GDXJ Massacre – Mining Stocks Watchlist (May 30, 2017)

by FI Fighter on May 30, 2017

in Precious Metals Updates

The GDXJ massacre has been a few months in the making and the pain continues… Actually, the bleeding probably won’t stop until sometime after June 17 when the index rebalancing is (finally) implemented.

I like to buy despair, so it’s probably not surprising to readers at all that I’ve been Dollar-Cost Averaging (DCA) on the way down, purchasing shares in tranches (b/c nobody knows where the bottom is).

While many retail investors are panicking and hitting the sell button, others are using these sell-off events as opportunities to load up.

Right now, fundamentals be damned… If a company (quality or otherwise) just so happens to be caught up in the GDXJ, it’s going to get slaughtered… no questions asked.

Here’s my current watchlist.

Quite frankly, all the above names look good to me… Most likely before all is said and done, I’ll probably end up purchasing all/most of those names listed as I continue working towards constructing my very own GDXJ (junior miners) ETF.

This short-term noise doesn’t scare me at all… Again, it’s a wonderful buying opportunity that is being gifted to investors right now.

And this short-term window of opportunity won’t last forever either…

I’m tracking the GDXJ selling on a daily basis…

Here’s last week’s update (share count) for all my holdings (and ones on my watchlist) that are held in the GDXJ ETF.

Still a lot of pain to come, I’m sure…

But like I said, nobody knows where the bottom is, so much caution is advised… My own strategy is to buy somewhat periodically, particularly on days when these stocks are hit the hardest and down 5% or more. Yes, I’ve been far too early with my entry points per usual, but that’s how the game goes when you’re chasing down…

Just gotta have confidence (and faith) that the tide will turn… someday, hopefully soon.

And never forget to book some profits on the way back up to de-risk yourself and reduce the overall cost basis!

Until then, gotta keep up the good fight and not get shaken out.

 

Buy low and sell high.

 

I’d rather get greedy chasing QUALITY assets all the way down into the ground below their 52 week lows as opposed to employing herd mentality by practicing irrational exuberance at all-time highs.

 

I’m convinced the disciplined approach of “being greedy when others are fearful” will lead to better long-term results than the strategy of getting into the game super late after all your friends, family, neighbors, co-workers, taxi driver and hair stylist feeds you info on the next money making hot tip…

 

Short-term pain for long-term gain.

 

Here’s an interesting message I found on a Stockhouse forum, supposedly the response from Klondex Mines (KLDX) CEO Paul Huet.

From Stockhouse.

The above written response is unverified so please take it with a grain of salt…

Regardless…

It’s a trainwreck in the precious metals mining sector right now… As an active buyer, that’s just the way I like it.

 

Happy Hunting!

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{ 18 comments… read them below or add one }

1 SriniNo Gravatar May 31, 2017 at 7:41 am

Hi Jay,

Good to know your watchlist. I get a feeling that your less active in ur blog.

We have Klondex & Teranga in common. I have started nibbling from 3.15 levels. Today got my orders filled at 3.02 & 3.03. Yes i a bitch when it comes to bargaining to the penny. But surprised to get this filled in today. I am tracking klondex from 2013 and Paul has delivered to the dot and exceeded consistently on what he said he will deliver.

My shopping list apart from the ones mentioned will be NewGold & LeaGold apart from adding to AXU , Bear Creak and orca

June is the month load up my friend. Lets hope we get extreme pessimism in the first half.

Cheers
Srini

Reply

2 FI FighterNo Gravatar June 13, 2017 at 4:45 pm

Srini,

Yeah, sorry for the delayed response. I’ve been focused on some other things outside the blog lately.

Klondex and Teranga are two of my favorite mid-tiers. Those are great entry points on both!

Thanks for sharing your shopping list! All those names look solid and I particularly like silver since I think the upside could be immense from here.

Best wishes!

Reply

3 CNo Gravatar May 31, 2017 at 11:43 pm

Hi Jay, I really would like to know what you think about situation at Birimian?
As they are currently not trading and are at a halt but should soon to be traded again I would like to know if you have a bit on insight, have your ideas on risks and chances and how you evaluate.
Thx
C

Reply

4 FI FighterNo Gravatar June 13, 2017 at 4:47 pm

C,

In regards to Birimian, I’m going to try and sit back and be a patient shareholder… They’ve had a ton of issues lately, but hopefully with the old board of directors removed (resigned) things will improve in the future and there will be no more funny business going on behind the scenes…

I’m in contact with some rather large shareholders, and they’ve got good confidence that the new management team in place is first class. I’m just going to let them work through the issues and patiently wait for a news release to update us on what’s going on…

Lithium is a strong market with explosive growth trajectory over the next decade or more, so I’m confident if BGS can sort these issues out that the share price will recover in the future… The asset is high quality, if not world class… As long as the title/permits/relationships with the local Malian government are solid (fingers crossed!), I wouldn’t sweat out the price action too much in the short-term.

All the best!

Reply

5 CNo Gravatar June 1, 2017 at 2:24 am

… and here also a link to discussion on hot copper.
http://www.hotcopper.com.au/asx/bgs

Reply

6 CNo Gravatar June 1, 2017 at 2:27 am

Seemingly my first comment did not go through….

Hi Jay, Just wanted to know how you feel about things at Birimian in regards to chances, risks and outcome after trading halt?
How do you evaluate?
THX
C

Reply

7 FI FighterNo Gravatar June 13, 2017 at 4:47 pm

C,

Sorry about that, looks like your first comment got caught in spam.

Reply

8 JonNo Gravatar June 2, 2017 at 5:47 am

I can’t buy individual stocks, just ETFs. At what point would you recommend buying GDXJ or JNUG?

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9 JanNo Gravatar June 2, 2017 at 3:53 pm

Don’t buy JNUG!!!!!

Reply

10 FI FighterNo Gravatar June 13, 2017 at 4:48 pm

Jon,

I’m not a fan of GDXJ b/c of all the changes… It’s no longer a very good proxy for tracking junior miners…

I would prefer the Sprott “GDXJ” ETF.

http://www.sprottetfs.com/overview/sgdj

Personally, I like to build my own version, but that one is pretty solid.

Cheers!

Reply

11 ScottNo Gravatar June 4, 2017 at 4:57 am

Interesting article on the GDXJ rebalance.

http://themacrotourist.com//macro/gdxjs-epic-rebalance

Reply

12 FI FighterNo Gravatar June 13, 2017 at 4:49 pm

Thanks for sharing Scott! Great article!

Take care!

Reply

13 Tim Kim @ TubofCash.comNo Gravatar June 5, 2017 at 11:24 am

Thank you for sharing your list. I’ve never really been big on precious metals or mining stocks, personally. Although vanguards miners fund intrigues me a bit. I guess it’s a decent hedge play. For a small percentage of one’s allocation. I know ray dalio’s all-weather portfolio puts good at 7.5% allocation and commodities at the same percentage as well.

Reply

14 FI FighterNo Gravatar June 13, 2017 at 4:50 pm

Tim,

The Vanguard miners are too diversified for my own liking… That ETF has lots of base metals as well as precious metals and I think even diamonds if I remember correctly, at one point…

Right now, commodities are cheap, and I especially like precious metals so my allocation into the sector is much larger than what would be considered “normal”.

All the best!

Reply

15 JanNo Gravatar June 6, 2017 at 1:10 pm

How’s your portfolio today? 🙂

Reply

16 FI FighterNo Gravatar June 13, 2017 at 4:50 pm

Jan,

Here’s hoping for more up days! 🙂

Cheers!

Reply

17 ChillywitNo Gravatar June 10, 2017 at 12:16 pm

It’s no secret investors have been front running the selling and subsequent re-buying of companies in the GDXJ. Unfortunately, I’m afraid the profits from these nimble trades won’t be near enough to make up for the losses if gold shares trade significantly lower the next 1-2 months. I say this because a “bull trap” was set after the rise on June 6th, with the weekly candle showing a bearish reversal. GDXJ could possibly decline 20% to revisit the highs of early Feb. 2016 according to my MK II eyeball of the chart. Hopefully, I’m wrong about this and we rally in the summer instead. In any event, I’m presently net short using JDST. If it looks like I’m wrong and the gold stocks rally I’ll obviously sell JDST and be unhedged long.

Reply

18 FI FighterNo Gravatar June 13, 2017 at 4:51 pm

Chillwit,

Thanks for sharing those thoughts! It’s always a good idea to have some spare cash just in case… June 6 just showed how explosive the moves back up can be though, which is why I like to chase these assets down to the ground and buy when there is despair.

All the best!

Reply

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