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Gold and Silver – Is Capitulation Near?

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I really do hate gold and silver… This pathetic asset class perpetually disappoints, over and over again. So yes, I totally get why long-term investors and anyone who follows more the Buy and Hold Forever model would find it appropriate to castigate such a “useless” investment gamble gamble.

For the lazy person, your analysis can reach conclusion by simply pulling up a 5 year share price performance chart of some industry leading (wow, what an oxymoron) names in the gold/silver sector.

  • VanEck Vectors Junior Gold Miners ETF (GDXJ) is down -44.2%, over 5 years.
  • VanEck Vectors Gold Miners ETF (GDX) is down -37.2%, over 5 years.
  • Barrick Gold (ABX) is down -47.9%, over 5 years.
  • Goldcorp (GG) is down -64.5%, over 5 years.
  • First Majestic Silver (AG) is down -65.3%, over 5 years.
  • Etc.

Ok, those results are just downright ATROCIOUS! I mean seriously, I can’t decide if that’s more funny or sad… it is so abysmally bad…

Now, let’s compare results to some real HIGH QUALITY investments!

  • Facebook (FB) is up 200.5%, over 5 years.
  • Amazon (AMZN) is up 370.4%, over 5 years.
  • Apple (FB) is up 173.7%, over 5 years.
  • Netflix (NFLX) is up 611.6%, over 5 years.
  • Alphabet (GOOG) is up 116.4%, over 5 years.
  • Etc.

OMFG, it’s beyond a night and day difference…

Anyway, I’m not gonna scold these miners too much, I mean, it’s not all their fault that the metals they mine can never, you know, actually go up in price… and stay there for any prolonged period of time without self-destructing… again and again…

I mean, just look at this 10 year chart of silver for crying out loud!

The chart above is so FUGLY that I just had to tweet about it, earlier today.

 

Also, lots of great commentary from my good buddy @HHorseman.

 

So, there you have it…

Besides, I’m someone who believes in a thing called “reversion to the mean”, no matter how preposterous it might sound right now… I do believe, ultimately, at the end of the day, gravity is very real and as great as those BLUE CHIP tech stocks are, they can’t keep going up forever and ever, while at the same time those shit mining stocks descend to ZERO.

Sigh… Call me a (delusional) bloody optimist…

Here I go trying to be all contrarian again…

As readers who have followed me for awhile know full well by now, I’m just a sucker for beaten up to a bloody pulp and hated asset classes… I’m really more a macro trends follower, and into stuff like Blind Dart Investing.

No, I don’t think there’s yet quite enough “blood in the streets” where things in the gold/silver complex look anywhere near as bad as late 2015/early 2016, but at the rate things are going now, we are getting there in a hurry!

Capitulation could be near… Or who knows, maybe this is it indeed!?!

For anyone who doesn’t remember (or know) what the Depths of Despair looks like, let me show (frighten) you with this…

Reminisce one time… Back in late 2015.

From January 19, 2016.

Depths of Despair 1_19_16

Nasty, nasty, nasty stuff!

But you know, as useless as gold/silver are, they aren’t THAT useless… In other words, no matter how much stronger the USD gets, gold/silver aren’t gonna go obsolete anytime soon, so it’s NOT like we have to worry about these metals going the way of the dodo bird (or shitcoins)…

Cycles and waves.

Buy low and sell high.

Easier said than done, I know, I know…

But there’s a reason why I keep paying attention to decimated sectors… That risk vs. reward becomes more and more advantageous (in YOUR favor) everytime the share price of these companies collapses more and more and more… and destruction can be felt widespread across the sector…

If you’re lucky enough (like I was in 2016), the following performance returns can be made possible when you knuckle up and buy during the Depths of Despair (and believe me, it’s NOT easy at all to do).

My Biggest Wins

You get the idea…

Anyway…

I’m being very serious when I say that I hate the mining sector and really wanted to be done with it for good this year…

But not surprisingly, many metals (particularly gold and silver) decided to shit the bed again… So, here I am, back for more… like a true sucker gambler…

Can you really blame me? I mean, just look at this chart!

C’mon, really… If you’re into “buy low and sell high“, how can you possibly ignore the chart above?!?

Commodities are cheap as ffff, relative to most other asset classes out there…

With so much going on at the moment, I’m planning on writing up a Mining Stocks Report over the weekend; there, I will go over market thoughts and investment ideas. I’ll also share some of the stuff that I’ve been doing with my own capital too.

Thank You Newsletter subscribers will get a copy in their inboxes as soon as it’s completed.

For anyone else interested in this update, I’m thinking about using this great opportunity to start trying to generate some online revenue (which is a new goal for me moving forward).

 

Will keep you all posted.

 

Happy Hunting!

{ 1 comment… add one }
  • SamerNo Gravatar August 24, 2018, 6:05 am

    Dear Jay:
    Hi 🙂
    Can’t wait …” Mining Stocks Report”.
    Keep up the excellent effort!
    Samer

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