666.90 1,698.70 Copper 3.52 3.76 3.79center_img Silver 28.81 31.44 33.83 Gold Junior Stocks (GDXJ) 16.10 18.51 26.98 Oil 91.56 95.72 106.58 TSX (Toronto Stock Exchange) 12,835.61 12,801.23 12,461.93 A company that we call an “exploration play with cash flow announced excellent drill results last week. BIG GOLD This gold producer has found itself in a catfight with another company for an acquisition. Here’s our take. Winning By Louis James Have you ever heard of a national or international champion baseball, football, or basketball team that won every single game it played in a season? How often does even the best tennis player win every set in a match, or every match on his or her way to a championship? Or even within a single game, how often does one side win every possession or score every point? To the sports fans among us – please don’t send me answers to these questions: they are rhetorical. The point is to recognize and accept that setbacks are normal, even on the way to the greatest victories. Further, lower-ranked teams can and do beat top-ranked competitors. Similarly, outnumbered military forces can win battles, and dark-horse candidates can win elections. The main attribute of a winner is not necessarily superiority but perseverance. It helps to be right, of course, to be the best – but many people are completely in the right, or are very strong, and still fail. Failure, alas, is all too common. Courage in the face of adversity is not – and that’s why real champions are so rare, and so rightly admired. Shifting gears to the world of finance, let me ask: what prices move in straight lines? Only prices set by policy. In a market, prices fluctuate – as well they should – in response to changes in costs, demand, and myriad other factors. This isn’t just normal, it’s necessary (and government attempts to prevent it always lead to disaster, sooner or later). The Imperative Combine these truths – what it takes to be a winner, and the imperative of free-market price discovery – and you can see where I find the courage to be a contrarian. In order to win, one must be able to overcome obstacles and deal with setbacks. Perfection is not required – which is a good thing, as no mortal ever is. What is required is the courage to endure – to stick with the game plan and see it through. You’ve heard it before, so I won’t repeat the whole story of the 2008 crash. I will simply reiterate that what truly distressed me the most was the wholesale panic among people who should have known better and ended up inverting the “buy low, sell high” formula. My friends – and I have met enough of you at conferences or have exchanged emails with enough of you that I do consider you my friends – we have a game plan that is tried and true. Part of this plan is an expectation that prices will fluctuate – greatly. Doug Casey was neither kidding nor exaggerating when he called our stocks the most volatile on earth. This is why we buy in tranches and prepare stink bids for big fluctuations. Well, we’ve got a big fluctuation on our hands, so it’s time to go hunting with stink-bid bullets and see if we can bag ourselves some big game. It is precisely when others are panicking that courage offers its greatest rewards. Critical Point: Price and value are not the same thing. That a given stock is up or down when the whole market sector is up or down means absolutely nothing about the merit of the particular play. If the stock is higher and the value of the company hasn’t changed, that’s a signal to consider taking profits. If the stock is lower and the value hasn’t changed, that’s a signal to consider buying more. It’s the very fact that price and value often differ that makes speculation possible. And that’s really what the International Speculator is all about. It is precisely at times like the present when Doug Casey, Rick Rule, and even yours truly have made the most money. We are and will be putting our own money into the market, just as we’re recommending you do. If we’re wrong, we will take the same losses. But we expect to be right, and we expect those who place their bets alongside us to make a fortune. Literally. Short version: If you want to win, you must stay the course. Gold and Silver HEADLINES American Eagle Early 2013 Gold Bullion Coin Sales Soar (Mineweb) The US Mint reports that gold bullion coin sales increased a whopping 283% this February to 80,500 ounces. Gold coin sales in the first two months reached 230,500 ounces, up 56% compared to the same period of 2012. Silver coin sales grew 127% year-on-year in February 2013 (3.4 million ounces and 1.5 million ounces respectively). On one hand, we have a lot of informational noise about the end of gold bull market. On the other hand, bullion sales suggest demand isn’t letting up. And you know our viewpoint: we think buying on dips is wise. China Reserves Ample to Buy World’s Gold Twice (Bloomberg) In its Chart of the Day, Bloomberg shows that China’s foreign currency reserves have soared more than 700% since 2004 and now surpass the value of all official bullion holdings by a factor of two. About two-thirds of China’s US$3.3-trillion assets are dollar-denominated, with another 25% in euros. At the end of 2012, this amount accounted for 30.2% of the world’s total, compared with 14% in the beginning of 2004. There is a lot of speculation on how these reserves may be utilized. Diversification into gold is very probable, yet not officially documented, as Chinese authorities do not report their gold reserves regularly. We have only indirect evidence that this process continues – growing gold demand within the country that involves massive imports, while the country is itself the biggest gold producer and lets little of the gold mined to leave the country. Infographics on a History of Gold Confiscation (Mining.com) Mining.com has created an infographic providing background on historical precedents of gold confiscation that turned out to be a not-so-uncommon practice when push came to shove. Visualizing All the Silver in the World (Zero Hedge) This infographic “visualizes the 1.411 million tonnes of silver that has been mined in history, and compares that to the world government reserve holdings (and gold).” This Week in International Speculator and BIG GOLD – Key Updates for Subscribers International Speculator One of our favorite exploration-stage companies announced a deal that provides a lot of upside exposure to its shareholders. Dear Reader, I traveled to Toronto last week for the Prospectors & Developers Association of Canada conference, the biggest metals and mining conference of the year. As usual, it was packed, with tens of thousands of attendees. But that was the only usual thing about it. Some companies reported getting no traffic to their booths – a ghost town with 30,000 ghosts. Some companies reported high traffic, though a fair amount of that came from other company people looking to sell something and professionals in the field looking for work. I didn’t see any fisticuffs, but I hear there were quite a few angry investors around as well. A few companies did report having a good show. More striking to me was that all the companies I saw were peddling their stories with such energetic optimism, one might imagine that the bull had regained his stride and that they were all on their way to happy endings. This is such a disconnect with the lack of financing in the junior resource sector that I felt as though I were attending a Las Vegas magic show; nothing could be what it seemed. There are not many conclusions to draw from this, but there is one important one: our market is weak and depressed, but it has not yet reached the point of capitulation. There was just too much optimism in the air at PDAC for that to be so. And that means, I’m sorry to say, that the market is vulnerable to much stronger correction if the prices of the underlying commodities – gold in particular – take another, and perhaps larger, drop in the weeks and months ahead. What to do? Well, the good news is that if precious metals lose their “safe haven” luster based on good news on the economy, that should be good for our base metals and industrial minerals picks. The better news, for those who have the courage, is that there might be some terrific buying opportunities yet ahead. The bad news is that many will be spooked into realizing losses they don’t have to – and should not – take. This is my great concern today, and for this reason, I want to share the introduction to the current issue of the International Speculator with all Daily Dispatch readers. I’ve been told by readers that the perspective is an important one, and something everyone in the market should consider. I hope you find it useful. Sincerely,last_img

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