It’s A Fire Sale In The Mining Stocks

Many junior micro-cap exploration stocks have experienced sharp declines. Low relative liquidity in these names contributes meaningfully to the decline in share-price because for many of these these stocks, most of the trading occurs by the retail shareholder base, which is often 50% or more of the shareholder distribution. When markets get turbulent, the knee-jerk reaction from most less-experienced retail investors is to hit the sell button.

But, assuming the bull-cycle is intact, and I believe it is, this will set-up buy/add opportunities for those of us with “stronger stomachs” for volatility (e.g. Eric Sprott is not selling mining shares – he’s waiting for the much bigger move that’s coming and, if anything, he’s adding to his holdings).

Chris Marcus (Arcadia Economics) and I discuss the elections and the implications that the final outcome will have on the precious metals sector in our weekly podcast:

The junior “micro-cap” exploration stocks have experienced 30-50% pullbacks over the last 6-8 weeks. In most cases this is nothing more than the hot money momenturm-chasers who piled into these stocks during July and August unloading their shares – in some cases at a loss. They don’t know what they are doing. I will featuring in my next issue of the Mining Stock Journal several stocks that are now set-up for huge moves. You learn more by following this link:    Mining Stock Journal information. 

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