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There
is only one difference between a bad economist and a good one: The bad
economist confines himself to the visible effect; the good economist takes
into account both the effect that can be seen and more importantly, those
effects that must be foreseen. The bad economist pursues a small, present
good that will be followed by a great evil to come, while the good economist
pursues a great good to come, at the risk of a small present
evil. - Frederic Bastiat
(1801-1850)
HISTORY�S BEST GOLD STOCK BUYING
OPPORTUNITY
As predicted, knowing the Natural Laws of Economics� lower PM prices will
only exacerbate this West-to-East flow [of gold] that has emerged. I therefore
thought that the bullion banks and central banks would not have dared push
that dynamics this far."For the last few
weeks, I've been convinced that we're approaching history�s best gold
buying opportunity... Why do I think that? Because a group of government
supported gangsters, using every illegal trick under the sun, drove down the
$ price of gold while the regulators, media and the government looked the
other way. Nobody but nobody was looking after the interest of the people of
the United States of America and by the way, the people of the world: If you
are rich enough and well connected enough, the laws
of the land no longer matter.
But until now, I've been waiting patiently for the right time to re-enter the
market. As you all already know, I'm not into gold buying or trading for the
short term. I'm investing based on where I expect gold prices to be over the
next 3 to 5 years. And right now, almost every stock that I'm investigating
is so undervalued that some are even trading at or below book value; even
more undervalued than they were in 2008. Not having a Crystal Ball, I simply
can't wait any longer. Start accumulating on weakness NOW!
That's why I'm issuing my first new buy recommendation in a long time. This
bull market has gone on for a record 12 years (no other bull market that I
know of has ever lasted 12 years). You may recall that as far back as
2005, I first projected a target price for gold of $6,250 by 2017 - the only
conclusion I can come up with is that there is at least another 4 years left
for this GOLDEN BULL yet to run.
The recent pullback in gold bullion prices should be seen as a correction in
an ongoing bull market. I see the pullback as a fantastic buying opportunity.
The news headlines flash a bearish sentiment towards gold bullion prices, as
all the �Johnny Come Lately� self-proclaimed gold experts that have recently
turned bearish are now screaming about how much money has been lost due to
the plunge in gold prices and the gold miners are facing government and
environmental pressures as well. Also, the largest new gold and silver mine
has had a major, structural cave-in and Barrick�s
largest 18 million ounce mine in Peru has been forced to shut down for at
least a few years due to legal problems with the government. And the list
goes on as cash strapped Socialist governments around the world try to grab
as much money as they can, with the foolish support of their people, which
will only cause huge job losses and zero money going to their respective
governments.
However, there is always a silver lining to every cloud and that is the gold
supply will be reduced, putting further upward pressure on prices. Meanwhile,
the usual biggest gold bullion consumer countries, like India and China, are
experiencing record demand.
MORE AND MORE IT�S REMINDING ME OF LATE 1979/EARLY 1980
(Go to the archives and read my July 2005 article �21st
Century Gold Rush�)
According to the All India Gems & Jewelry Trade Federation, India is
experiencing its greatest demand this year as gold bullion prices have
declined. (Source: Bloomberg, April 18, 2013.)
In China, customers are lining up to buy gold bullion. According to the
Director of Sales and Operations at Chow Sang Sang
Holdings International Limited, the number of gold bullion products sold in
the Hong Kong and Macau area during the weekend of April 13th soared 150%.
Other countries in the global economy are witnessing increased demand for the
metal as well. As talk of gold bullion entering a Bear Market continues,
consumers from countries like Australia and Japan have ramped up their gold
buying. Gold bullion sales at the Perth Mint in Australia have soared.
The Treasurer of the Perth Mint, Nigel Moffatt, commented on this situation
by saying, �the volume of business that we�re putting through is way in
excess of double what we did last week.�
In Japan, at Ginza Tanaka, a precious metals store in Tokyo, gold bullion
buyers waited for three hours to buy the metal. (Source: Reuters, April
16, 2013)
In spite of all the drivel I hear from the gold bears, I am more bullish on
gold than ever before. The reality is that central banks will continue to
print paper money no matter what. They don�t have any other option (or so
they think). But the more paper money they print, the greater the fall in the
value of their currencies. Do the bears NOT realize that central banks
have moved away from being net sellers of gold and have become net buyers for
quite a while now? And in 2012, central banks bought the most gold bullion in
48 years. It would not surprise me to find out that central banks have also
been buying more gold bullion in 2013, just like consumers are doing right
now; not only in India, China, Japan, and Australia but throughout the world,
except of course the US, Canada and Britain, the prime price manipulators
(whom I suspect have already gotten rid of all their gold).
Gold, silver and mining stocks stabilized Friday. Thus I re-established a new
fresh re-labeling of the charts for silver and gold. I believe that these new
annotations for the charts do a better job of explaining the waves since 1990
based upon proportionality of waves. It suggests the HUI is finishing an a-down, b-up, c-down correction of the rally from 2000
through 2011. This correction looks to be finishing wave c-down. If correct,
the next rally leg will be a very powerful up wave, as it will be a wave 3-up
of (3) up of III up. The Same thing for silver.
Clearly a few large holders of gold are participating with the central banks
and their whores in a major dump, in an effort to support international
Central Bank policy of massive hype- printing of fiat currencies. Once
exhausted though, gold should resume its long term rising trend. The decline,
trying to look like a crash at this point, but this has produced a selling
exhaustion, as all the stops have been run which then usually sets the stage
for a substantial rally.
I realize that you may be skeptical since the S&P has been on a tear
while gold has stalled for the last 18 months or so.
But when you compare the S&P and gold over the last decade ...
The S&P is up 40% ... as compared to gold which is up 440% ...
That's a more than a 10-to-1 return just for buying and holding the yellow
metal rather than sitting in the markets. While quite a few might
think that the biggest gains in gold have seen their heyday, I think that it
is just about that time to REACCELERATE.
FUNDAMENTAL REASONS FOR GOLDS RISE
Over
the last 2 or 3 months or is it really 12 years (go to the archives at
Gold-Eagle.com) I have already outlined, in great detail, my reasons for
being super bullish on gold and silver, but I am still a one man show and I
am extra tired in trying to uncover something that I may have missed. But I
said it before and I will say it again: �GOLD and SILVER Companies have
never in HISTORY been as much undervalued in relation to the price of their
underlying metals as they are today�. So the best buy today is to buy
Mining Stocks rather than Gold Bullion. If I am right, �you will make 10+
times more money on stock than by buying Bullion�.
UNFORTUNATELY I am to damn old to get out into the
field and do primary research like I did back in the 1970�s and early 198O�s.
But back then there were no such thing as ETF�S like GDX or GDXJ, which you
can buy today But there are a few quality research letters that do excellent
work on individual stocks that you can subscribe to. If you do not know who
they are, email me and I will be happy to send some selections out to you.
IN SUMMATION
My
long term projections for the Precious Metals are still intact ($6,350 by
2017); But you may be able to make as much as 10 times more if you choose the
right stocks.
WARNING: DANGER: More and more of some of the most promising new and old
mines have been shut down, especially in South Africa as well as my most
promising silver mine (MAG SILVER) in what was thought to be friendly Mexico
(still might come back), Barrick�s
18 million oz gold mine in Peru and others in
Eastern Europe and Northern Eastern Asia. There is also one of our long
term holdings, Gabriel Resources, that has just won
a few legal battles and received a favorable political vote and permits. (I
have been holding this one for almost 20 years.) Even if it pays off, I
am not so sure it was all that good an investment considering the time held.
But it is supposed to have 25+ million ounces. There is of course MAG
SILVER which I still own. They just won a few favorable votes, but as you
know they are up against the environmentalists, so that even in mining friendly
Mexico these green whackos never seem to give up. So far, all work is still
on hold. So although our last foray into ETF�S has not been all that
successful I am, for the time being, sticking to GDX and/or GDXJ.
INSTEAD OF BUYING GDX and GDXJ OUTRIGHT, you can SELL
out of the money 6 month Calls while Selling out of the money 6 month
Puts. The worst that can happen to you is that you end up buying 20% below
today�s market OR you get called away making a measly 40%
OIL
Oil,
on the other hand, should also rise sharply, with an upside target of at
least $150, probably hitting $170 as both gold and oil react to serious
political problems with Iran and other war-like trouble spots. The
chart pattern for oil looks to be completing a textbook Rising Bearish Wedge,
a pattern having five waves of three sub-waves each.
How can oil rise so sharply? Possibly in response to a war in the Middle-East
or massive monetary inflation or both. Since I cracked my CRYSTAL BALL, the
future must remain a bit cloudy, so all I can provide is my best guess.
GOOD LUCK AND GOD BLESS
We are entering the most trying times in our
nation�s history is now the time that you want to be going it alone?
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UNCOMMON COMMON SENSE����������������������������������������������������� May 5, 2013
Aubie Baltin CFA, CTA, CFP, PhD.�������������������������������
2078 Bonisle Circle
Palm Beach Gardens, FL 33418
uncommon@aubiebaltin.com
561-840-9767
Please Note: This article is for
education purposes only and is designed to help you make up your own mind,
not for me to make it up for you. Only you know your own personal
circumstances so only you can decide the best places to invest your money and
the degree of risk that you are prepared to take. The Information and data
included here has been gleaned from sources deemed to be reliable, but is not
guaranteed by me. Nothing stated in here should be taken as a recommendation
for you to buy or sell securities.
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