I've been working on a new book about investing in junior resource stocks for quite a while now. I haven't actually written anything but I have been aggressively thinking about actually writing. Someday.
When I do a book, I'm like a cow chewing a cud. I munch and munch and eventually I sit down and start typing. I've pretty much got the book written before I feed a sheet of paper into my printer. I spend a lot of time thinking as I chew.
Buying resource stocks has nearly nothing to do with the commodity. And near zero to do with management or country risk or interest rates or the dollar or what the DOW is doing. Those who are always wrong about markets spend a lot of time mumbling about all those things and they are just wasting ink.
Unbeknownst to GATA or the other PermaBulls who believe some munchkin at the Federal Reserve pulls the levers all of the time, markets go up and markets go down. They all do and they do it constantly. So if someone is telling you silver is the rarest mineral known to mankind and it should go up everyday of the week, forever, he's lying to you in order to get you to pay for a subscription to his service. In short he's like a bible thumping preacher or politician, he wants your support and he specializes in telling you the lies you want to hear.
During the bull phase of the metals markets even the biggest piece of crap stocks go up. During the eventual bear phase of the metals markets even the best run with the most desired commodity in the safest jurisdiction goes down.
So investors in junior resource stocks need to keep two things in mind. You have to trade markets and take a profit when you can or the only alternative is to take a loss. I have had hundreds of investors tell me their biggest mistake was not taking a profit when they could. And given that something like 95% of investors in junior lottery tickets lose money, sell when you can, not when you have to.
You need to align yourself with the phase of the market you are in and let the wind be on your back. We had major lows in 2001 in gold and silver, again in 2008 and late in 2015. Don't try to second-guess the market. If you were a buyer of anything from 2001 until 2008 you had a wonderful opportunity to profit. If you bought in 2009 or 2016, it was like shooting fish in a barrel. If you didn't sell in March of 2008 or September of 2011, you got creamed regardless of the merits of the project or company. The phase of the market will either put money in your pocket or extract it regardless of what anyone says about a company
I'll give you are great example that pretty much proves my point. I introduced my readers to American Pacific Mining Corp. (USGD:CSE) in May, right at two months ago. Since I pretty much covered the important issues, you should go back and reread it.
American Pacific's jewel in the crown is the Tuscarora gold project in Nevada. It's a favorite of Quinton Hennigh who drilled it many years ago when he worked for Newcrest. Discovered in 1875, the district has had past producing high-grade gold mining done. Novo drilled it but it was back burner target and Novo optioned it to American Pacific a year ago.
American Pacific just completed a 16-hole drill program. On the 28th of June they released the first five holes with excellent results. Over the next month or so, the company will be releasing the assays from the next 11 holes. So what has the stock done over the past few months? It's gone down. At $0.36 a share on May 4th, it's dropped almost 50%. But the project is the same, the management is the same, the country risk is identical but the price is down a lot. Because stocks go up and stocks go down and you either ride the tide or you drown.
I'm on record calling for a low about now. The DSI is in place, the COTs are more or less favorable and if we saw a washout in gold shares it would be wonderful. The tide is about to come back in and when it does, it lifts all boats.
American Pacific is an advertiser. I have participated in the PP and I still own shares so I have to be biased. But the July rise in gold and shares is about here and for the next two months the wind should be on our backs. Do your own due diligence.
American Pacific Mining
USGD-C $0.20 (Jun 29, 2018)
USGDF-OTCBB 32.6 million shares
American Pacific website.
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: American Pacific. American Pacific is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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