Mining Stocks – A Game of Patience

by FI Fighter on April 10, 2017

in Precious Metals Updates

When it comes to investing, there’s the micro view and there’s the macro view… With the benefit of hindsight, everything ALWAYS looks so blindingly obvious and simple… Well, that’s the macro view

But the micro view (the one we live in and experience day-to-day), man, that shit is tough and it’s very difficult to see the forest for the trees.

How come?

Well, for the most part, it’s just plain and simply boring as hell…

Zzzzzzzz…

Here’s a 2 month chart of the spot price of gold…

Gold is currently range bound and has been having an incredibly difficult time breaking free and clear of $1,260/oz...

There’s a ton of resistance up there…

So, we keep ping ponging back and forth… $1,200/oz to $1,260/oz, over and over… again and again.

And quite frankly, most investors/speculators out there have ZERO patience (not hating here, but seriously ask yourself, “Why do you suppose dividend stocks and cash flowing real estate are all the rage right now in the investing community?“)… Everyone demands instant gratification (it feels like progress)!!!

Well, when you don’t get that, what cha gonna do?

SELL!!!

Here’s an exaggerated example showing the run up experienced by Bear Creek Mining (BCM.V/BCEKF), a silver stock, during the commodities bull market from January 2009 to March 2011, and how your typical retail investor probably traded the stock during this period…

Most people will elect to sell and move on during the “BORING” phase… and that’s why most people never experience the MASSIVE wins!

Momentum and hype ALWAYS win the short-term (don’t go chasing waterfalls)!

It’s insanely difficult to sit back and do absolutely NOTHING!

Especially, when an asset/investment you own is just consolidating… and can’t make up its mind on which direction to move next.

But that’s just how the game goes…

These days, I’ve kind of come to terms that my precious metals stocks won’t be delivering the same type of performance gains that were prevalent throughout 2016. I mean, outside of early stage exploration stories (which will move on drill results more than anything else), the majority of my portfolio holdings are entirely dependent on the spot price of the underlying commodity itself, so my mentality is to simply:

 

Hold on and sit tight.

 

Gold and silver will have their time in the sun again… Someday.

 

Patience. Patience. Patience.

 

Something I really suck at…

 

Nevertheless, I’m convinced that the BIG GAINS made in investing/speculating occur during the periods of time when you do absolutely jack shit.

 

Sure, I’ll trade in and out of positions here and there… Gold and silver stocks are just too volatile to not buy/sell into the ridiculous volatility (buy the dips and sell the rips)…

 

But for my Core Holdings, I haven’t made any moves recently… and I don’t plan on really doing much more until the macro picture changes profoundly again.

 

It’s entirely too easy to get caught up in the micro stuff, so I’m trying to do my best to fight basic human instincts/emotions.

 

Do NOTHING!

 

And…

 

Fight On!

{ 4 comments… read them below or add one }

1 JanNo Gravatar April 10, 2017 at 7:30 pm

Thanks!

Reply

2 FI FighterNo Gravatar April 12, 2017 at 8:10 am

Jan,

You’re welcome!

Take care!

Reply

3 SriniNo Gravatar April 11, 2017 at 6:44 am

My second stink bid at 1.49 USD got filled in Bear Creak yesterday. I am buyer when it goes below AXU. Just love this boring grinding mkt. I expect this to continue until June ’17. Hoping to see a mini crack in price 🙂

Well said, The most important thing to do at this point in cycle is “DO NOTHING”. My stink bids are in place to use volatility to my advantage. Other than that i am not looking at the market on daily basis.

Reply

4 FI FighterNo Gravatar April 12, 2017 at 8:09 am

Srini,

Great buy! And even better timing with Bear Creek! That’s probably my favorite silver play of them all and it’s been trading at very attractive prices as of late. Funny enough, my buddy has been eyeing that one closely as well, and any time it hovers around C$2.00, he gets pretty excited.

Congrats on early retirement and I look forward to hearing more about your journeys!

Cheers!

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