Good discussion bb & Silverdollar. I personally don’t believe gold will get down to $700-$800, but I’m looking at companies that can survive at $1000 Gold and $14 Silver.

As for diversification, I agree with Chris and Al, but I don’t think most people are qualified to be portfolio managers, and that is what Mutual Funds are for. You can get low risk, or high growth, or micro cap, or emerging market Mutual funds that will keep you diversified. There are also financial planners if you want a portfolio to managed with people that do that 24-7. Again, most people can’t study every sector simultaneously to follow everything, so they hire and expert, or just get a few mutual funds (that is all that 401k or IRA typically have in them other than bonds anyway, and now we also have ETFs that are like mutual funds in that they are diversified within a sector).

Chris Temple made the point that you wouldn’t want a department store that just sold shoes without the other items, but I with differ with that opinion in that there are businesses called “shoe stores” that only sell shoes and they are quite successful. There are companies that just sell computers, or flowers, or suits, or cars. That’s called having a focus. Some restaurants offer multiple types of food (like TGI Fridays or Ruby Tuesdays) and that is a model that works, but some just sell pizza or subs or coffee, and they are also quite successful. Both models work.

The commodity sector has been in a 7 year bear, and CRB index will be bottoming over the next few months, as mentioned at the beginning of this year. The PM bear market is just getting to the 4 year mark and will be bottoming along with the commodities and will likely come out of the gate first if the turds hit the fan in the fall.

This is a perfect time to be diversified in many sectors to spread the risk; however, for a small percentage of ones assets the commodities and energy sector will offer much more upside than the general markets over the next few years. For those that can identify quality companies in this sector this year and hold those stocks for 3 years, versus McDonald’s, the commodities are going to outperform 3-1.

There are thousands of investing sites that cover Apple, Dell, McDonalds, tech stocks & social media, bio tech, healthcare, utilities, dividend paying blue chips, airlines, etc…. There are a fair amount that cover energy (mostly Oil, some coal, Solar, Wind, and much fewer cover Nuclear or new forms of Green energy)…..There are very few any more that seriously cover the Precious Metals, Mining, and exploration in energy. This is what always stands out about the KER report.

Your favorite sites section has many of the remaining sites that have survived or tried to survive this 4 year bear, and they’ll all double or triple in readership size once this sector rebounds over the next few years. At that point tons on new Precious metals sites will pop up trying to get in on the action.

I’d rather focus my “Speculative” money on the commodities (miners) and energy (small producers and exploration) stocks that are just beat up bad (having lost 60-90% of their value), and ride up the next wave of the Secular Bull market in PMs.

To me the biggest signs we are nearing a bottom in the Commodity and Energy sectors, other than the bankruptcies and M&A activity continuing to pick up, is everyone that is starting to jump ship at the worst time (the bottom). That’s how it is at any bottom though. When half of the miners switched to marijuana or biotech, and commodity experts like Frank Holmes start an ETF called (JETS) on the airline industry, then we are getting near the bottom. When PM focused sites, start plugging all kinds of unrelated stocks, then they cease to be a “Shoe Store” or “coffee shop” or “pizza place” and have decided to become a Walmart, or Dollar General. This means they have changed their business model. It may work and it may not work, but you’ll be competing with the “Walmarts” of the investing world.

Just a thought.

I keep hearing about Gold Canyon Resources but honestly am not familiar with them. Thanks for the heads up John K – I’m going to check them out.

PS – I responded to you below on UCore and a few other specialty metals and rare earth companies that are about at rock bottom and may be worth following now.

I don’t believe they were to “help” lending in the least, banks are hoarding more cash than can be counted now, check the profits. BMO,RBC etc

Lower interest rates create bubbles, we already have one in housing. Supposedly.

Anyway, that’s what they say they are trying to “balance”, so, the rate cut is not really a done deal.

Any variation in interest rates in Canada has little effect on mining companies.
Almost all mining companies that finance are at Libor +x%, where the x depends on the collateral and prospects of the company.

Yes, John K. I am familiar with Ucore and believe that they are one of a handful of rare earth companies that may actually make it longer term.

Just to clarify, while I absolutely believe in being diversified (and I am in my retirement account full of a bunch of typical Mutual Funds and a small amount of bonds), I also see the value of FOCUS in life, and in investing. I let others handle my retirement account, and on my “Trading Account” I believe in Focus, and in investing in what one understands. For examle – I don’t understand Bio-tech, so if I want exposure I just use the ETF (IBB).

So from a Macro sense, I absolutely agree you can’t go walking around with blinders on, but if you want to really understand something, then you do need to lock in and really study it for small bursts of time. Think Martial Arts – you can’t study every discipline all at the same time or you’ll be a mess. You need to pick Karate, Judo, Kung-Fu, whatever, and master about 7-10 moves.

Over the years, I have studied commodities and the companies that extract them. That is the primary focus in my speculative Trading account.

Just my 2 cents.

Good luck to you John K in your investing. Please keep sharing the good investment ideas.

p.s – for Rare Earths & Specialty metals here are a few others to check out: Avalon Rare Metals, Alkane Resources, Tasman Metals, Matamec, Commerce Resources, Niocorp, Rare Element Resources, IBC Advanced Alloys, Arafura Resources, Frontier Rare Earths, Quest Rare Minerals, and Iluka Resources.

Best to you!

should have said pop in metals miners (aka: GDXJ, and GDX)