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Gold Stocks, The Next Super Boom

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From another thread:

Gold is getting expensive for the ordinary investor. Take part in the stocks of gold and silver miners. This is the next dot com.

AGQ - 10x from these levels? (For, The Masked Tulip. The founder is a fellow Welshman)

CRND - 100x from these levels?

OMI - 10x from these levels?

YAU - double or tripple

RRS - Double?

FRES - Double?

HOC - 2-5x from here?

Stick them in your ISA for Tax free gains.

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Other non-Isable miners

MARL

SOLG

HGM (Abramovich a major shareholder)

KYS

CEY

MML

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Gold Euphoria

With what has happened in the world of late and what will be unfolding in the next 5 years or so those few investors who fully understand the impact the current economic situation is going to have on future inflation, the USD, interest rates, the stock market, physical gold and silver and gold and silver stocks and warrants in particular are going to be in the unique position of being the benefactors of currently unimaginable returns and wealth. All they need do, as I like to say, is “Just prepare and prosper!”

Back in the mid- to late 1970’s, as gold went up from its 1972 low of $60 to $850 in 1980 (and silver to $50), gold and silver stocks realized absolutely amazing gains:

· Lion Mines – 1975 price: $0.07 / 1980 price: $380 i.e. an increase of 542,757%!!!

· Azure Resources - 1975 price: $.05 / 1980 price: $109 i.e. an increase of 217,900%!!

· Wharf Resources - 1975 price: $.40 / 1980 price: $560 i.e. an increase of 139,000%!!

· Mineral Resources - 1975 price: $.60 / 1980 price: $415 i.e. an increase of 69,067%!!

· Steep Rock - 1975 price: $.93 / 1980 price: $440 i.e. an increase of 47,212%!!

· Bankeno - 1975 price: $1.25 / 1980 price: $430 i.e. an increase of 34,300%!!

The percentage returns above, averaging 70,627%, seem totally unbelievable but they are verifiable. They were achieved by investing in the right stocks at the right time. Imagine, and the above companies were only a handful of the gold and silver stocks that generated such astounding returns.

To put things in perspective let’s look at it this way. Had an astute investor divided a $10,000 investment equally among the 6 companies mentioned above in 1975 it would have grown to $7,072,700 just 5 years later! I can’t imagine that ever happening again but that is what actually happened back then. It is absolutely amazing, isn’t it? Even a 10,000% appreciation would have turned that $10,000 into $1 million dollars! Remember, it only takes a few good investment decisions in one’s life to be exceedingly successful and that was such a time.

Are you are of the opinion that the U.S. dollar is going to continue to weaken against other currencies? Are you of the opinion that we are going to have significant inflation in the next few years? If so, then we are going to see gold and silver doubling or tripling in price as a result. As such, it is imperative that you invest in either the stocks of the companies that mine the gold and silver and/or in the royalty companies that buy the gold and silver from mining companies at predetermined fixed prices. Better yet, much better in fact, is that, wherever possible, you should purchase certain of the long-term warrants offered by some of the gold and silver mining and royalty companies as a means of realizing your +5,000% returns.

Why Buy Gold and/or Silver Mining/Royalty Stocks instead of Physical Gold or Silver? To Double Your Returns – or Possibly More!

If gold, for example, were to escalate considerably in price (i.e. to $2,000, $3,000, or even more) in the next few years it would have a significantly positive impact on the profitability of the companies who mine it and the royalty companies that buy it from marginal producers. For example, with gold priced at $1,000/oz., and the cost of production at perhaps $600/oz. the gross profit margin of gold mining companies would be 40.0%. If 2 years from now, however, gold were to increase to $2,000 and the cost of production were to increase by only 20% to $720/oz. then the mining companies’ gross profit margins would have gone up from $400/oz. to $1280/oz. or 220%!

That’s called leverage and historically, in a rising market, the ratio for gold and silver mining/royalty shares vs. physical gold ranges from about 2.5:1 for large-cap companies (currently 2.6:1 YTD for HUI companies according to the table above) on average to as much as 6:1 for gold and silver mining/royalty companies (currently 3.9:1 YTD according to the Gold/Silver Companies with Warrants Index), on average and even 10:1 in exceptional circumstances for certain truly outstanding performers. All the more reason for you to do your due diligence to find and invest in those gold and silver mining and/or royalty companies with the right mix of capable management, strong financing, major resources and geographically and politically well-located properties and reap the major benefits of such a surge in the future price of gold and silver.

Why Buy the Warrants instead of the Stock of Certain Gold/Silver Mining and Royalty Companies? To Further Double Your Returns – or More!

For those of you who are prudent enough to do your homework and buy the right long-term warrants associated with the right gold and silver mining and/or royalty companies at today’s undervalued prices, your eventual returns would likely be 1.5 to 3 times greater (currently 1.4:1 YTD for the Precious Metals Warrants Index vs. the Gold/Silver with Warrants Index) on average than had you invested in their associated stocks. For companies whose stock prices go through the roof with monster gains that ratio could even be as high as 5:1.

That’s referred to as leverage-on-leverage or doubling-up on the leverage factor. The catch is, however, that you have to know whether or not the warrant associated with the stock you are interested in buying is the right warrant i.e. has a leverage/time value sufficiently high enough to justify its purchase given the anticipated appreciation in the price of the associated stock. For those who don’t have a clue what a warrant is, which companies have them, which have the best values, exactly how to go about buying them and which on-line brokers are sufficiently knowledgeable and capable of placing American, European, Australian and Asian orders (there are no problems for Canadians placing such orders with their brokers as most such securities are traded on their TSX or TSX Venture exchanges) check out the PreciousMetalsWarrants site below.

Can Gold and Silver Equities Expect +5,000% Returns Once Again?

Using the above ratios the answer is: “Yes they can!” True, not all such companies with reap such returns but a few of the well chosen ones will once again see returns that most gold bugs dream about. All it is going to take is an environment in which some combination of a declining U.S. dollar, rampant inflation (or fear thereof), high interest rates, ongoing financial instability, further economic turmoil and occasional acts of terrorism come together to interact with high gold and silver prices and some trading mania. We are moving in that direction right across the board so it is just a matter of time.

We are in the eye of the storm and when the other side of the vortex engulfs us gold and silver will increase considerably, their associated stocks will go up substantially and their warrants, where available, will escalate dramatically. Those mega returns can be yours in the future if you start today to prepare for that day.

WARNING

GOLD STOCKS CAN GO DOWN AS WELL AS UP. PLEASE DO YOUR OWN RESEARCH. COMPANIES VALUED LESS THAN £200M ARE RISKY INVESTMENTS AND NOT FOR WIDOWS AND ORPHANS. THEY ARE LESS LIQUID ALSO. GOLD, THE COMMODITY IS SAFER AS IT CANNOT GO TO ZERO. IDEALLY RISK NO MORE THAN 2.5% PER TRADE. THANK YOU

And thats coming from a bull!

Edited by Money Spinner

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Can Gold and Silver Equities Expect +5,000% Returns Once Again?

Using the above ratios the answer is: “Yes they can!” True, not all such companies with reap such returns but a few of the well chosen ones will once again see returns that most gold bugs dream about. All it is going to take is an environment in which some combination of a declining U.S. dollar, rampant inflation (or fear thereof), high interest rates, ongoing financial instability, further economic turmoil and occasional acts of terrorism come together to interact with high gold and silver prices and some trading mania. We are moving in that direction right across the board so it is just a matter of time.

We are in the eye of the storm and when the other side of the vortex engulfs us gold and silver will increase considerably, their associated stocks will go up substantially and their warrants, where available, will escalate dramatically. Those mega returns can be yours in the future if you start today to prepare for that day. [/i]

Yes, the scenario you suggest is taking shape. I will be investing in the sort of mining stocks you quote and very shortly. The debts are catching up and the printing presses are becoming breathless.

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I don't know anyone who owns gold stocks. And there are 2 HPC goldbugs who say they have gold, but no stocks. That is a good indicator.

Edited by Money Spinner

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Excuse the nit-pick, but CEY have been on London's main exchange since November 2009.

I also managed to hold CEY within an ISA before this. The reason being that a stock is ISA-able if it is a UK equity of a company which is traded on a major exchange. Therefore, CEY as a dual-listed company became ISA-able even though the UK shares were on AIM. CEY was dual-listed in Australia at the time and that fulfilled the "major exchange" part of the rule.

That's a useful tip for those looking for growth in an ISA. Sometimes I wonder if the rules were designed to make ISAs useless... :ph34r:

Edited by up2late

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Excuse the nit-pick, but CEY have been on London's main exchange since November 2009.

I also managed to hold CEY within an ISA before this. The reason being that a stock is ISA-able if it is a UK equity of a company which is traded on a major exchange. Therefore, CEY as a dual-listed company became ISA-able even though the UK shares were on AIM. CEY was dual-listed in Australia at the time and that fulfilled the "major exchange" part of the rule.

That's a useful tip for those looking for growth in an ISA. Sometimes I wonder if the rules were designed to make ISAs useless... :ph34r:

Sorry, CEY is ISABLE. Good spot.

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Time for gold miners was Nov 08.

Next!

best time to buy was 08, no doubt.

But, gold price drivers the profits of miners and the miners are still substantially undervalued relative to current gold price. They have a long way to go yet. Look at the HUI/gold ratio for the easiest way to spot what I am saying.

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Share Charts for Central Rand (CRND)

Share Price: 1.50 Bid: 1.50 Ask: 1.51 Change: -1.45 (-49.15%)

Spread: 0.01 Spread as %: 0.67% Open: 1.79 High: 2.95 Low: 1.05 Yesterday’s Close: 2.95

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I don't know anyone who owns gold stocks. And there are 2 HPC goldbugs who say they have gold, but no stocks. That is a good indicator.

I bought 5000 shares in ABG at 504p just this week. Short term though for me , as soon as they near 600p i'm out again.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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