Mining Stocks – The Carnage Continues! (May 4, 2017)

by FI Fighter on May 4, 2017

in Precious Metals Updates

Mining stocks are beyond volatile… Obviously, that’s a HUGE understatement as recent price action in the sector will clearly demonstrate. Well, the smackdown continued today and right now things are looking pretty bad…

For starters, the spot price of silver has been getting absolutely CRUSHED! Silver is down like 14 consecutive days in a row… I don’t think that I’ve ever seen anything this nasty before…

The precious metals mining stocks haven’t been doing much better, and one could argue that their recent performance has been even more putrid.

Here are some names I am eyeing in the sector and their returns year-to-date (YTD):

A massacre… Total blood bath… Red Wedding…

Things are starting to get so bleak that I’m getting the following text messages each day from friends:

Conversation 1:

Conversation 2:

Etc.

To add insult to injury, we have this:

From Business Insider.

 

WTF… It feels like we’re living in the Twilight Zone…

 

Anyway, will the pain continue for precious metals and the miners?

Probably…

But you know what they say, “Buy low and sell high.

I’m not saying I can predict the bottom, but for many of these stocks, they are entering (or in) oversold territory.

The following charts the 14-Day Relative Strength Index (RSI) YTD.

Straight up — When the going is good, it’s very difficult for me to try and identify compelling stocks to buy from a risk vs. reward (and valuation) perspective… When the going is despair, it’s very easy for me to find attractive deals… They are a dime-a-dozen… Plentiful… All across the sector…

This sell-off is NOT an isolated event only impacting a single company…

It’s sector wide!

When it comes to investing/speculating I’ve found this to be so very true — The toughest thing to do is to buy low! You almost ALWAYS feel like a moron when you’re doing it… When the consensus/sentiment/narrative is that prices can and only will continue to trend lower (like right now) we are entering into one of those rare windows of opportunities where we can buy at bargain basement prices.

Precious metals mining stocks are in the toilet right now… Almost nobody wants em… There’s no competition for the cheap merchandise…

My rental property should be closing sometime in the next two weeks… Perfect timing!

As crazy as it may sound to most people (not readers of this blog who already know I’m insane), I feel like a kid in the candy store… again!

Nope, we aren’t yet operating in the Depths of Despair, but we’re getting damn close…

 

Please note: Mining stocks are risky as hell and it’s very easy to lose your shirt playing in this space, so please, nobody should rush into the game without doing some serious research and due diligence first. I never give out investment advice, ever, but I just share with you all what I’m doing with my own money.

 

I believe that big fortunes are made when we “buy low and sell high.” I seldom get the timing right, but without a doubt I feel like we are now entering an interesting period of time that someday in the future we’ll look back on and fondly say, “Those were the good old days to be backing up the truck!

 

Happy Hunting!

{ 4 comments… read them below or add one }

1 SriniNo Gravatar May 6, 2017 at 8:29 am

Jay,
Whats the watchlist of juniors you have built / building. I will be starting to prepare my list for the new fund marked to utilize this carnage other than the ones i already own and would like to add to it. Was not tracking markets for the entire april month and first week of May and glad it happened that way.

Early FI / Retirement is exiting and the full April Month passed by without realizing as there was lots of things to do. May is Second month and have some trips planned with family. Over all life is good and very relaxed. No targets, No meetings, No client calls, No Corporate nonsense ha haaa…… All is well from my end

cheers
Srini

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2 KevinSNo Gravatar May 7, 2017 at 2:20 am

I’m dollar cost averaging into the PM space over the next 3 months of summer doldrums…..bring it on!!! 🙂

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3 Income SurferNo Gravatar May 7, 2017 at 10:17 am

I’m getting right excited about the downdraft as well Jay. I picked up a slug of PAAS on Thursday, for my usual PAAS swing trade. I’m looking to add to my KLDX and FSM positions, while buying back my FNV position I sold at over $70. I can’t hold metals/miners for the long term, but when I swing trade…..it’s usually in this volatile space.

Happy Value Hunting buddy
-Bryan

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4 ScottNo Gravatar May 9, 2017 at 12:42 pm

Klondex KLDX is too tempting at these levels. Bought some today. Falling knives be damned.

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