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The last four or five
years have been a nightmare for many investors, especially those of us
investors in the natural resource stocks. Even though gold and silver rallied
to new highs in 2011 most shares did not follow and have in fact greatly
lagged in performance.
Of course during this
time there have been some companies that have performed well and were big
winners but we know, as well as you, that on balance the natural resource
sector has been a nightmare for investors of the shares of juniors and
exploration companies. Frankly, that’s putting it nicely.
Throughout the darkest
hours we never lost the vision of our dream. The reasons for us investing in
the natural resource shares over the last few years, particularly the gold
and silver shares and our position in gold and silver bullion and coins, has
never changed. All of the reasons for investing in this sector are even more
compelling today than ever: the massive printing of monies by the FED will,
we believe, lead to incredible inflation, if not hyperinflation. Now we have
Japan to open the printing presses. The entire world is awash in debt with no
way out except to print, print and print. This will not end well and
ultimately gold and silver will become investor’s safe haven during the
coming crisis.
While it would not have
been unusual to experience a pullback in the markets, virtually no one,
professional or individual investor, expected what has occurred. The Dark
Side of the Dream, our dream and perhaps your dream, of becoming rich in the
bull market in the commodity stocks is either over or greatly delayed. So
which is it?
The markets never play
out the same way from one bull market to another. This interruption in the
bull market in the natural resource sector will become one of the greatest
head fakes of our time. A great shakeout so extreme that many investors have
been so badly shaken they may never return to buy shares or long term
warrants in the resource sector again. Or will they?
Emotions and investing
are rarely compatible bedfellows. Strangely, investors, frequently, at the
worst of times will sell out their positions because of fear, ignoring all
facts, all reason, and will perhaps greatly regret their decisions. These
same investors will once again enter the markets but not until they can no
longer stand it as the markets are approaching their peaks. The emotions of
these same investors will allow them to overstay their welcome and ride the
markets down into the depths once again.
Most newsletter writers
and analysts are suggesting their subscribers to be buying and buying now.
However, it seems few investors are listening as they are waiting for
something, but what could that be? Fact is, few investors can buy at these
current outrageously low prices, they can not be a
contrarian and they apparently will wait for higher prices which will be
their confirmation to enter the markets. Sure, we can understand there
concern but as the professionals preach, to make money, one must “buy
low and sell high”. This is the time!
What are the charts
telling us?
Our view is that gold is
in a great long-term bull market from the chart above and is consolidating
for the next up leg. Many of the junior mining companies are listed on the
TSX Venture Exchange and you can see above that this has been a nightmare for
those long-term investors. The last chart reflects that the Venture Exchange
is now at its lowest level relative to gold since the beginning of the bull
market in 2001.
Most writers of financial
newsletters currently believe, as do we, that the resource shares will
eventually erupt into a rip roaring bull market before the bull market in
gold and silver ends years from today.
It is always a question
of investor’s perception as to when, if ever, to participate in these
markets.
However, we expect to
fulfill the culmination of our dream within the next 3 years and we
frequently recall the words of one of the legendary analyst in the resource
sector of “the day when there will be no resources stocks selling for
less than $5.00”. Yes, we can wait, as we have learned that patience is
a required skill in the art of investing.
For the investors with
their eyes still open, we suggest the accumulation of the junior mining
shares while they are still available at these ridiculously low prices.
It’s your money, it’s your choice.
Visit our website, www.JuniorMiningResources.com for more information and to sign up for our email
list and twitter account.
Dudley Pierce Baker
Guadalajara/Ajijic, Mexico
Email:
Dudley@JuniorMiningResources.com
Website: JuniorMiningResources
Junior Mining Resources
was founded by Dudley Pierce Baker to bring the best junior mining
opportunities to the attention of investors through his services.
Disclaimer/Disclosure
Statement:
Neither Dudley Pierce Baker, JuniorMiningResources.com,
JuniorMiningNews.com, PreciousMetalsWarrants.com nor TheGreedyGuru.com are investment advisors and any reference to specific
securities does not constitute a recommendation thereof. The opinions
expressed herein are the express personal opinions of Dudley Pierce Baker.
Neither the information, nor the opinions expressed should be construed as a
solicitation to buy any securities mentioned in this Service. Examples given
are only intended to make investors aware of the potential rewards of
investing in Warrants. Investors are recommended to obtain the advice of a
qualified investment advisor before entering into any transactions involving
stocks or warrants.
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