Gold is Heading Below $1,000/oz

by FI Fighter on November 13, 2016

in Precious Metals

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The spot price of gold is heading below $1,000/oz… and probably soon. In fact, “technical analysis” is currently so bearish, that we should probably expect to see gold trading around $700/oz, shortly after that, and who knows, most likely even $250/oz before the end of 2017…

Right?!?

Well, that’s what the popular narrative seems to be at this time…

As was the case during the fall of 2015 and early 2016, the gold bashers seem to only want to come out in full force when the yellow metal is struggling the most…

Need proof of that?

Just this past week, a bunch of new “Why Gold Will Drop Below $1,000/oz in 2017″ articles have started to surface… And my best guess would be that a plethora more of them are just around the corner…

In other words, we ain’t seen nothing yet!

From Investing.com.

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From Seeking Alpha.

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Sigh…

Everyone loves to play “Monday (Tuesday) morning quarterback”, don’t they? Where were these $1,000/oz gold calls back in August?

Nowhere to be found…

Suddenly, everyone has this magical crystal ball that can predict the future and where prices are headed next…

Because, you know, fiat currencies across the globe are just so super safe, reliable, and secure, that nothing crazy should ever be expected to happen, right?

From BBC.

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There have been chaotic scenes outside banks in India, two days after 500 ($7) and 1,000 rupee notes were withdrawn as part of anti-corruption measures.

Some banks ran out of cash. At others police were called in to manage queues of anxious customers hoping to change their savings for legal tender.

The surprise government move is aimed at tackling corruption and tax evasion.

But many low-income Indians, traders and ordinary savers who rely on the cash economy have been badly hit. 

Banks were shut on Wednesday to allow them enough time to stock new notes following Tuesday night’s announcement. There are also limits on cash withdrawals from ATMs.

The two notes accounted for about 85% of the cash in circulation.

From Reuters.

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Of course, despite all the panic, long lines, and overall inconvenience that this whole ordeal is causing for EVERYONE, these very same citizens in India should be expected to have near ZERO interest in purchasing physical gold… right, right? Or so the “experts” are all predicting…

There’s a lot of sarcasm in this post, though I’m sure you’ve picked that up by now… No, I’m not angry in the least bit… In fact, I’m smiling and quite amused by all this…

Hey, I’m an agnostic investor… I’m not a diehard goldbug, but I’m certainly not going to try and rip apart what is perhaps one of the most undervalued asset classes out there at this time

What has changed since President Trump got voted into the White House?

NOTHING!

Well, nothing except for sentiment, which means EVERYTHING in this market!

Just check out what the yield on the U.S. 10-Year Bond did post-election..

10-year-yield

Yields spiked from 1.70% to 2.14%!

Like, overnight…

Seriously, all you “experts” out there really saw this coming?!?

Yes, gold is now selling off because yields are rising, the USD is strengthening, the Fed is expected to raise rates in December, and President Trump has somehow convinced the markets that he will be able to fix everything that ails the global economy with new fiscal policies that support massive infrastructure build outs in America… which will somehow come for “free”…

So, right now, the risk-on trade is back on like Donkey Kong…

Money is pouring outta gold and back into other “growth” assets…

In the short-term, yes, I can totally understand and appreciate why gold is going down… But again, I find it comical that so many investors out there hate the precious metals space so much… I mean, let’s be real here — If you are truly an agnostic investor, you really don’t give a shit, and you LOVE gold when it’s operating in deep value territory, and you ABHOR the stuff when it’s being bid outta the stratosphere…

“Buy low and sell high”.

That’s Investing 101 for you!

As it pertains to gold, whenever the “pundits” come out of the woodwork to bash it, with more and more calls for $1,000/oz on the way, man, that’s my “go to” indicator and rallying cry to start buying up a storm!

But nah man, not many people like to operate in that same fashion (that boggles my mind, really)… Instead, what you find in alarmingly high quantities are so many investors who fall in love with their investments and particular asset classes… Right now, gold is down for the count again, so as is typical, folks ain’t buying! In fact, some of my “favorite haters” on this blog have now made it their mission to come out and rub this downturn in my face…

But I ain’t trippin, because as you all know, I don’t fixate on day-to-day price action… Well, I do if I’m a buyer because I like to gobble up cheap inventory that’s selling off at firesale prices…

That’s how I roll, along with many readers of this blog…

Speaking of deep value, here is a perfect example of that right now!

Sandspring Resources (SSP.V/SSPXF). SSP.V traded as high as C$11.00/share back in 2011 when gold was going absolutely bonkers, and entering “super froth” territory… Since that time, shares of SSP.V have dipped to as low as C$0.11/share

ssp-v_chart

Back to all the gold haters for a minute (who are undoubtedly all retired and super wealthy billionaires because, you know, they are so much SMARTER than everyone else!), I’m certain that these same brilliant individuals were also the folks who were buying up shares of SSP.V hand over fist around the February lows and getting out of dodge at the EXACT August highs…

ssp-v_chart-2

A whopping 658.3% gain in just around six months time…

HOLY SHEET, that’s a big time move!!! With gains like that, you can keep the cash flow/dividends (Shiny Object Syndrome), bro…

But for the most humble of us, we all know that we can’t catch these market tops and bottoms with such pinpoint precision and accuracy as the aforementioned analysts who have us all beat with their infinite wisdom and knowledge of the markets…

No, mere mortals like myself have to accept upfront that I have no fuckin idea where the markets are headed next! The only thing that I can try and do is unearth deep value whenever I can get it… across all asset classes…

In my own mind, I rationalize things like this…

  • Are stawks (S&P 500, dividend growth stocks, FAANGs, etc.) cheap? Hell no!
  • Is real estate cheap (in highly desirable places like: Bay Area, Seattle, NYC, Boston, etc.)? Hell no!
  • Is uranium cheap? Hell yes! (But the sector is currently dealing with lots of headwinds due to excess capacity, which probably needs some more time to drain out.)
  • Are precious metals cheap? Hell yes! (and I strongly believe that all the reasons to own them are more intact now that perhaps ever before.)

 

So, there you go… A simpleton’s take on how to invest… And why I still remain so bullish on gold and silver, particularly the mining stocks…

Back to the Sandspring Resources example… One reason why I like this stock so much is because this company provides insane leverage to the rise/fall in the spot price of gold… Leverage cuts sharply in both directions, which is why if you’re going to buy, it’s best to do so in a collapsing market, not a surging one!

At C$0.40/share, the current market cap of Sandspring Resources is less than C$40 million

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That’s absolute peanuts to pay for what you’re potentially getting here.

Yes, by and large, mining stocks are highly speculative and risky, but in the case of Sandspring Resources, we are not dealing with an early-stage exploration company (the riskiest plays of them all!) that may (or may not) find any gold in the ground… Sandspring Resources, an advanced-stage developer, has been around for over a decade now, and the company has already completed a Pre-Feasibility Study (PFS) on their Toroparu gold deposit, which highlights over 4.0 million ounces in gold reserves!

From Sandspring Resources Corporate Presentation.

sandspring-resource

Realistically speaking, the Toroparu project needs probably somewhere on the order of $1,400/oz gold to work economically, which partially explains why the share price has been under so much pressure lately… When gold tanks, shares of SSP.V/SSPXF drop even harder…

From Sandspring Resources Corporate Presentation.

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SSP.V is down over -30% in just the last month alone!

ssp-v_chart-3

As an investor/speculator, I get a ton of flak from my critics for being undisciplined, unpredictable, and in their words, “too much of a wild gambler who is just asking for some serious trouble.

Call me whatever you want, but dude, I’m also that same guy who likes to buy up assets at a time when they are selling off and most other retail investors are too gun shy to do anything about it!

No, I don’t need to score a 600%+ return on Sandspring Resources for the investment to be worth my while… I’m sorry, but I’m just a mediocre investor who is grounded enough to know my own capabilities and limitations… I’m not quite as skilled as those “experts” who are able to time the markets perfectly and score 600%+ gains in their sleep, on a regular basis…

I know I must sound like a broken record, but I’m simply after deep value… And I see a ton of that right now in the precious metals mining stocks… I don’t mean to single out Sandspring Resources (because there are so many other great bargains to be found right now), but because they’ve got such a massive deposit, it makes for a good example…

Even if those “gurus” are right, and gold does hit that magical $1,000/oz mark, when you’ve got 4 million ounces in proven and probable reserves, we’re still talking about an in-ground value of $4 billion… No, that $4 billion can’t be extracted economically at a spot price of $1,000/oz (which is why all that gold has remained stuck in the ground for so long), but we should remember that Sandspring Resources is a developer/explorer (yes, they are still hunting for more gold at Sona Hill, a prospective high-grade new discovery that is nearby Toroparu) and NOT a producer!

I need to write another article highlighting this important difference, because most retail investors usually mistakenly assume that owning shares of “junior penny stocks” are inherently riskier than with going with a “proven and reliable producer”…

I would 100% disagree with that assessment… It’s NOT always true! As is often the case, there’s a time and a place for everything…

Here are just some quick thoughts on this — If the spot price of gold is cratering through the floor, sometimes it makes more sense to go with a developer/explorer who has no debt on the books and can simply go to sleep until better days return… Sure, a company like Sandspring Resources will still have expenses — General and Administrative (G&A), holding costs, etc., but for the most part, they aren’t overburdened with having to worry about debt service, OPEX to keep the mine churning and in production, labor and large staff, taxes, royalties, etc., which can really devastate a producer, particularly companies who aren’t low cost operators to begin with…

In many ways, Sandspring Resources works as a “non-expiring call option” for anyone who thinks that the spot price of gold will rise, or do well (better) in the future… In the silver space, a stock that I like there is Bear Creek Mining (BCM.V/BCEKF), another company who controls a massive deposit that is currently uneconomical at today’s low metal prices

Anyway, I know that I can’t market time for shit, so I won’t pretend that I can… Just give me deep value, and I’m perfectly happy to buy hand over fist… Granted, nobody likes to catch falling knives, so I try and execute my strategy (to a degree) by buying in tranches… A small parcel here, another one there, dollar-cost averaging (DCA) throughout the duration of the bloodbath… I am able to do what I do because I typically have full conviction in my investment ideas… I NEVER expect every investment to work out splendidly, but I accept the consequence of potential failures upfront and right off the bat…

My thinking is such that if I can succeed with a few/majority of my picks, the aggregate gains made from the winners will more than make up for any casualties (losses) experienced in the process, and thus the overall investment thesis will still ultimately provide a good rate-of-return…

Right now, most everyone is predicting the bottom in gold to occur sometime between now and the end of January 2017… Again, who the hell really knows? By taking the mid/long-term view, I’ve already accepted that even if I were to buy shares of SSP.V at C$0.40/share, if it can ever get back to say C$2.00/share, or C$4.00/share (forget C$11.00/share, that’s a pipe dream at this point!), all this squabbling and fixation on scoring the “lowest price possible” won’t mean a thing! C$0.40/share, C$0.35/share, C$0.20/share

Whatever… In the grand scheme of things (should things play out), if you were in the game, you will have made out like a bandit, anyway!

Oh, and for all you “tinfoil hat” wearing folks out there, here’s a take on what happened on Friday morning…

From Investment Research Dynamics.

Today gold traded flat to up in the physical gold clearing eastern hemisphere markets.  It wasn’t until the Comex opened that the real party for the criminal manipulators began.  At one point, from 11:30 to noon EST 48,239 paper gold contracts were dumped on the Comex:

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48,239 contracts represents 4.8 million ozs of paper gold – over 150 tons.  Close to $6 billion worth of paper gold in 30 minutes.  From 11:30 to the 1:30 Comex close EST, a little over  103,000 contracts were sold, representing  10.3 million ounces of paper gold, or 321.8 tons.  The U.S. produces about 200 tons annually.    Make no mistake, it is no coincidence that this hit on the price gold was gold timed to occur on a Friday holiday after the rest of the world had shut down their trading systems and went home for the weekend.  This is standard modus operandi for the criminals running our system.

The Comex vaults are reporting a little over 2 million ounces available for delivery.  If an imbalance between the futures and the underlying available physical commodity were this wide in any other CME market, the Government regulators would be cracking down on it immediately, no questions asked.  Why is gold different?  The gold and silver markets are the most manipulated markets in the world and the same people doing the manipulation will kept in place under Trump.

Not long ago, Deutsche Bank openly admitted to price rigging and manipulation of the silver market.

From Bloomberg.

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Deutsche Bank AG has reached settlements in lawsuits over allegations it manipulated gold and silver prices, lawyers for traders of the commodities said in court filings.

Attorneys for futures contract traders in two private lawsuits said in letters filed Wednesday and Thursday in Manhattan federal court that the bank has executed term sheets and is negotiating final details for the accords.

The German financial firm also agreed to help the plaintiffs pursue similar claims against other banks as part of the settlements, according to the letters. Vincent Briganti and Robert Eisler, attorneys for traders in the silver-fixing lawsuit, said Deutsche Bank will turn over instant messages and other communications to help further their case. Financial terms of the settlements weren’t disclosed.

“In addition to valuable monetary consideration to be paid into a settlement fund, the term sheet also provides for other valuable consideration such as provisions requiring Deutsche Bank’s cooperation in pursuing claims against the remaining defendants,” attorneys Daniel Brockett and Merrill Davidoff said in their letter Thursday in the gold-fixing lawsuit.

Silver and gold futures traders sued groups of banks in 2014 alleging they rigged prices for the precious metals and their derivatives. Silver traders brought claims against Deutsche Bank, HSBC Holdings Plc, Bank of Nova Scotia and UBS AG. Gold traders additionally sued Barclays Plc and Societe Generale SA.

The traders alleged the banks abused their positions of controlling daily silver and gold fixes to reap illegitimate profits from trading and hurting other investors in those markets who use the benchmark in billions of dollars of transactions, according to versions of the complaints filed in 2015. Of those banks, only Deutsche Bank has reached a settlement.

 

So much for “tinfoil hats”… This shit is blatantly obvious and out there for all to see, at this point…

 

On a side note, I was out exploring HK yesterday (I really need to get back on track with my updates), and I was bored so observed the following…

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gold-1

gold-7

gold-5

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gold-12 gold-14

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After walking about 2 blocks, I got tired of counting… There’s just way, way, way too many jewelry (jewellery) shops in Hong Kong…

Even across the street from my apartment…

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I did walk inside a few shops to check out the traffic, but I was in a rush to be somewhere else, so I didn’t make conversation and ask any of the salespeople what the demand situation currently looks like, after the most recent selloff in gold…

But most certainly, HK of all places is NOT one where the masses think that gold is a useless pet rock that is about to go obsolete… In a sick, twisted way, I sort of would like to see gold breach $1,000/oz, because it would/should be fireworks at all these local jewelry shops… Does anyone out there truly believe that there is enough supply readily available to meet the insatiable demand that would ensue should the spot price of gold actually hit $1,000/oz?

Are you for real?

I’m no “expert”, but if I know Chinese people, they will stomp all over you to get a crack at buying up gold at those low, low, low, prices…

So, I take some solace in knowing that even if “gold is finished” out in the west (thanks to our newfound savior!), at least there’s somewhere else in the world that will still accept (demand) it…

As for the citizens and people in India, seriously, don’t they need to be asking themselves, “Why not gold?

 

Fight On!

{ 22 comments… read them below or add one }

1 RudyNo Gravatar November 13, 2016 at 4:19 am

Hi Jay,

you aren’t alone being bullish on gold.

It’s sale time right now, and the gold is shining more than ever.

To me, the happening in the markets in the last days is just confusing. I’ve got holding in steelmakers from the beginning of the year doing OK. But after Trump elected, the share went nuts, basically the exact opposite of precious metal miners.

And I’m still scratching my head. Maybe Trump has already the “Great Wall of Mexico” approved and starting construction next year with trillion of tons in steel bars. And of course, Chinese and Indian are queuing up to sell gold.

The untouched sector to the Trump frenzy is coal which is steadily up trending from June.

Anyway, I strongly believe in a world markets correction in December… it’s just a gut feeling.

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2 alex gregoryNo Gravatar November 13, 2016 at 9:53 am

Any that you can recommend that trend with the rise in goal like miners etc

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3 FI FighterNo Gravatar November 14, 2016 at 6:34 pm

Rudy,

Good to know that you’re also onboard with the gold thesis! It is a tough time right now, so I’m not surprised the least bit that many retail investors are rattled and too fearful of jumping in.

Buying low is absolutely the toughest thing to do as an investor… It will never feel easy and the right thing to do.

Hope you score some wonderful deals!

All the best!

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4 Financial SamuraiNo Gravatar November 13, 2016 at 6:18 am

I didn’t realize you were still in Hong Kong. Are you getting tired of traveling yet? I miss my own bed after three weeks.

Looks like there’s a lot of volatility in gold. I’ve decided to buy some Textfree municipal bonds instead. Bond market has gotten crushed, and I can’t stomach the volatility as a retiree. Too much capital is at stake.

Sam

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5 FI FighterNo Gravatar November 14, 2016 at 6:36 pm

Sam,

Yup, still in HK and still loving it. Haha, I don’t miss the Bay Area at all, and have no plans on returning there for awhile…

I’ve got the travel bug and will be going on more adventures in the near future… Mostly in SE Asia.

Yeah, do what works best for you… I’m somewhat of a gambler and embrace volatility and high risk plays… So, it’s gold miners for me.

Cheers!

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6 WolfNo Gravatar November 13, 2016 at 2:49 pm

Druckenmiller says he sold all his gold as soon as Trump won. He now sees “growth” for various reasons like infrastructure spend and maybe calling in offshore money taxed to raise $3.2T. From his perspective it might be right, even the over-leveraged stock market might maybe go on for another x months/years, which is long enough for him, and once he smells trouble again, might come back to gold. Does this justify “sub 1000” gold. Perhaps not, as just because there is “no growth” in gold doesn’t necessarily mean it has to go down, especially when things are too unpredictable and Trumpish. I would guess that for Druckenmiller, gold is not worth it unless it produces 30% returns and the like, and he doesn’t need gold as a hedge because he uses other sophisticated hedges.

Last time I checked, his friend Soros was shorting a lot of the stock market. Is that no longer true now?

Can the stock market go on as usual if interest rates are raised? Or is it that this would affect highly indebted ones?

Okay, being an eye-wetting 600 quid down in PM, I have rearranged my wishful thoughts above. I’ll wait and see how the volatility dances round the coming week.

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7 FI FighterNo Gravatar November 14, 2016 at 6:41 pm

Wolf,

Yeah, I saw that Druckenmiller is now out of gold, citing that inflation is coming but that doesn’t seem to make any sense to me as the reason for exiting out… But I’m sure he’s got his reasons and thoughts that he isn’t publicly disclosing… But he did mention he’s bullish on growth and the US economy, so it looks like he’ll be shifting his assets in that direction.

Druckenmiller is an investing guru and one of best (if not the best), but we all have to form our own thoughts and do our own analysis and research… I can never just follow someone blindly, no matter who they are… I actually see that the reasons to own gold are stronger now than perhaps ever before, quite the opposite viewpoint of Druckenmiller…

Anyway, I’ve placed my bets and I can’t see myself changing course anytime soon.

Best wishes!

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8 vivianneNo Gravatar November 13, 2016 at 4:03 pm

Wow, what’s a comprehensive post, I saw some of the articles you posted here too, and I was wondering. As in India now, the PM is taking away the big notes, people are flocking to buy other currency … gold? LOL 🙂 So, like you I don’t see it going under $1000 anytime soon.

I’ve reached FI buy investing in rental property and a tiny bit help from dividends as for cashflow. How do you get money out of gold other than to sell your gold by oz every month? or mining companies paying out dividend?

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9 SriniNo Gravatar November 14, 2016 at 1:06 am

PLS NOTE: No government is sane and india is no different. They are replacing the old 500 & 1000 with new 500 & 2000 paper. New 1000 to be printed soon. This is primarily to pull out black money from mid sized business into the banking system to a) strengthen the banks which is suffering from previous issued bad loans b) Print equivalent paper that didn’t return to the banking system to try and simulate growth without inflation

Cheers

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10 FI FighterNo Gravatar November 14, 2016 at 6:51 pm

Thanks for sharing those “insider” thoughts Srini!

Looks like Indian demand for growth will be tempered in the near-term because of the chaos caused by the cash ban…

https://www.washingtonpost.com/world/asia_pacific/indians-bought-gold-with-bags-of-money-last-week-this-week-nobodys-buying/2016/11/14/99baff04-41ad-4e29-b46e-d3980b975dfb_story.html?postshare=3661479145554292&tid=ss_tw

More headwinds for gold near-term, I suppose…

Take care!

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11 FI FighterNo Gravatar November 14, 2016 at 6:44 pm

Vivianne,

Yeah, I can’t really fathom a scenario where gold trades below $1,000/oz, and even if it does, I would suspect it to only be the paper price… I doubt any retailers will be selling physical bullion for below $1,000/oz as I’m confident demand would be astronomical at that point with many people lined up around the block to buy… So, I could easily see premiums surging to compensate for the low, low prices…

Rental properties are a great way to get to early FI, and perhaps my favorite asset class of them all… I just hate today’s prices which is why I’m not actively looking for more rentals… But I will later, I’m sure of it…

As for miners, if any company pays a dividend, I’m not interested… In my search for deep value, I target the companies that are small caps, have huge growth potential, and certainly not enough spare cash to return to shareholders… For the mid-tiers, I much prefer the companies investing in growth, whether through mergers and acquisitions or exploration drilling…

Paying shareholders a dividend is a waste of capital at this time, as far as I’m concerned. I want maximum leverage to the upside, and paying shareholders will not deliver that result.

Cheers!

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12 TomNo Gravatar November 13, 2016 at 9:38 pm

Wow gold really going down fast.

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13 FI FighterNo Gravatar November 14, 2016 at 6:46 pm

Tom,

Yeah, it’s getting UGLY out there…

All the best!

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14 SriniNo Gravatar November 14, 2016 at 12:57 am

Hey Jay,
I just can’t control laughing when I read your post just now. This is what I wrote in stockhouse over the week end.
http://www.stockhouse.com/companies/bullboard?symbol=v.ssp&postid=25452553 ( Yes I write very rarely in stockhouse in GoldSilverBug77 handle)

Boy O Boy, you are spilling all the secrets ha haa (jocking). I have been buying hand over fist in SSB & AXU along with small adds of AG during correction. Never easy to see the latest buys go down 10% -20% almost for the past couple of days. Waiting to take a dip in BearCreak.
This week is really going to be the week that decides how the mkt wants to go in short to medium term.

About the monetization of 500 & 1000 rs , I live In that part of the world. Its not that bad as its projected in the media, inconvenience offcourse, Queues to surrender old currencies- yes. We are used to seeing much longer queues for more than a dozen reasons in day to day life. I believe people will be scared to hold cash in the immediate future. Part may get channeled to gold but I don’t think this alone will move the needle either way in gold price. But one thig is sure, if Gold goes down lower, there will be more buyers in this part of the world.

Finally to summarize, news channels say and write what general public wanted to hear. Its true for all reasons including Gold / stock & monetization.
Lets watch if 1800 or 1050 (or 800 or 200) the next stop for Gold.
Cheers, Srini

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15 FI FighterNo Gravatar November 14, 2016 at 6:50 pm

Srini,

Haha, thanks for the link! I also got a huge chuckle reading your comment and post, as usual it seems like we are aligned and on the same page.

I loaded up on some more Sandspring (SSPXF) today and Alexco Resource (AXU), so I feel really good about that.

At these prices, I could buy for days and not feel scared… even if prices keep plummeting lower… I love the deep value offered at these valuations. GoldQuest (GDQMF) was the other stock I bought shares of to close out the day… It was a lot of fun, and scary at the same time… Felt very much like Jan 19.

If I was a betting man, I would go with $1,800 before $1,050, but I’ve been wrong more times than I can count, so take that for what it’s worth (next to nothing)… I’m hopeful there’s strong support at $1,200/oz, but if that breaks, all bets are off… In any case, if there is a selloff event, I’ll be buying hand over fist and probably looking at liquidating more rental properties for more funds…

Yup, long-term, I’m a big believer in gold, silver, and precious metals…

No fear at the bottom!

Cheers!

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16 SriniNo Gravatar November 14, 2016 at 11:01 pm

Dear Jay,
Great to see marching full steam ahead. Congrats on the buy . AXU at 1.3 levels is just mouthwatering as its with SSP.

I was sh** scared to say it polite during yesterday’s opening. The support I was referring to in the post for SSP was 0.25 in US & 0.30 CAD. My hunch was telling me that mkt will tank at opening to make a bottom and recover and I was only hoping that it’s a permanent bottom in this cycle. Hence I had my stink bids in SSP at those levels already punched in before market opening. Bang the mkt opened and all my US mkt bids got filled at opening. I was not prepared to see most of my portfolio down 15-20% across the board and the fear took over. Boy o Boy, I went running to my wife’s side to run through my thesis to validate it one more time( I did the same during 2015 Dec interest rate hike and the blood in mining stocks). Her instruction to me yesterday was “Dump all the money into SSP / AXU / Bear Creak / AG (mkt order) and return to bed”
I bought SSP from 0.245 all the way up to 0.27 ( 0.35 to 0.38 CAD) and completed the trade. Have a little dry powder left just in case if there is one more scare after a short recovery.
AXU / Bear Creak – Man I missed to punch in at 1.3. Shoot me. I wish and hope that it’s a miss at bottom of this intermediate correction as any sustained upmove will make us all smile and look genius for the buys we have made over the past couple of days.

I have come to know about Orca gold through your blog and “mining book guy” and wanted to buy into but don’t have dry powder in CAD and Interactive brokers was not letting me buy in US over the counter. Don’t know why.

GoldQuest seems to be an interesting play (potential takeover by Mcewen mining) but haven’t done much digging and also short on dry powder

Below is what 2 of the best guys who have been right from 2011 till date in PM’s had to say ( little history both the guys suggested exit in 2011 and recommended 100% entry into PM by Jan 2016).
1)Support for GDX @ 19.8. Has to stay above. Below this level all bets are off and we are heading to 1050 ( I believe we hit 20.15 before recovering). He also said over the week end that “Bounce early in the week, to setup the last drop”. If 19.8 holds his target is 50-60 in GDX in 12-18 months.

2) Enter 100% long term position if XAU rallies to 81.76

Finally if GDX goes to 50, we should see SSP / Orca / GoldQuest at 2$ each and AXU / BearCreak at 4-5$ level. I know this is why we are attracted to this sector.

All the best and continue to dream Big with strong footing to the present scenario

Srini

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17 FI FighterNo Gravatar November 15, 2016 at 5:19 pm

Srini,

You always leave such insightful, raw, and useful comments 🙂

If you don’t mind, I’d like to screen capture your comments here and use them in a future post since I think the mindset/psychology needed to play this space is critical and something that needs to be discussed in more details.

You’re an investor who really has conviction in their ideas and can buy into immense fear without fear… Rare indeed.

Let me know!

btw, your wife sounds so AWESOME and supportive! 😉 I need to find me a woman like that, haha.

And keep dreaming MASSIVE! Love the enthusiasm and big-time aspirations!

Cheers!

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18 SriniNo Gravatar November 15, 2016 at 10:01 pm

Jay,
I am humbled by your kind words. Feel free to use as you feel appropriate.

I had to go through 2 cycles of ups and downs ( 14 yrs) to understand how market really works unlike smart guys like you who are extremely quick learners. I admire your adapting skills to be profound.

I get fearful a lot and that’s the best sentiment for me. when I am fearful and don’t want to even look into the terminal, its probably the best time to start buying or deploy capital and like wise when I like to admire my portfolio on daily basis and feel the itchy finger to pump more money is when it’s time to check where we are in the cycle.

I am learning from your market experience as well. So its mutual.
Iam equally greedy and hopefully I am smart enough to use my greed to my advantage as well.

About partner, Yes it helps a great deal to get an unbiased opinion on the thesis and helps demystify the ego part. Suggest you truly believe in getting one and Either she will get attracted to you or circumstances will get her closer to you. That’s how it happened to me and had left the finding part to the geologist in the junior companies that we are invested in ?

Enjoyed reading your HK experiences. I liked the part where you said some thing like not taking GPS help but roam around but stop by to smell flower. Happy that you are enjoying the very essence of life.

I have to come up with list of things to do post retiring from day job.

You have my mail id and would love to continue to stay in touch to ride this cycle through and possibly many more cycles to come.

Cheers
Srini

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19 Investment HuntingNo Gravatar November 14, 2016 at 7:58 am

Thanks for the tips. I just put in limit orders on both of these stocks. Hopefully I can catch them near the bottom.

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20 FI FighterNo Gravatar November 14, 2016 at 8:38 am

Nathan,

Good luck! Total bloodbath this morning… The selloff in miners continues and things are getting really NASTY! Feels like last fall, and who knows, maybe we’ll grind ever lower until we get another Jan 19 event again…

As I mentioned in the article, I can’t time these things, I just know when cheap is cheap… and now we are getting dirt cheap…

Picked up some Alexco (AXU) and GoldQuest (GDQMF) this morning, both down by over -15% or so at the time of purchase… GDQMF even hit -28%, so insane!

Will keep readers updated and write a purchase post tomorrow morning (HK time).

It’s crazy volatile out there right now… Best of luck to everyone!

Cheers!

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21 ANo Gravatar November 14, 2016 at 2:38 pm

As you said well J, these are awesome times to pickup certain stocks. I wish I had more capital to buy… I’m going to try and figure out side hustles to buy more stocks. Maybe black friday came early 🙂

A

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22 FI FighterNo Gravatar November 14, 2016 at 6:52 pm

A,

Definitely agree with you there, wonderful opportunity to pick up some beaten up gold/silver miners at this time!

Haha, just like you, I feel like I need to figure out a way to generate some more side income b/c I want to buy a ton more of these mining stocks! 🙂

Best wishes!

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