Erik Wetterling – Investing Psychology And Valuation Adjustments As Sentiment Improves In This Precious Metals Bull Market
Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us or a discussion on the psychological part of investing as sector sentiment improves in this ongoing precious metals bull market. We also get into the nuances of how one may need to adjust company valuations in a dynamic way based on how their newsflow compliments or is at odds with the underlying macro conditions and gold and silver price action.
We start off contrasting the upward pricing of gold and silver metals prices to record prices has been allowed many of the producers and higher quality developers to revalue, but that few of the gold juniors have had the type of outperformance and leverage that one would have anticipated in such a bullish backdrop and remain quite cheap still. Erik makes the point that many of them, even after having moved up 100%-200% may actually look even cheaper than they did 1-2 years ago, in light of their newsflow, catalysts achieved, and married with the higher metals prices.
Erik addresses how he views different valuations scenarios that can befall junior resource stocks, and that not every portfolio laggard is an indication that something is wrong or that the position needs to be abandoned. He also reviews some of the pitfalls that investors fall into rotating out of lagging stocks to chase stocks that are consistently running higher, only to see those same trends reverse and for people to be out of position and doubting their investing thesis at precisely the wrong times in the cyclicality of this volatile sector.
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Click here to follow Erik’s analysis over at The Hedgeless Horseman website
Hi Terry .. I think that applies to most mining stocks.
IPT has been a very disappointing stock.
Lot of people have fallen off the vine…………… holding junk…… when they could be their own banker….
PHYZ………
Way to many people involved in these small corporations…. to verify and trust….
Way to many dollars involved in the piggy bank,…with a lot of sticky fingers……IMO
If anyone’s wondering why I’m fine with Impact Silver, it’s because I knew 2.5 years ago that it’s trajectory would be changed by the Plomosas deal. I was for the deal then and like the deal even more now but it was clear that it would change Impact’s trading behavior for awhile if not permanently.
However, when Impact sniffed the turn in the silver-gold ratio 18 months ago and took off before the ratio even got going, I was relieved that it behaved very much like it had in the past. Then, when it again bottomed ahead of that ratio this year and took off with great leverage to it, I knew the company still had it. BUT it also has the Plomosas turnaround story that comes with it’s own baggage like all acquisitions do, no matter how good they might be. There are, no doubt, plenty of shareholders that don’t like the deal for whatever reason and that sentiment change alone can impact trading behavior.
Another factor that easily played a role in the selloff is the fact that IPT finished the last two months well above its monthly Bollinger Bands and on the first trading day of this month (yesterday) it reached as high as 23% above its monthly Bollinger Bands. For those who don’t know, trading outside of the Bollinger Bands for long is unusual for stocks in general.
https://schrts.co/iZhgtkHj
Matthew, the timing of these pp’s and the way they are done does not support what you say and does not pass the smell test.
There’s always a need for capital among junior miners that have so many targets to drill and stepping-up drilling makes a lot of sense in a bull market for a number of reasons. Yes, we want our gains right now like all investors so it’s easy to find fault with the timing but we have to remind ourselves that no one knows the future, especially the immediate future. I believe Fred should have waited but he would not be alone if he’s worried about the sector stalling here or soon. And of course there could be some deal-making going, too. Whatever the reasoning, the terms are ok, being cashed up is great for attracting retail buyers and the dilution isn’t as problematic in this kind of market. We’re looking at 36M to 44.3M shares, roughly 13 to 16 percent of the float.
IPT announced another capital raise, upsized to 13 million, which typically tanks the shares. I be nibbling all the way down…
I’m in too Buzz, good place to get placed when sellers are only selling on anger……………at $50 silver………..I believe there is a double or triple here………IPT will be cash flowing such that it will justify it at that moment !!!
Silver’s going much higher than $50!
Two breakouts at once from silver this week:
https://schrts.co/GDhzeKfX
People should be suspicious that IPT share price is being manipulated to advantage insiders and associates