Lawrence Roulston of Resource Opportunities discusses the market turn around that is happening in a portion of the resource industry
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Thanks Lawrence – ever persuasive and ever modest!
AL bay bay now more franky tanks all !
Housing, PMS, the economy. http://www.financialsense.com/contributors/steve-angelo/precious-metals-rise-economic-recovery-disintegrates
A Dow retreat to 12000, while significant, is note really that big a deal after the run-up we’ve had.
If that’s all we get the doomsday warnings will be wrong. Now Dow 6000, that’s a different story.
AS for the Junior market, I think the juniors will only return when gold moves strongly above its old high and stays there for some time. The risk is still too high for me to want to jump in yet.
I have to disagree to an extent. Yes, the juniors will really take off once gold moves to a new high, but for those who bought the recent lows, they have already “returned.” Many have more than doubled. I believe that the good ones will triple to quintuple on gold’s climb to new highs.
Buying quality cashed-up juniors while gold is trading at the average production cost is as low risk as it gets, especially while demand continues to rise.
Most people thought that gold was LOW risk as it spiked to $1923 in 2011. Most people also thought that gold was HIGH risk as it spiked (down) to $1179 in 2013. Most people are wrong.
To me these days a 20% haircut hurts,I will move in and out rather than buy a and hold. I might even subscribe to Matthew’s letter, he has made all the right moves even as the paid pros got it all wrong.
To “move in and out” works just fine with senior miners, but can be very difficult and very expensive to attempt with the juniors. It is far better that you recognize what few sheeple do: that no one has a crystal ball and that you should, therefore, learn to manage risk and figure out just how much risk you are comfortable with.
I can assure you that the pros did not get it all wrong. Here’s a little clue. Take a look at the massive rise in volume when the sheeple get terrified and dump everything. Now who do you think is happily taking those shares off their hands? You do realize that someone has to buy before they can sell, don’t you?
If you have no strategy, no vision, no conviction, and cannot handle significant drawdowns, you should not speculate in junior miners. Until you understand the difference between price and value, you are unlikely to compete with real speculators. Example: Price reflects market sentiment far better than fair value, most of the time. If you are always comfortable when you buy and comfortable when you sell, there is a good chance that you aren’t making much money.
Yes, but what’s a quality junior? NOt always easy to tell even with the bounce.
And that bounce still has these stock 50%+ off their prev 2011 levels.
I don’t base a junior’s quality on any bounce. I base it on their assets, political risk, cash, etc. I look for projects that have captured the interest of a larger miner who is willing to spend a lot of money to earn an interest. High insider ownership and a star management team is also a good indicator.
Many will disagree, but having a lot of cash in the current environment is probably just as important as having a quality deposit. Speculative interest will return and take care of the rest.
Remember, if you are bullish on the future price of gold, the companies with higher all-in costs will outperform the other, safer companies. A company currently netting $50/oz would see its profits triple if gold went up just $100. On the other hand, a safer company with much lower costs currently netting $500/oz would see its profits rise just 20% if gold went up $100. The shares of the first company would likely triple or better while the shares of the second company would probably go up 20% or better. The first company would also enjoy a much bigger drop in perceived risk since it was much closer to being “mothballed” at the lows. This drop in perceived risk would also probably boost the share price.
The correction has restored option-like leverage to the miners. That is the bright side for those who have taken a beating.
I think the juniors will hit new gold highs before they hit new dollar highs, and that is a good thing.
John doody, watch out!
Wrong comparison. Doody doesn’t play in real juniors. Accuracy is never the domain of snivelers.
Very astute comment, Matthew. Thank you!
By the way, I share Al’s very high opinion of Lawrence Roulston.
Yep, a good guy Matthew!
sory fukushima al have a luk when yo have time is very bead !