Brian Leni - Founder of Junior Stock Review – Thu 16 Apr, 2020

Balancing fear in the markets with major gold miners and royalty companies breaking to recent highs

Brian Leni joins me today to share his thought on the performance of the large gold stocks balanced with his assessment of an economic restart.

There remains little clarity on how and when economies will get back on track however optimism in the markets has swung drastically over the past month. It’s all a confidence game, even for the precious metals.

Click here to visit Brian’s website and follow along with his opinions on stocks and markets.

In case you missed it there is a special webinar coming up with Revival Gold next Monday, April 20th. Click here to sign up and attend the live event. You will also have first access to the recording.


Comments:
  1. On April 16, 2020 at 11:31 am,
    Matthew says:

    My little Scorpio is up 38% this week (was 60% this morning):
    https://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=5&mn=0&dy=0&id=p28395116424&a=478858973

    • On April 16, 2020 at 11:37 am,
      Matthew says:
      • On April 17, 2020 at 2:01 am,
        Excelsior says:

        Yes, saw that when I looked at my little Scorpio performance as well.

        Most of the miners have really rallied hard the last few weeks, with the majority up 50-100% in the last few weeks. Truly a strong rebound out of the mid-March lows.

        • On April 17, 2020 at 2:12 am,
          Excelsior says:

          Just a quick glance at the GDXJ, which has bounced up nearly 100% off it’s mid-March lows shows how well the miners have recovered since the ridiculously oversold conditions we just saw.

          http://schrts.co/UhyJUdaq

          • On April 17, 2020 at 2:16 am,
            Excelsior says:

            I’m thrilled that through a combination of solid swing trades and market recovery, that my trading account is now finally a little higher than where it was in late February.

            Granted, it looks like the metals are due for a pause and corrective move for a short period, but it feels good to have made more than a full recovery in just one month. Crazy action out there in these markets!

  2. On April 16, 2020 at 1:01 pm,
    Charles says:

    Bought some additional shares of Brixton yesterday on the pull back and I am ready to buy more if the stock drops further.

  3. On April 16, 2020 at 1:29 pm,
    Charles says:

    I particularly like those weekly charts. The indicators look like the are in good position for an advance.

  4. On April 16, 2020 at 1:46 pm,
    bonzo says:

    Brian Leni thinks FNV looks overvalued. It looked overvalued when I bought it at 25, but I’m glad I bought it and never sold. I’ll sell when Pierre Lassonde sells.

    • On April 16, 2020 at 3:43 pm,
      Matthew says:

      I agree with Leni. FNV is trading at a PE that is 3 times that of Newmont and has a price-to-book that is 50% higher than Newmont BUT it looks technically bound for 170-180 during the next move up for the sector. A roughly 50% gain at a risk level that has to be better than Newmont’s.

      https://stockcharts.com/h-sc/ui?s=FNV&p=W&yr=5&mn=0&dy=0&id=p95768794724&a=739324969

      • On April 16, 2020 at 3:56 pm,
        Matthew says:

        Isn’t it interesting how FNV pulled back right to giant volume-based support? Considering where gold is ultimately going, it is heading for unbelievable heights long term.

        • On April 16, 2020 at 3:59 pm,
          Charles says:

          I have been scaling out of my FNV for smaller more growth oriented royalties, but maybe I let the last little bit ride the next wave up.

          • On April 16, 2020 at 4:18 pm,
            Matthew says:

            I would also scale out to buy items with more upside (and risk).
            As they say, know thyself.

      • On April 17, 2020 at 12:15 am,
        Excelsior says:

        Franco Nevada also has exposure to a hundred other assets that Newmont does, with far less operational risk, far less employees, far less overhead & costs, and so while Newmont is one of the largest Gold miners, Franco Nevada has exposure to dozens of the largest Gold miners & Base Metals & Energy companies assets and production.

        The rise FNV has had off the Dec 2015 lows in the PM sector to todays heights is staggering, but as the metals prices and their production profile through streams and royalties continues to grow, then their shareprice still has room to run.

        It is a more conservative “blue chip” in PM sector, and achieves a different investing strategy than the more risky 1-off mining companies, but of course, personally, I love investing in the riskier individual mining companies for the greater potential upside torque.

        Still the move up in FNV has been staggering. The 21 week EMA has a been a good tool to manage bullish vs bearish trends in the stock.

        http://schrts.co/KTwzzqqw

        • On April 17, 2020 at 12:37 am,
          Excelsior says:

          This is a good post from a contributor over at ceo.ca (@ctoivo) on the outperformance of an individual explorer and developer that I hold for their exploration upside now that they own the mining rights to the entire caldera in Fiji – Lion One Metals.

          His post makes a similar point in how the smaller stock have more torque to the upside and downside than Gold, or the ETFs, or larger Majors like KL.

          __________________________________________________________________

          @ctoivo – “Here’s a chart of the percentage change in the past 6 weeks of Lion in the shaded blue, plus, GDX, GDXJ, Kirkland Lake as an intermediate gold producer representative, and Great Bear (the current (for now) sweetheart of the explorer rodeo. Since the precipitous nose dive that Lion and almost all of the others took when some folks were frantically hitting their ‘sell at market’ buttons, LIO has certainly held its own.”

          “The gold price (in purple across the top) obviously calls the tune.”

          “Like many here, I don’t believe the stock markets yet reflect the economic carnage going on, and believe the gold price will rise. There will be a lot of investors looking to gold bullion as a safe haven, gold majors for leverage, and then some savvy investors, (like a lot of folks here 😉 who will be looking for extra-ordinary returns from a great investment in the best risk/reward, blue sky, explorer/miner play that’s out there.”

          http://cdn.ceo.ca/1f9i7h4-april%2016%20chart.MHT

        • On April 17, 2020 at 12:45 am,
          Matthew says:

          I wouldn’t call a triple staggering, especially in 4 years. KL is a good example of staggering but even it got its butt kicked by a lot of juniors during the 2016 move. The difference is that it kept going while most of the sector pulled back.

          On average, the miners will always beat the royalty companies during strong bull market moves. In 2016, for example, FNV didn’t even manage a double while NEM tripled and Barrick quadrupled. A double is typically great but that year it was a miserable showing.

          Measuring from the lows last May, FNV is up 80% while NEM is up 105% and Barrick is up 117%.
          Since bottoming on 3/16: FNV=60%, NEM=81%, Barrick=98%

          • On April 17, 2020 at 1:34 am,
            Excelsior says:

            Compared to what generalist investors have made in their mutual funds or retirement funds over 4 years, then I’d call a triple in a 33 Billion company staggering in comparison.

            Now again, if comparing a royalty company to an individual miner, that is more par for the course, but they are different business models and totally different risk profiles, so they aren’t really comparable in that sense. It makes more sense to compare miners to miners and royalty companies to royalty companies.

            It would be the exact same in the Oil patch…. an Oil royalties company is completely different than a single company producer, developer, or explorer of Oil.

            Different business model, different cost structures, different jurisdiction risk profiles, and apples and oranges.

          • On April 17, 2020 at 1:37 am,
            Excelsior says:

            Of course individual miners (with far more operational risks, environmental risks, labor risks, and jurisdiction risks) are going to be able to outperform a more diversified, lower cost, lower risk basket of royalties, but they also blasted down way past the royalty companies to the downside.

            As we’ve discussed many times, the purpose of a royalties company in one’s portfolio, and the type of investor risk profile that positions in them, is much different than say an investor with a basket of smaller producers, developers and explorers, or even the larger producers for that matter.

          • On April 17, 2020 at 1:42 am,
            Matthew says:

            It makes sense to compare any and all investments as long as the differences are accounted for and the differences between royalty companies and miners are very straight forward.

          • On April 17, 2020 at 1:47 am,
            Matthew says:

            More upside = more downside. Not a problem if one knows how to sell strength. The average retail guy wants big upside but can’t handle the downside that comes with it. It’s called ignorance.

          • On April 17, 2020 at 1:50 am,
            Excelsior says:

            Nobody has ever disputed that individual miners can outperform a well diversified royalty company, but that would be like saying look at how this Tech company or Healthcare company crushed a diversified DOW or S&P index. They aren’t the same kind of risk exposure in the slightest.

            Franco Nevada has:

            – 56 Producing metals deposits with production and payment streams off of

            – 34 Advanced development deposits for near-term production

            – 206 Exploration deposits for future development & production

            > That is 296 Metals projects in their portfolio across the globe (there are NO MINERS with that kind of diversification)

            > In addition they have 56 Energy royalties and streams that are producing, and 23 more in exploration/development phase for another 79 assets in the energy space.

            There are no single miners with any of the that kind of exposure.

            Different business models, different risks, different goals and outcomes for returns, and dividend payments, which also need to be considered along with share price returns. Most Jr miners have no dividends at all.

      • On April 17, 2020 at 1:39 am,
        Excelsior says:

        speaking of Newmont…

        Newmont says gold could top $2,000 on stimulus

        Bloomberg News | April 16, 2020

        https://www.mining.com/web/newmont-says-gold-could-top-2000-on-stimulus/

        • On April 17, 2020 at 7:17 am,
          OOTB Jerry says:

          GOLD IS SOLID>……..price is going up ……count on it……JtheLong…. 🙂

          • On April 17, 2020 at 7:19 am,
            OOTB Jerry says:

            Good article , at your favorite site…..ceo…..
            Jordan….gold $20,000….(sometime in your lifetime)…
            Jordan even admits he was wrong, when we were say the opposite…. 🙂

          • On April 17, 2020 at 8:03 am,
            OOTB Jerry says:

            Obvious to everyone here……..this is the place to be….PMs……..
            And will continue to be for some time.

  5. On April 17, 2020 at 12:00 am,
    Excelsior says:

    If Investors Crunched Data This Their Expectations Would Change Dramatically

    @TheTechnicalTraders – 16 Apr 2020 – Chris Vermuelen

    https://ceo.ca/@thetechnicaltraders/if-investors-crunched-data-this-their-expectations-would-change-dramatically