Tag Archives: mining stocks

This Feels Like the Action in 2008 Right Before the Collapse

Doc asked me last minute to fill-in for Eric Dubin, who’s M.I.A. somewhere on the shoreline of southern France, on Silver Doctor’s Metals and Markets weekly podcast. Among other topics we discussed why the current trading action in the precious metals paper market feels very similar to trading in the spring/summer of 2008 – ahead of the great financial collapse crisis and why the Fed/bullion banks are making it obvious that they seek  to scare investors away from buying precious metals with their “shock and awe” price-takedowns.

But one big difference between now and 2008 is that these “zip-line” vertical drops in the paper are being met with aggressive buying from the eastern hemisphere physical buyers, thereby limiting the size, intensity and duration of the price-hits.

As of the latest COT report release Friday which details the constituent trader positions through last Tuesday, the trader positions are moving toward a highly bullish set-up for gold and silver. In silver, the hedge funds are now net short silver futures and the swap-dealer segment of the bullion bank positioning is net long. In gold, the hedge funds have aggressively reduced their net long position and the swap dealers are long to a relatively large degree. Historically, this position shift has preceded major bottoms.

In the latest Mining Stock Journal, I present a silver producer who’s stock that was ruthlessly taken recently. I review the details in-depth, including my conversation with the CEO, and discuss why this is an opportunity to buy into a major producing company at irrationally low price level based on the facts of the situation. I also lay-out the call options I put into the fund I manage in large quantities to bet that my assessment has good probability of being correct. You can find out more about subscribing here:   Mining Stock Journal info.

After subscribing to Brent Cook for 3 months, I was underwhelmed.  Resubscribed to you a few weeks back and sure am glad I did so. You are one the few straight shooters still out there. Keep up the great work. I think we are right on the cusp of a serious market break, thus the war drums.  – subscriber “Chris

How Will Gold, Silver & Mining Stocks Perform In A Stock Market Crash?

It looks like the western Central Banks are having trouble pushing gold below $1240 right now.  After series of high lows in the price of gold since late December, it looks like there’s chance gold is forming the base for the next attempted assault on $1300.  At the same time, judging from the stock market trading action of the last three days, it appears as if the Trump “Hope” Bubble is getting ready to pop.

Bill Powell of MiningStockEducation.com invited me on to his podcast show to discuss how the precious metals sector will perform when the stock market inevitably crashes, among other topics.

GDXJ: Myth vs. Reality

Many of you have contacted me about the sell-off in GDXJ and upcoming re-balancing that will occur at the end of this week (I think). First of all, thank you for your inquiries and please feel free to email me with questions/ideas. The only “dumb” question regarding gold, silver and mining shares is, “should I own any?”

First I wanted to highlight the difference between fact and “propaganda.” The propaganda has led many to believe that the rebalancing of the GDXJ has exerted undue pressure on the mining stocks as a whole and on the GDXJ components specifically. However, a simple graphic analysis differentiates fact from fiction:

The graph above compares GDXJ, the HUI (green line) and GDX (purple line) since the GDXJ rebalancing was announced to the market on April 17th. As you can see, over the time since the GDXJ rebalance was announced, GDXJ has performed in-line with rest of the sector. I was a bit surprised when I ran that chart. In fact, on a YTD basis, GDXJ’s rate of return is almost identical to that of the HUI and GDX:

So where does this leave us? The entire sector has moved lower since early February. Maybe this was in anticipation of the GDXJ rebalancing “whispers” and maybe not. Often the miners will be hit before a manipulated take-down of the gold price is implemented. That narrative fits the chart above as well.

It’s important to distinguish the difference between the propaganda and truth, because that’s where money can be made in the markets. The truth is that the sector has sold off after a nice move from the mid-December 2016 low. But I also believe that the market is setting up for another big move into the 3rd and 4th quarters. It may take all summer for this to materialize, but the economic, financial and geopolitical fundamentals, as they are unfolding, weigh heavily in favor of big move higher in the precious metals sector.

One other point I would like to make – something that you WILL NOT HEAR from Wall Street or from Rickards or from the financial media: since bottoming in mid-December, the HUI is up 14.7%, GDX up 16.1% and GDXJ up 15.3% vs the S&P 500 which is up 7.7%. The mining stocks, since bottoming in mid-December, have outperformed the S&P 500 over the same time period through today (June 15, 2017).

Several of you have asked for ideas on the stocks in the GDXJ index that are “oversold” due to the rebalancing. As I’ve just demonstrated graphically and with ROR numbers, GDXJ has not really sold off since mid-April anymore than the larger-cap mining stocks in the HUI index and in GDX. Those are the numbers. I can’t make those up. It’s “narratives” that are fabricated.

Having said that, I did present two ideas in the Mining Stock Journal which happen to be in the GDXJ.  One is up 6% since May 4th – and it has a lot higher to move – and the other is up 20% since June 1st, with a lot more left in the move.

A subscriber told me yesterday that a well-known subscription service that costs $1500/year is promoting 3 ideas from GDXJ.  This is probably one of the services that is promoting the idea that the GDXJ has been hit unusually hard. I’ve shown above that idea is a false narrative.  The Mining Stock Journal is $20/month with no minimum commitment.  Subscriber turnover is exceptionally low for a reason.  You can find out more about it here:  MSJ Subscription Info.

Gold Has Outperformed The Dow/S&P 500 Year To Date

Although it may not “feel” like it, the price of gold has been in a nice – albeit “controlled” –
uptrend since late December (1-year daily, Comex continuous futures contract):

Gold is up over 12% since 12/22/16. By comparison, the SPX is up 7% and the Dow Jones Industrials index is up 6%. AAPL is responsible for 13% of the SPX move higher and 25% of the Dow move higher. The primary drivers of gold besides elevated geopolitical risk are the expectation of an easing of monetary policy and the fall in value of the U.S. dollar:

While I don’t think the effort will yield any success, the only way the Trump Government can stimulate economic growth other than by printing another few trillion and distributing it across the population, is to attempt to stimulate the demand for U.S. exports globally by devaluing the dollar vs. the currencies of our primary trading partners (Canada, Europe, China).

As with any form of Government intervention, this will further destabilize the U.S. financial system. That said, most other major industrialized countries (except for Russia) are devaluing their currency vs. global currencies in order to bolster their export industries.

After today’s employment report, in conjunction with the negative economic reports released earlier this week, it’s likely the Fed’s next policy shift ease monetary policy and further enable the expansion of credit.  When this reality hits the market, the hedge fund algos will take gold and the mining stocks higher.

The above analysis is an excerpt from the latest issue of the Mining Stock Journal.  The stock featured in this issue is up over 4% today.  Learn more about this newsletter here:  MSJ Info.

Analyzing Gold & Silver Stocks: Avoid Barrick

Lior Gantz of the Wealth Research Group invited me onto this show to review Barrick Gold as an investment.  It was an interesting proposition because I was not given advance notice in order to prepare notes or review Barrick’s financials.  The exercise forced me to focus on an overview of my reservations about the quality of Barrick as an investment and point to the critical financial metrics I review when doing a “drive-by” analysis of a prospective mining stock investment.

Investing in the largest mining companies is like investing in IBM instead of the promising emerging technology stocks during the 1990’s technology revolution. The best geologists at the big companies, after they’ve reached a level of financial security, leave to develop new gold and silver projects that are often overlooked or rejected by the big companies. These are the types of investment opportunities that offer the best upside in the sector and these are the opportunities that present in the Mining Stock Journal. In the last 8 weeks two of the companies presented in the Mining Stock Journal have agreed to be acquired (Exeter Resources and Mariana Resources).

Mint Suspends Silver Eagle Production – 2008 Redux?

Silver Doctors invited me on their weekly Metals & Markets program to discuss notable events unfolding in the physical precious metals markets, the meaning of the Mint suspending 2016 silver eagle production several weeks earlier than normal, the bond market blood bath and other market occurrences that are eerily similar to events which unfolded before the 2008 de facto financial market collapse.

IRD is featuring an extraordinarily undervalued gold producer in its next issue of the Mining Stock Journal (out tomorrow). The previous issue featured a sell recommendation that might surprise those who own this particular stock. It also contained trading ideas on some high quality larger cap mining stocks that will bounce back quickly when this latest take-down of the precious metals market passes (likely this week). You can subscribe to the Mining Stock Journal with this link – MSJ Subscription. All of the back-issues are included (email delivery-based).

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Gold, Silver Action: The Criminals Are Still In Charge

Out with the old, in with the old.  Wall Street and  the Fed wants to make nice with Trump so as soon as he accepted the next Presidency, the market manipulators went to work on pushing stocks higher and gold lower.

What happened with the threat issued by the media that if Trump were elected the stock market would crash?  Yesterday Stanley Drunkenmiller issued a proclamation that he sold gold because inflation was coming.  I do not believe that I have EVER come across any reference to the notion that gold in inversely correlated with inflation.  Someone must’ve slipped Drunkenmiller some LSD in his scotch.  But, then again, Drunkenmiller is part of the Soros family, which means he’s the enemy of the people and the truth.

The economic thesis connected to Trump is infrastructure spending and inflation generation.   The insanely overvalued, over leveraged “infrastructure” stocks like Caterpiller and Terex screamed higher the last few days.    But if Trump has his way with his economic ideas, corporate taxes will be cut and the Government will re-do the work Obama did on the infrastructure.   Bridges to nowhere funded by more Government debt.

I’m sure most market participants with at least two brain cells to rub together – which de facto would exclude Larry Kudlow from this human demographic – have figured out that Trump’s game-plan would widen out the Federal spending deficit and further accelerate the issuance of more Treasury debt.  It is likely that the Fed will have to monetize some of this new debt issuance.  This is the perfect recipe for higher gold and silver prices.

What is occurring right now in the markets  is nothing more than a knee-jerk response by the hedge fund algos to the overt intervention by the PPT (the Fed + the Working Group on Financial Markets).  The PPT steps in to get stock and precious metals futures moving in opposite directions and the hedge fund black box computers pile in.

The massive take-down in gold is designed to make everyone feel better about Trump as the new president.  But the price-smashing can only occur in the fraudulent paper gold markets in NY and London.   Drunkenmiller is a fan, not surprisingly, of GLD – the quintessential postcard for fraudulent paper gold derivatives.

Today gold traded flat to up in the physical gold clearing eastern hemisphere markets.  It wasn’t until the Comex opened that the real party for the criminal manipulators began.  At one point, from 11:30 to noon EST 48,239 paper gold contracts were dumped on the Comex:

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48,239 contracts represents 4.8 million ozs of paper gold – over 150 tons.  Close to $6 billion worth of paper gold in 30 minutes.  From 11:30 to the 1:30 Comex close EST, a little over  103,000 contracts were sold, representing  10.3 million ounces of paper gold, or 321.8 tons.  The U.S. produces about 200 tons annually.    Make no mistake, it is no coincidence that this hit on the price gold was gold timed to occur on a Friday holiday after the rest of the world had shut down their trading systems and went home for the weekend.  This is standard modus operandi for the criminals running our system.

The Comex vaults are reporting a little over 2 million ounces available for delivery.  If an imbalance between the futures and the underlying available physical commodity were this wide in any other CME market, the Government regulators would be cracking down on it immediately, no questions asked.  Why is gold different?  The gold and silver markets are the most manipulated markets in the world and the same people doing the manipulation will kept in place under Trump.

The good news is that the physical accumulation going on in the eastern hemisphere will accelerate next week with the lower price of gold.  This always occurs.  This will be the catalyst that will put a floor under the ability of the western elitists to push gold much lower.

I personally bought some physical gold this morning via Bitgold and reloaded some call options on some high quality large cap mining stocks and added to positions in my existing junior mining stock portfolio.  The subscribers to my Mining Stock Journal were given my gameplan last night, including some names of other high quality mining stocks that have been beaten up and are overdue for big bounce.

Why Are Central Banks Buying Mining Stocks?

It was reported last week that the Norwegian and Swiss Central Banks had accumulated large positions in several high quality gold and silver mining stocks.  Why would these bankers want to own producers of a barbarous relic?

This is not some scheme to load up on miners and then dump them into the market to help the Fed/ECB/BOE manipulate the precious metals.  That’s an absurd view.  They would just short shares if they wanted to accomplish that.

The dollar’s reserve status is coming to an end. In fact, the current fiat currency system is coming to an end.  Central Bankers know this better than anyone.  Every western CB has been printing  money and buying worthless assets in order to keep the system from collapsing.  Central Banks that want to survive are also finding ways to hedge their fiat currency-based portfolios with negative beta assets.  Mining stocks are the easiest way to gain exposure to coming explosion in the price of gold and silver.   Also note that Norway and Switzerland are not members of the EU.

We discuss this topic in this week’s Shadow of Truth.  We also analyze the Hillary Clinton health situation:

Full Metal (Gold And Silver) Price Manipulation

I’m not sure of the significance of 20 minutes past the hour, and I’m sure it has some sympbolic meaning to the gold manipulation cabal, but for the last week the price of gold has been getting slammed with an avalanche of Comex confetti at regular intervals at 20 minutes past the hour.

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THAT is not the graph of a market that is allowed to trade freely.   But notice how gold bounces back sharply from every take-down attempt.  This is especially significant given that this is one of the slowest seasonal periods of the year for the buyers of physical gold and silver.

This morning (Tuesday morning) was particularly blatant.  Gold had traded steadily higher overnight from $1344 (December futures basis) to $1364 just after the Comex floor opened for business (8:20 a.m. EST/6:20 a.m. MST).

Whenever the elitists start to lose control of gold, they roll out one of their Fed stool pigeons to threaten the world with a 25 basis point (one quarter of one percent) rate hike at the next FOMC meeting (September).   Today’s park bench popcorn scavenger was NY Fed President, Bill Dudley, who stated on Fox Business that a rate hike in September is “possible.”  I guess that means September’s meeting is a “live meeting” – a phrase Dudley and SF Fed Prez, John  Williams, propagated the mainstream media propaganda meat grinder with in May – LINK .

But gold shrugged off Dudley’s empty, Straw-man threats and closed today respectably up about $5 from the close of yesterday’s afternoon “access market” trading session.  I still believe that gold could see $1500 by Halloween despite the Comex B-52 paper bombs being dropped religiously on the market.  And we are just one economic, political or societal catastrophe from gold making a rapid run toward $2,000.

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Buy every manipulated sell-off in gold and silver.  It’s the true “TINA” idea.

A lot of readers have asked me if it’s too late to buy mining stocks at this point. I refer them to a long-term graph of GDXJ so they can see where the junior miners have been relative to the level at which they bottomed. It’s a prototypical chart of a market that is in the early stages of a massive move higher. The key is to identify the exploration companies that have a high probability of hitting the proverbial pot of gold. The last 5-years caused a lot of damage to the junior sector, but there’s a lot of companies with “a pulse” that have been revived, albeit significantly undervalued from a risk/return standpoint.

My Mining Stock Journal is focused on finding companies that are currently overlooked by the mainstream mining stock analysts and newsletters. As an example, I presented a stock idea in mid-April that is up over 280%. It recently doubled in price shortly after a major newsletter service poo-poo’d the idea. I draw on several seasoned veteran contacts plus 15 years of experience researching and investing in this sector. You can access the MSJ – a bi-weekly report – here:   Mining Stock Journal.

I just received your August 4 Stock Journal and before getting to your suggestion and half way through your guidelines for picking stocks I wanted to write this first. I have attempted to find those obscure companies and must say it is most difficult. Upon reflection I should have just waited on your bi-weekly report because your picks have been awesome. – “Jim”

Silvercrest Metals May Be The Stock Of The Year

Silvercrest Metals was formed by the former management of Silvercrest Mines, which was acquired by First Majestic in 2015 for $154 million.   The primary property interest for Silvercrest Metals is the Las Chispas project.

Silvercrest’s trench samples showed the possibility of high grade silver mineralization on the property, which is believed to have historically produced about 120 million ozs of silver and 200k ozs of gold through 1930.    Silvercrest confirmed the high probability of a prolific silver deposit with the release of its first drilling results:

“The initial Las Chispas drill hole results received to date are impressive. Not only do they indicate bonanza grades of up to*** 18.55 gpt Au and 2,460 gpt Ag or 3,851.3 gpt AgEq*, but also show mineralized widths up to 7.2 metres in estimated true thickness. These first results have exceeded our expectations and appear to confirm that historic mining completed in the early 1900’s has left behind substantial unexplored, unmined and easily accessible high grade mineralization.” – Eric Fier, President and CEO   Press release.

I first presented this stock idea to subscribers of my Short Seller’s Journal in January at $0.11/share.  At the time I had not rolled out the Mining Stock Journal.  MSJ subscribers in general were able to get into the stock in the mid $0.20’s.    This is the kind of value I bring to my subscribers vs. much more expensive/promotion-oriented newsletters.

The current market cap of Silvercrest is $80 million based on Monday’s closing price.  If the quick trade that occurred Tuesday at $2.28 is indicative of where the stock will trade when it frees up to trade Wednesday, the market cap would be $116 million (fully diluted).

It’s tough to value SIL in the context of what AG paid for Silvercrest Mines.   The latter was an operating mine which is estimated to have 56 million proved/probable and measured/indicated silver-equivalent ozs of silver, with huge exploration upside.  SVLC also included the very promising La Joya project.  The price of silver was around $16 at the time the deal was announced.    One Santa Elena’s most attractive attributes is its extraordinarily low cost of production.

I personally believe the price of silver is headed to much higher levels.  If Las Chispas turns out to be a “blueprint” of Santa Elena,  Silvercrest stock could be worth worth several hundred million at $35 silver.  The drilling results very preliminarily indicate the possibility that Las Chispas could be bigger than Santa Elena.

My objective with the Mining Stock Journal is to find junior mining stock ideas that are not followed by most, if any, mining stock sector analysts and newsletters.   The best upside potential for an investment is to invest in great ideas before the herd piles into a stock.

I am finding that the carnage of the last five years in the sector has created several interesting opportunities to invest in high probability exploration projects at close to “ground zero.”    In fact, in the next issue I’m presenting a company that is getting ready to poke holes in the ground in a property that is an interesting location which appears to have significant gold mineralization.  The Company is fully-funded for an extensive drilling program.

I am a subscriber to your mining stock journal. I haven’t acted on all the mining-stock-journal-bannerrecommendations, but i did act on SVCMF at 0.26 and made a second purchase at 0.57. Today it is up to 2.29, with big action last week and today. Thanks for your recommendations and the Mining Journal you create!!  – subscriber “John”