Jordan Roy-Byrne – The Balance Of Probabilities Is In Favor Of Higher Precious Metals Prices
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to review the overall bullish posture that the precious metals sector has been in for some time; and while overbought, he feels the balance of probabilities is for higher metals prices before a more meaningful correction in the sector. Jordan is encouraged to see silver and the PM mining stocks outperforming gold recently, another point he reiterated was the positive breadth thrusts across the the advance/decline line and rate of change signals he follows, which is constructive for the whole sector.
As for concerns about the overbought conditions, he points out that in a true bull market that conditions can stay overbought longer than expected, and that corrective moves, like the 8% move down in gold that we saw in February/early March are more shallow and shorter than many are used to.
We wrap up with Jordan outlining that there is still plenty more room for upside appreciation in the metals and mining stocks, and that at this point in the newly developing secular bull market that buying and holding a well-selected portfolio, is more important that trying to overtrade the sector. In particular he highlights growth-oriented gold producers and silver stocks as two areas he believes will offer significant leverage to rising metals prices.
Good point IrwinW, and yes, often Canada gets a tier 1 status for jurisdiction risk, which at times is a bit deflated as there are plenty of permitting, policy, and community engagement issues to still work through in each of the provinces. Yes, that news out of Saskatchewan, previously posted, was a bit concerning indeed.
Conversely, many jurisdictions about are too heavily discounted, like many countries in West Africa, some Latin American countries or specific states where things are improving, and even some island nations like Fiji, Papau New Guinea, etc…
The bubble phase in gold could unfold quicker than most expect
Gary Savage – Apr 9, 2023
Stock market today: Dow snaps win streak after paring gains amid recession jitters
Yasin Ebrahim – Investing.com – Apr 12, 2023
“The Dow snapped a four-day winning streak Wednesday, after giving up intraday gains as investors weighed the Federal Reserve’s minutes flagging recession concerns and data showing cooling inflation.”
The minutes of the Fed’s March meeting showed that members were now forecasting a “mild recession” later this year in the wake of the banking crisis and showed that members were close to pausing rate hikes in March.
“Banking-sector developments moved the Fed staff’s projections to a mild recession starting later this year, and real GDP growth remaining below potential through 2024,” Morgan Stanley said and kept its expectations for a 0.25% rate hike in May unchanged.
EIA Expects An Oil Market Surplus Despite OPEC+ Cuts
By Tsvetana Paraskova – OilPrice.com – Apr 12, 2023
“In its Short-Term Energy Outlook, the EIA said that it expects the global oil market to remain in surplus this year and next.”
“Despite OPEC and Russian production declining, the EIA expects global oil production to increase by 1.5 million bpd in 2023.”
“If the OPEC+ cuts expire, the EIA sees global oil production averaging 103.25 million bpd and consumption averaging 102.72 million bpd in 2024.”
NatGas Bottom Retest?
Silver Leads PMs.
Nat Gas is starting look very compelling from an unloved low-pricing bottom-basing point of view.
Buy this morning?
Analyst Michael Oliver – Best Bullish Setup for Gold, Silver And Miners Ever
Mining Stock Education – Mar 31, 2023
“Analyst Michael Oliver believes we are seeing a tectonic financial plate shift that is resulting in the best bullish setup for gold, silver and the miners possibly ever. “Events are moving quickly” he says that will dramatically benefit gold, silver and the precious metals miners. Michael also reveals he is bullish on grains while providing commentary on the general equities, USD and commodities.”
0:57 Bullish gold, silver & miners
5:00 Answering skeptics re: gold/silver bull call
8:29 “We don’t need a central bank” movement next 2-3yrs
12:10 No historical financial precedent for 2023 setup
16:37 Where to invest now?
19:43 Bullish grains & grain-related stocks
20:48 Oil & gas
30:22 Michael’s website & service
This was a particularly good interview with Michael Oliver, and the points he makes on the likely outperformance of the PM sector, and in particular Silver, over most other commodities over the next 1-2 years is spot on…. and he’s bullish most of the commodities sector in a general sense.
In addition he was very constructive on the food commodities, grains, and individual stocks with exposure to food. Makes sense…. People gotta eat!
He nails it right off!
Gold is the Monetary Metal.
The Maypole about which Money dances.
(SILV) (SIL) SilverCrest Metals: Fair Leverage To Silver With Limited Risk
Paul Franke – Seeking Alpha – Apr. 12, 2023
“SilverCrest’s Mexican mine is up and running, projected to produce 10 million ounces of silver annually by 2024 over a decade in operation.”
“Total company costs are projected in the $12-14 an ounce range, meaning price gains above the current $25 quote in silver will add considerable income and cash flow for shareholders.”
“Shares appear to be undervalued vs. other silver miners operating in the Americas. I rate shares a Buy based on my bullish silver outlook.”
I’m sure The Federal Reserve Board unknown to the public is loaning Reserve funds to brokers not at the fancy rates we see today but at the old zero interest rates. They are very concerned about the margin calls which will come whether the economy crashes before the stock market.
Things have now come to pass that if they raised the rate still further, they run the risk of bringing about a terrific smash in the market, and of appearing to do so deliberately and wantonly, but also of seriously handicapping business by forcing it to pay a high rate for funds.
I have been warning about the debt loop here for at least fifteen years.
There is no way to Deflation except through disaster. You must let the rotten parts of the economic system collapse through bankruptcy.
The Federal Reserve does not have an ingenious scheme they can think up to avoid this catastrophe. DT
Triple-Buy Tranche (TBT)
One way to bracket a limit buy.
Determine Range (2% of Target, e.g. BOIL 2.96 = .06).
First Buy Order: 100 @ 3.00 (Target + 2/3 Range).
Second Buy Order: 200 @ 2.97 (MidPoint).
Third Buy Order: 300 @ 2.94 (Target – 1/3 Range).
Increase per Buy Base (100 in this example).
BOIL’s ATL (All Time Low) is 2.96 and,
if it is tested closely, some of this TBT will be filled.
I put in similar TBTs this morning. – BDC
No fills today.
Unofficial appearance of my US Schwab account with OTC shares and IBKR account with Cad shares is that the OTC has different pricing action suggesting intervention in the OTC pricing of junior explorers.
For example: IBKR all green to open. Schwab: some up, some down and overall red.
Added: Magna and Emo continue to alternate days of green and red. (In general)
Hi Terry, are you in OZ Minerals! OZ Minerals shareholders approve 6.4 billion$ takeover by BHP. BHP also offered OZ shareholders AUD $1.75 dividend at their annual meeting to accept this deal. If BHP decides to takeover BBB I want to see a 3-cent signing dividend, plus a premium of 60 to 75%. LOL! DT
That should read 3 cents per share! DT
Wow – Thanks for the heads up DT, as I’d not seen that news yet on that acquisition.
>> That is definitely a big boy acquisition there of OZ Minerals by BHP. Nice!
I would not be happy at all if BHP takes out BBB anytime soon!
Does anyone here own WAMFF besides the Horseman? I just bought some at 1.85 and expect it to sink when word gets out that “Bonzo is on board.”
Hi bonzo barzini – Yes, Doc Jones just mentioned he also has a stake in Western Alaska Minerals, and just mentioned participating in a recent financing with them in an interview we recorded with him today.
Stay tuned as that Doc Jones interview will be posted this afternoon.
Thanks, Excelsior. I wish I knew how to take part in the recent financing as I could have bought shares with a warrant for less than I paid for my shares. Are these financings open to Texans or just Canadians?
Bonzo, I believe Texans can take part in financings but cannot exercise the warrants. This is fine since they trade just like shares so you simply sell them before they expire. If you hold even “deep in the money” warrants past expiration you will get nothing for them.
A full service broker like Sprott can help you get a piece of the action.
Good answer Matthew, and yes there are ways for US investors to participate and work around the warrant issues with brokers, but it is much more of a pain in the rear for US investors versus Canadian investors.
In general, I’d rather just buy and sell in the open market, because when warrants are given away like candy or at too low of exercise prices or with too long of time frames it is one of the big issues with Jr Mining. Many companies and management teams are their own worst enemies, or if nothing else, do things that hurt shareholders buying in the open markets.
The liberal issuing of warrants during capital raises creates price overhangs at the exercise price when the stock price goes there and investors dump shares and just hold onto the warrants… yes maybe bringing in more money to the company, but also creating even more dilution and momentum killer and price limiters.
There are so many times companies have done good work, gotten some momentum going in their stock, and then the warrant overhang kicks in like a ceiling on price, and ruins the upside trend. The other thing we see are people getting tipped off to coming financing so many of the insiders sell the crap out of a stock for a few weeks leading up to it, which drives the price way down, and then financing is calculated from that 10-day or 20-day average, and they all get back in and load up with the warrant kicker.
This is so counterproductive to real progress in the price and valuation, so in general, I don’t want to contribute to that phenomenon that usually hurts investors buying in the open markets, and only rewards company cronies and insiders.
I have a lot of respect for management teams that can raise without the need for warrants, or at least pare them back to 1/2 warrants over a reasonable time frame and at a high enough price.
Thanks, Matthew and Ex. I admire Rob McEwen because when MUX needed to sell more shares to raise money he used to let the shareholders take part, and did not surprise them as most companies do to benefit insiders.
As for timing and staying invested in quality companies being two distinct bull market strategies, might I suggest that they probably should not be thought of in opposition to one another and that you can keep core positions while still taking profits, reallocating to other companies and having capital to buy the inevitable ~8% dips that will occur?
Was his idea of timing trying to participate in each leg of the run in an all-or-nothing basis? Where you switch back and forth between full investment and full cash? I can see that approach only for the most speculative part of the portfolio, but even in those in a bull run it would probably make sense to keep at least some sort of a core position. For example, in FURY I have profit protecting strategies but I’m not going to sell everything until I’m convinced the overall bull market is pretty much over. I would like to see FURY eventually bought out by a major.
At the same time I’m not going to hold a declining asset for years like those still waiting for a return to the 2020 peak on a lot of their juniors. But I don’t think we’re anywhere near that kind of thinking.
Fantastic points DL. Yeah, I was thinking that exact same thing when listening to Jordan’s opinion on not trading but holding, but it seemed to come from his vantage point of going all-in or all-out on each trade and getting wrong-footed versus just holding and catching the ride.
In reality though, most of the successful traders I know and in my own personal methodology don’t trade that way, and as you mentioned, they trade around a core position in a company that remains exposed, and then simply buy more on the dips and sell some to pull profits on the rips, based on the technical set up. If one is wrong then their core position of 50%-85% is still in place to keep riding, but if they are good using TA for entries and exits, then the can dramatically outperform someone just sitting in a stock for years at a time.
Sometimes it is just best to let our guests make their points without challenging them on it, or it can open a whole can of worms. I think in general, there are many “investors” that are not good traders, don’t have a systematic approach, and have made less returns than if they had just bought and held during very bullish legs in the sector, and so in those scenarios I agree with Jordan’s advice. Like anything in life, it is a nuanced discussion with different approaches that work for different people, and there is no one-size-fits-all approach that will work for everybody.
I was interested in his comments that he’s tried it both ways and found the buy and hold during the bull market to be better. It was just strange to hear a CMT advocate against timing and for buy and hold. Though he did have nuance right after that of taking profits and reallocating them to other positions.
I don’t think it would have been necessary or appropriate to challenge him on his take. For most people it probably is for the best to identify the start and end of the bull market and stay in for the whole thing. And he probably has had loads of experience dealing with subscribers who take his research it and implement in strange ways and then come back to him when it doesn’t work out.
Yes, good points DL, and I was also interested in his comments, because, as you mentioned, he is a certified market technician so it was curious for him to advocate against timing and for buy and hold. However, as you mentioned, right after that he did offer some nuance about trimming a position that is up really big to possibly rotate into another quality company that may not have moved much yet. Which is trading and rebalancing the portfolio, and still a form of active management.
Also yes, on the other point about it is probably best for most investors to just identify the rough area of the start and end of the bull market, and try to catch as much in the middle as possible… “the meat of the move” as they say…
Yes, agreed, he absolutely does have loads of experience, and has also mentioned to me before that he used to like to trade more often, but like any newsletter writer with followers, has to take things more simply and over longer time periods, with less trading, because of precisely what you mentioned: “subscribers who take his research it and implement in strange ways and then come back to him when it doesn’t work out.”
Bingo. That is human nature, to try and blame the person that was trying to help them, but then failing to identify or take ownership for their own poor trading or not paying attention to the specific nuances, and then suggesting it was someone else’s fault. That is a recurring theme and common lament from many newsletter writers we talk with that discuss how to juggle making abrupt changes or making quick trades, or even reversing ones call, without some followers getting off-kilter. It typically results in having to do less trading, and make less sudden changes, or take less decisive action, or else others don’t take the same action, or aren’t following along closely and miss the timing of a market change, or take something said out of context and misapply it etc…
For those reasons, emphasizing the buy and hold strategy is less rocking of the boat, and during a true bull market that strategy does keep people from getting too cute trading, and then getting out of position and missing continuation rallies.
A buy and hold over the last decade hasn’t really been a winning strategy, and trading the corrections and rallies was the far more lucrative path. However, if we are really ripping into a new secular bull, then I too may adopt a more “hold-steady” type of approach and refrain from overtrading or if pulling partial profits, to expect a more shallow and less severe pullback with which to get back into position more quickly, than in a bear market playbook.
A while ago Ex brought up the topic of Saskatchewan Natives claiming that natural resources belong to them. This is another step toward making Canada less attractive as a place to invest.
“Justin Trudeau’s Justice Minister threatened to Rescind the 1930 Natural Resources Transfer Agreement. Honorary King’s Counsel, and Legal Scholar on this subject, Keith Wilson joins me to talk about the implications of such a threat, and what it would mean were the Federal Government to follow through with it.”
How Rescinding 1930 Natural Resources Transfer Agreement Would Destroy Canada