Now that the short squeeze in silver is behind us here are the stocks Dave is focused on

February 2, 2021

Dave Erfle is with us today to recap the gold and silver stocks that moved and quickly corrected. It’s time to get back to individual stocks (which most are cashed up) and assess the work programs for this year.

Click here to visit Dave’s site to follow along with how he is managing his portfolio.

    Feb 02, 2021 02:07 PM

    Come on ! There’s no market in silver other than a totally RIGGED MARKET by the COMEX.

    The peons just didn’t understand how rigged the metals are.

    Suppl;y and demand MEANS NOTHING with regard to pricing of silver, gold, etc., because there is no free market.
    The only thing that responds to demand is the premium paid for physical silver.

    With regard to stocks, they behave cyclically, based on sentiment, more than fundamentals.

    Explorers can respond temporily to discoveries; while producers are dependent on metal pricing and sentiment.

      Feb 02, 2021 02:38 PM

      “Suppl;y and demand MEANS NOTHING with regard to pricing of silver, gold, etc., because there is no free market.” This statement is true to the extent that one only uses the spot price. However, when you buy, you will always pay a premium and that becomes part of the price. Those dollars are as round as those that make up the spot and demand does affect the premium!

    Feb 02, 2021 02:10 PM

    Quite often the biggest mover of mining stocks is advertising at conferences and touting by letter-writers.

      Feb 02, 2021 02:44 PM

      Very true, I think of Admir Adnani’s Goldmining back in 2015-2016, pumping with Rick Rule & Marin Katusa for better than a year, and Adnani appearing everywhere with his uranium’s & gold in the ground opportunity of a lifetime.

        Feb 02, 2021 02:27 PM

        +1 Marty. Great example of the marketing trumping fundamentals on those Adnani plays, and it is the same with dozens and dozens of plays each year. Look at how crazy the valuation got in New Found Gold just recently as it screamed higher to a valuation way over companies that have actually been working for years to build out large economic deposits, or even some producers that already are permitted/built/operating and actually pulling decent amounts of metal out of the ground.

        There is something to be said though, for being involved in stories that skyrocket up on marketing, especially new companies when they the market. Look at the insane ascent higher in Nova Royalty for example. E.B. Tucker, who I really respect, was everywhere promoting Metalla and teasing Nova, and then when Nova listed it was pumped all over the place, and took off like a scalded cat to the upside. Those kinds of moves can be insanely profitable for those that get positioned early.

        There are also the companies (particularly the Exploration drill plays), that will legitimately hit a promising drill hole, but then all the newsletter writers, promo companies, and talking heads come out jumping on that bandwagon and the explorer rips higher to a valuation divorced from any reality, even if the drill hole or holes were excellent.

        Remember the initial moves a few years back in GT Gold, Garibaldi, Northern Shield, Arizona Silver, or more recently in Nighthawk, Sokoman, Azimut, Newrange, East Asia Minerals, etc…

        The initial moves higher were waaaay ahead of themselves, but after the pop-n-drop, and after things settle down and return to gravity, then over time some of those companies do good work, and end up proving that they have something real, and end up climbing again at a more measured rate in lockstep with the development of the fundamental backdrop of the company.

        GT Gold has done 4 more years of good work since that initial marketing pump, and have gradually built up a base of loyal investors that have pushed it higher on years of quantifiable results, and their valuation today, is high, but more in line with reality.

        One of the strategies that has worked well for me is to position in companies that legitimately do have promising projects, after the hot air comes out of the marketing balloon, and when investors start turning on the company and doubt sets in, but the company presses on and delivers good results to an ambivalent market.

        A recent example for me was getting involved in QMX Gold after the initial pump n dump, when it was unloved, and then as they put out more and more good drill holes and kept climbing on this news, they just got acquired by Eldorado Gold.

        A few more prior high flyers that crash landed, but still are doing promising work and deserve a re-rating are a few of the aforementioned companies like Nighthawk, Azimut, Newrange Gold, Aurion Resources, Orex Minerals, Dolly Varden, or Defiance Silver.

        One man’s trash, can be another man’s treasure, and often investors throw out the baby with the bathwater, when they exit an over-hyped stock. Another one that comes to mind is Wallbridge Mining. They absolutely have found a world class deposit, got way over-hyped, took over Balmoral (a previously over pumped company that crash landed), and people had mixed opinions about all of it and left in droves. My eyes perked up when that happened, because I saw the opportunity that has presented itself, especially over the last 2 months, to get positioned in a company that I feared had ran away from me for good.

        Jumping into a company that is currently well into it’s rocket-ride parabola and marketing frenzy, is often a fool’s errand. In contrast, there is often far better value in looking at the hot plays of 2-3 years ago, that have had meaningful pullbacks, but have a solid project and doing good work. Those companies are the turnaround stories, than can have quite a re-rating when the market wakes up to them.

        We can see this trend even in producers. A few years back companies that had tried to market their stories, had initial success, and then were punished, but over time they stuck with it, persevered, proved they had a winning project, and eventually got rewarded for it. There were some great turnaround stories like Newmarket Gold, Lakeshore Gold, Claude Resources, K92, Roxgold, Jaguar Mining, Northern Vertex, Santacruz Mining, Endeavour Silver, GoGold, etc… They were all getting beat up or were just unloved and underfollowed, and even their good news was just sold off or shurgged off. These companies pressed on doing good work, that work was finally realized, and then they got massive re-ratings higher by the market.

        There are plenty of companies in that same boat right now. I’ve been impressed with the turnaround going on at Galiano Gold (formerly the mess that was Asanko), Galane Gold, Superior Gold, and I picked up Alamost Gold today as I believe they are doing good work but not getting recognized. There are also companies like Americas Gold & Silver, that are in the midst of their turnaround, but have been stuck in it for the last 2 years, and while I still believe they will be successful and get a massive rerating, they have a lot of proving it with results to do before Mr Market gives them the nod to rise.

        The great part about the resource sector, is that there are so many companies to sift through, and while there are boats capsizing, or taking on water, there are also boats bailing water and setting sail for more pleasant tailwinds every single day.

        Ever Upward.

    Feb 02, 2021 02:02 PM

    There’s something wrong with those who don’t feel lied to:
    Only 23 Americans Tested Positive for Flu Last Week Compared to 14,657 Cases Reported Last Year at Same Time

      Feb 02, 2021 02:07 PM

      Cory, feel free to delete the above post. I forgot about putting it on the politics page.

    Feb 02, 2021 02:52 PM

    Same thing was happening here, no flu.

    Its all the distance,masks and hand washing.

    Course no sex with strangers has gotta help too.

    Feb 02, 2021 02:26 PM

    SilverCrest Announces Positive Feasibility Study Results and Technical Report Filing for the Las Chispas Project
    2021-02-02 20:01 ET – News Release
    TSX: SIL | NYSE American: SILV
    VANCOUVER, BC, Feb. 2, 2021 /PRNewswire/ – SilverCrest Metals Inc. (“SilverCrest” or the “Company”) is pleased to announce positive results from a Feasibility Study (the “Feasibility Study”) for the Las Chispas Project (“Las Chispas” or the “Project”) in Sonora, Mexico.
    Robust Economics – The Feasibility Study considers a 1,250 tonne-per-day (“tpd”) operation, with an initial mine life of 8.5 years. On an after-tax basis, Las Chispas generates a Base Case NPV(5%) of $486.3 million (“M”), IRR of 52%, and a payback period of 1.0 year. Using spot prices on the effective date of the Technical Report ($1,946/oz Au and $27.36/oz Ag) the after-tax NPV(5%) is $802.5 M, IRR is 74% and payback period is 0.7 year.

      Feb 02, 2021 02:36 PM

      +1 Very nice FS from SilverCrest, and while I had trimmed them on Monday, I picked them back up today for $2 less then where I trimmed that position yesterday. Silvercrest has grown into my largest Silver position over the last few weeks, just due to swing trading and buying dips, then selling rips. Normally my largest Silver or Gold positions are in larger Mid-tier producers like Coeur, Silvercorp, Hecla, Argonaut, or even smaller producers like Impact Silver, Santacruz Silver, Roxgold, etc… but sometimes a developer hit’s it’s Golden Runway, and becomes more heavily weighted. Last year Alexco and Pure Gold grew to first position a few times, and I finally had to harvest some gains to knock them back down in weighting. I feel really good about Silvercrest, and am fine with it being so large in the portfolio as a safe bet on the Silver space, but I’m not going to put any more into it, as there are other Silver explorers and developers that I feel can grow much more on a percentage basis. One of the companies I feel may be Silvercrest 2.0 is Silver Tiger, so while I also trimmed it back a bit yesterday, I’m likely going to keep accumulating a larger and larger position in it for this year’s exploration season. Another one that I think is really undervalued still, for what they have is Metallic Minerals, (neighbors with Alexco). Reyna Silver is another company that has not seen the kind of ascent of many of the other Silver explorers, that looks very prospective, and with Peter Megaw involved, they should be able to get the markets attention this year.

        Feb 02, 2021 02:07 PM

        Yesterday I pulled some profits in Golden Minerals, Endeavour Silver, Silvercrest, Coeur, Silvercorp, Hecla, Alexco, Santacruz, Impact, Silver Tiger, and McEwen.

        However, I also did a little buying and added to positions in Ur-Energy, UEC, Baru Gold, Newrange, Westhaven, Minera Alamos, and Northern Vertex.

        For today’s trading I added back to Golden Minerals and Hecla in 2 more tranches each, and added a little to Endeavour Silver and Silvercrest. A new position also got started in Alamos Gold.

        The only ones that got trimmed today were Excellon & I sold my RWM short Russell 2000 position to raise more dry powder for poaching more deals in the mining stocks.

          Feb 02, 2021 02:56 PM

          A few of us have been discussing Fury Gold the last few days, as well as the good interview Cory did with the company, and last Friday’s interview with John Feneck when he brought up his positioning in it, like some of us were (before the recent pop higher).

          Here’s the VRIC coverage of FURY that was posted today.


          The Gold Stock to Buy for 2021: Fury Gold Mines

          Cambridge House International Inc. – Feb 2, 2021

          Feb 02, 2021 02:37 PM

          Santa Cruz reported outstanding Q4 production today.

            Feb 02, 2021 02:19 PM

            Blasesb yes good point about the good operations report from Santacruz Silver today.

            Even though I mentioned yesterday that I trimmed tmy Santacruz position back, that profit-taking was in tandem with trimming in many of my larger silver stock positions on the strong market surge higher. I did not buy that position back in SCZ today, because I still have a nice weighting to it in my portfolio with the remaining core position. If Silver miners keep pulling back hard, then I’ll likely buy all those positions back, including the portion of Santacruz sold.

            Feb 02, 2021 02:23 PM

            Right now I also see value in increasing the size of some of the more speculative Silver developers and explorers, which may move higher on a percentage basis; especially as this focus on the Silver markets continues.

            Feb 03, 2021 03:54 AM

            (SCZ) (SZSMF) Santacruz Silver Produces Record 3.7 Million Silver Equivalent Ounces in 2020

            @newsfile on 2 Feb 2021


    Feb 02, 2021 02:20 PM

    Gold Price Framework Update – The New Cycle Accelerates

    Feb. 01, 2021 – GoldMoney – Seeking Alpha

    > Gold prices rallied 25% in 2020 after having gained 19% the year before.
    > Real-interest rate expectations are a combination of long-term rates (10-year yields) and the market’s long-term inflation expectations.
    > As nominal interest rates were already very low in early 2020, there was very little leeway for central banks to react by slashing rates.

    “In our gold price framework (Gold Price Framework Vol. 2 – The Energy Side of the Equation, May 28, 2018), we identified three main price drivers for gold prices over the long run: Central bank policy (real-interest rate expectations and quantitative easing), net central bank gold sales and longer-dated energy prices. When we presented the first iteration of this model in late 2015, we came to the conclusion that these three drivers were all aligned for gold to be at the bottom of its prices cycle and enter a new cycle…”

    Feb 02, 2021 02:54 PM

    Why #SilverSqueeze​ ‘backfired’; price is now collapsing – Peter Hug

    Kitco News – Feb 2, 2021

    Feb 02, 2021 02:15 PM

    Given the moves in the silver price, it feels like just another week to me.

      Feb 02, 2021 02:26 PM

      Good point cmc. Silver is quite volatile on most weeks, and the silver miners are even more so. (which is why they are so advantageous to trade)

        Feb 03, 2021 03:51 AM

        Hi Excelsior
        you wrote this comment earlier “Even though I mentioned yesterday that I trimmed my Santacruz position back, that profit-taking was in tandem with trimming in many of my larger silver stock positions on the strong market surge higher.”

        I have read many of your articles and it appears to me that you are very open and transparent on this site and would answer my question best without feeling offended. My question is simple ( to the un-trained eye), when i purchase a stock and see a positive monetary gain, what criteria do you use to decide that its time to sell the stock and pocket the gain?

          Feb 03, 2021 03:33 AM

          Hi TORONto. Yes, feel free to reach out about discussing any topic, as that is why we are here on an investing blog, to share ideas with one another.

          The questions of when to sell a stock (after a gain or a loss) is really THE question.
          It is much tougher to sell a stock, than it is buying the stock in the first place. If a position has done well, then there is the fear one may be selling it too early, but that is also simultaneously combined with the fear of loss and desire to lock in a gain (so as not to see the gain evaporate into money heaven). If a stock has done poorly, then one must concede they were wrong in their entry and cut the loss, or hold onto the position longer and potentially average down in the position if one feels the fundamentals are solid, but that things may take more time to develop.

          There are many different strategies and thoughts on when to sell, and it could be for fundamental reasons or for technical reasons.

          One may decide to sell because a of good major milestone like first pour or a takeover or resource estimate have been achieved, and their is a liquidity event. Conversely one may decide to sell if there is a sudden change to a sector backdrop, if there is bad news (tailing damn burst, bad drill results, permit denied, tax complication, community pushback), or the company makes a decision you as the investor disagree with (picking up new property, selling a key property, changing the focus of what commodity to go after).

          There are other investors that almost completely or completely ignore all fundamentals and news, and strictly use price action and chart indicators to trade stocks, so their criteria for when to sell will be based on a change to the bullish trend, and signals that foretell a potential bearish trend developing (ie… a slow stochastics cross sell signal, a MACD cross and sell signal, shorter duration moving averaged dipping down through longer duration moving averages in a “death cross”, or pricing dipping below key moving averages, or a bearish candlestick pattern, or a failed attempt to hold support at a trendline, etc…).

          Some investors do operate with strict rules like (sell 1/2 on a double), or (sell the position after X% ) or (Sell the position if trendline support is broken, or if it dips below a specific moving average 18 day, 21 day, KAMA, 50 day, etc…)

          Personally, I don’t have a set rule for when to sell, or for what reason I like to sell. It is literally different for me on every stock, and take them all on a case by case basis. My style is to scale into and out of positions in multiple tranches (often 3, 4, or 5 tranches). I will target a technical spot for accumulating, or sometimes I will have freed up funds from another winning trade that I want to put back to work, and I have a watchlist of companies on deck that I want to buy next. If the valuation in Market Cap, or the technical share price action, or the valuation relative to peers looks attractive, I may just grab a small tracking position (10-25% of the money I want to allocate to a stock position) and then with money on the line, I’ll pay much closer attention to it. For the 2nd or 3rd tranche, I often will use charts to look for the best entry, but sometimes, I just dollar cost average into a position when I see it pulling back 20-30% without the story changing. Well the same is true in reverse for when I start scaling out. I may use charts to look for oversold conditions or a topping pattern, but sometimes I just start scaling out if it has gone up a reasonable amount, which is more subjective. Like in a longer term holding I may want to see a 200-500% increase in the position before finally parting with a stock I really have conviction in, but there are plenty of times I’ll trade around the core position with a partial position if I can make a quick 15%-40% in a few days or even in a few weeks, I may just flip that position out for a smaller gain, because it was in a condensed time period.

          Sometimes the reason I sell a partial position may be that I spot a better opportunity in a different stock, and think – OK a 60% or 80% gain in 3 weeks is plenty, and I want to rotate those funds over to this stock that just pulled back 30%.

          Sometimes a stock will go up so much more than it’s peer group, that I’ll decide to trim it back and redeploy the gains into ones that haven’t moved as much, in a rotation. Other times, I just get a sense that a sector is going to pull back, and I’ll trim across the board. For example in the 2nd week of January I trimmed back gains in Uranium stocks, and in the 3rd week I trimmed back gains in Lithium miners. This was actually my rationale for trimming 11 stocks on Monday (including Santacruz that you highlighted from my post). I had a feeling the Silver surge that had started on Thursday, then ran into Friday, and then ran into Monday was getting a bit overextended, and decided to pull profits in some of the companies that had run the hardest.

          I realize this is a long and multifaceted answer, but I don’t believe there is a “one-size-fits-all” answer about when to sell a stock. Everyone has different strategies on how they invest, what they hope to get from a particular investment, their time horizon, tax implications, comfort level trading versus value investing, and if they want to go all or nothing in buys/sells, or enter and exit in multiple tranches.

          Most investors feel good about their buys, but the debate is after positioned when to buy more, hold, or sell. It’s an art as well as a science, and some of it also dumb luck. At the end of the day, nobody ever got hurt taking a profit, but they can cost themselves huge gains if they sell too early. There is also the school of thought to cut losses quickly, but there are also plenty of traders that set sell stops to have an automated way of cutting their losses quickly, only to watch the price hit right below their level, turn around, and then go ratcheting higher.

          Bottom line, it is best to get a basic plan together when one starts a position of why they are buying, what their upside goal/target is, what they will do if the trade turns against them, and how long they plan on waiting to let the thesis play out.

          I’m not sure if this was helpful or not, but hopefully it gives you a few ideas to mull over. Whatever strategy you decide to use, I wish you good trading!

            Feb 03, 2021 03:40 AM

            Excellent in-depth answer!
            On the buy side, the first thing
            should be stop loss determination.
            If too deep, probably look elsewhere.

            Feb 03, 2021 03:57 AM

            I wasn’t expecting such a thorough reply. It has not gone unnoticed the amount of time and energy to answer me. Thankyou.

            I think this strategy may work best for me. It looks to be the simplest, “ Bottom line, it is best to get a basic plan together when one starts a position of why they are buying, what their upside goal/target is, what they will do if the trade turns against them, and how long they plan on waiting to let the thesis play out.”
            I have been lurking on this site for several years and love the variety of opinions. I have been accumulating gold and silver for 20 years, but as we all know, the gains have not been impressive. Only recently after watching a peter grandich, kitco video whereby he states with enthusiasm “I sold my house, my wife was upset but I’m all in. I believe this is a one in a lifetime opportunity.” At this point, I have decided to pull the trigger and go all in as well. I don’t need any convincing that now is the time.

            Additionally, in previous threads, you spoke of northstar , silver chartist, jack ducey, Patrick karim, etc…… these are individuals that I follow every day and really enjoy there work and am surprised that you have mentioned them on various occasions. There is one individual in particular, gold venture, who has a powerful magnetic personality and has suggested /posted a variety of small silver producers which he feels will hit some Barry Bond home runs. One of his picks is Eloro resources limited (TSX-V ELO) which has been a grand slam. Purchased the stock on Jan 7/2021 and has gone up 147% (FYI- normally I’m on the losing side of a deal). Gold venture, states “Buy and hold”, until he recommends pulling out.

            This is the dilemma I’m in. Being positioned in the PM’s has been painful. Tired of giving up gains. That is the basis behind the question. Again thank you for the reply.

            Feb 03, 2021 03:31 AM

            Toronto, thanks for sharing a little more about your personal investing journey, and 2 decades of stacking Gold & Silver. Yes, I saw that Peter Grandich interview as well. As for Northstar, Patrick Karim, and Silverchartist, those 3 guys are all fantastic technical analysts, and I’m checking their Twitter feeds and YouTube videos for the TA and charts every week. I have positions in most of the Silver and Uranium stocks SilverChartist covers (Silvercrest, Alexco, Metallic Minerals, Reyna Silver, Energy Fuels, UEC, Nexgen, etc…), and feel he is in the sector to truly serve fellow investors, something I personally strive to do as well.

            As for Jake Dicey and Gold Venture, I like both those guys coverage of the fundamentals as well. Jake does great video interviews and I post quite a few of those here at the KER.

            Yes, Elora has had quite a rocket ride higher on the excellent drill results in Bolivia, but it has reached a rather lofty valuation at this point. Longer term many of these companies are going to evaluations that will surprise even the bulls, but there are points in the journey where certain stocks get inflated faster than others, where taking a small part of the position as profits, may be prudent, while leaving a core position in place. That is what I was doing on Monday by trimming back some stocks by 15-30%. I did add some right back on Tuesday when they pulled back down hard at better prices, but I’m more of an active trader.

            Longer term the PM stocks have much further to run higher, so it depends on the time horizon, and if you are a buy and hold investor then there’s nothing wrong with holding onto a winner for the larger bull market cycle.

            Feb 03, 2021 03:33 AM

            Dicey = Ducey
            Elora = Eloro

    Feb 03, 2021 03:29 AM

    Dollar breakout possible:

      Feb 03, 2021 03:45 AM

      Gold update!

      Im speaking in terms of gold price and gold miners. So this update is directed solely on the yellow shiny.

      I didn’t see any gap downs at the open but I did see a fake up and back down we go. It seems to me they will cake walk it down and towards the last few days gap the miners down “ if I read this well”..

      What does that do for my pattern? Nothing, absolutely nothing has changed. I’d like to now see today and tomorrow have red candles on the daily with gold followed by a Friday fake and misleading tiny green candle. I’m increasing my percentages that Monday/ Tuesday “ could” very well put the bottom in the miners or most of them. Again as stated before I personally want to see this move down into next week with a holding of the $1814-$1837 level.. if that holds and miners fill in those gaps some of them have, that will be the signal. I believe Charles or Canuck asked me that yesterday.

      I will have a better perspective by Friday if this plays out. Confidentially speaking..

      Yours truly


        Feb 03, 2021 03:48 AM


        Feb 03, 2021 03:04 PM

        Alright Glenster, now we’re talking!
        I bought some more shiny yellow stuff the other week, and had picked up 3 companies recently. I did shave a few as well, and I mean a few only. One of those was MAG silver, where I shaved 1/3. That was tough for me to do. But the price did dip after that, so probably wasn’t a bad thing.
        I will keep my eyes peeled on how things are shaping up next week with the intention of possibly picking up the next round of shares.
        As we move forward over the days, updates will be welcome.