gold news

 you know I got into all of the mining stocks I had a couple of spectacular performers one was a 40 bagger pretty huge okay so you guys are both stock analysts and I am more of a I like to go for the sure thing and when I look at every stock index and it doesn't matter which one it is or any of the derivatives of gold and silver like SLV and gelt there's a decay and a loss of value over time if you look at Barron's gold mining index compared to gold from 1970 until today gold is outperformed

the baron's gold mining index by a factor of about 8 times so you get this huge leverage but it's the same thing when I look at the HU I the XA you the GD X the GD XJ doesn't matter divide it by the price of gold or the price of silver whichever one that that index is most heavily in and the stocks out but the gold stocks might go up 3 bucks but when gold goes down a buck the gold stocks go down 4 bucks and so over a period of time I see these losses and I tell people if they're going to go you

know I was lucky enough to buy a whole bunch of gold stocks 53 different precious metals mining stocks mostly silver actually in April of 2003 and I caught the last leg up if you look at the HEI gold ratio the last leg up where there was a major out performance of the stocks versus the gold and there have been many times with their short term they're more trading things not investment so both of you give me your opinions on the stocks and how to play them because one of the things I recommend is that people get

professional guidance if they're going to go for this leverage and the spectacular gains that you can get and I got some spectacular gains back then luckily I sold early enough to protect myself from the offsetting losses but tell me about how you work this because I know Dave's that you really study the mines quite a bit when you're picking things so give me your opinion on all of this well I could take two hours but I'll be back first of all it goes back to what I think's your big

believer in my connect cycles so the cycle that you discussed that you personally participated in was the anything-goes there's a pent-up demand for anything gold and silver especially in the equity side and a lot of cats and dogs flew along with the moose pasture and there were some good discoveries but almost anything that had going some of the name went up so that was the time to participate in the junior mining sector and then after that subsided and we started and in this consolidation period

you really wanted to be where you make money most stocks are based on earnings and who were his money and who doesn't and that was the royalty company so I specialized in the royalty companies like say Silver Wheaton at the time now Wheaton precious metals were there buying silver at five dollars an ounce it sounded 15 20 25 30 35 and so they had a huge profit to the bottom line so that was like almost a no-brainer so if you stayed in the sector which as you say I specialize in and picked the right

mode or modality then you could do well and now we're getting into the last phase I believe we're going to see a run the door like we've never seen before you know we start with the majors it'll move into the mid tiers and it'll get very speculative at the top when we're going parabolic you'll see all kinds of penny stocks with these outrageous names like you know best gold sock in the world calm I mean either who knows what's gonna come up there'll be plenty

of that at the end of the market which is a good indicator for those paying attention and not get too greedy and be willing to take something off the table and as you said you got it cycles Mike you got a look at that dow gold ratio maybe it's time to get back in the doubt I don't know but I'm certainly hmm I do know from them 40 years plus of experience that nothing grows to the moon things do get overvalued even the gold and silver market can we're valued and if that's the case

you've got to have the guts to tell your followers your readers or subscribers look I'm getting out and here's why follow me or not to your own doom in fact not to belabor the point too much but I had a call recently with a guy and he followed my work the whole way through is God when you call the top I called my best friend ah boy who doesn't know what he's talking about I paid you and you told me to sell and I didn't sell I called my friend he told me don't pay any

attention to me now so there you go well what the Dow gold has been telling me since I first discovered it in 2002 or three is that it's from then until today it's it's always been a time to be in precious metals and that there would be a rough road to my the ultimate end but I think the the end is going to come with a dow gold that's somewhere below five it's gonna be like four or three or two or even a one-to-one ratio again I have a feeling with the overshoot that we've had half an ounce of gold should

equal the points on the Dow Jeff what's your opinion on all of this and tell us your strategy for picking stocks so the first thing I would point out is that in the charts that you're overlaying gold and the H UI or the Barron's or whatever that's really true and it highlights that gold is the sure thing and the stocks are more speculative and so anyone who wants to invest in mining sucks they really need to be aware that they are speculating the reason I say to get professional guidance because in

that basket that was in the the HEI index or the GDX gxj whatever basket it is there were some soup for performers but then for every super performer there were two others that didn't perform or under par I write the whole thing down if you get the person that has studied these companies you you can end up with a big winner but like you just said to me it's it's my Las Vegas sorry I interrupted oh one other thing I gotta say David when you talked about the anything-goes there in the 70s bull

market toward the end there was a pantyhose company that had silver in the name that I that got listed in a stock market like in 79 or something they went ballistic because everybody thought it was a silver star right there buying pantyhose yeah and they they rode the coattails of the silver bull sorry I think I remember that that's right that's what will happen like David says probably not till the very end when anything with gold and silver in the name is gonna go up and you know double

and triple in a week and that kind of thing but but the point I wanted to make was that gold and silver miners are not heirlooms they're not things to hold on to forever they do cycle like David is pointing out and so obviously we want to catch them on an up cycle and I think that's what's happening now you know the value of my portfolio was X On January it was very different in March and it's very different today and it's because of his leverage that the gold and silver miners offer to the metal itself so

there's been some dramatic increases recently lots of doubles and triples quite frankly in the mining stocks since March and some even more so I've actually been taking some profits but my strategy is to stay invested for the most part find the opportunities out there that are the most attractive to me and you know use that as my sort of my offense to increase my net worth so I'm very excited about it I think going silver miners are gonna do some very special things over the years they've

done it in the past and if you believe gold and silver prices themselves are headed higher the miners are probably going in two and three times that I'd like to add one more thing that is you know stock markets been the place to be for quite some time and we have a lot of kind of late comers with these Robin Hood accounts and everything coming in the stock market my point is why I think the gold and silver stocks would do so well is obviously the men well not obviously honest to me they're gonna go far higher over the

next you know three to five years but everybody out there has a stock so it's very easy now in today's world to get on your phone or on your computer with a mouse and hit the bye and that's why I think they'll be such a move into the equity side of the precious metals eventually it's not going to be right now where the smart money is kind of stealth money's move back into this market I don't know what your subscriber base is Jeff but I know mine is increased rather significantly and all I

did was put out our track record last year was I had seven top-tier stocks since all seven were up the average between those seven was a 65% gain which was double what the S&P did and these are billion-dollar companies or misses where you can put safe money relatively speaking I mean the gold stocks have the highest beta the most volatility the most risk because of the volatility but nonetheless good stock picker you know picking six out of six and you only have seven in your top-tier list is a pretty

good track record am i doing that well this year the answer's no I'm not but we're still doing well in fact some of them as you said Jeff are hitting new highs now and these are stocks that I've held for years but hey if they're going from here and they're going to or three times two or three times when your money folks is a great return and you don't have to look at every one of these top-tier miners as a speculative penny stock that occasionally goes from 12 cents to 12

bucks but those stories that you hear all the time only happen like one out of 8,000 so it's a real gamble on the on the specular side which I do a bit of but most of the money I focus on as if it were my own which it is because I invest as I show people that I want to Harbor the cash I want to protect it I want to grow and I'm not too greedy I want to grow you know better than the gold market if I can do so in some years we do but in fact most but not always but you know I probably over spoke it

but that's the idea and I wanted to just get that out there there's so many people out there in the stock market now that when these gold stocks go it's got a big audience behind mm-hmm you know one of the things that I noticed when I studied because luckily you know I got into all of the mining stocks I had a couple of spectacular performers one was a 40 bagger pretty huge and and then about 2000 when I was writing my book 2006-2007 I did this study where I took the Barons gold mining index divided it by gold and I

started getting out be focused from 2010 to today pretty much the stocks have pretty much underperformed the precious metals themselves as a group not the individual that not if you're picking the right stock so that's another reason for any listeners if you're gonna do stocks it can give you spectacular performance but always get some professional guidance but one of the things I noticed was that after gold peaked in 1980 the stocks went ballistic on the dead cat bounce that was really

when to be in this stocks was on the dead cat bounce after gold peaked they underperformed up until the peak in January of 1980 but then a few months later Gold crashed when it bounced back up to 650 or 7 something that was when the all the stocks in the Barron's gold mining index really took off so I want to shift gears and let's go to the disconnect between the global economy and precious metals because this is where things just totally get insane and we every day we wake up in the twilight

zone shake our heads how could this be