In this issue...

- Editorials

- Podcast

- Premium Snippet

Editorials....

This week we wrote en editorial titled: Precious Metals- Keep it Simple. Investing success requires diligence but also patience. In our article we conclude:

The plan of action should be fairly simple going forward. If the metals break to new lows, one should begin buying after the breakdown. Specific targets have been discussed with our subscribers . Regarding the shares, one should begin accumulation on a retest of the low. What happens if these markets firm? In that case, wait for support to be confirmed and then accumulate. It is simple but it requires constant patience. In the meantime, if one is too heavily long they could consider hedging their exposure with the inverse ETFs.

We also want to direct your attention to two great editorials:

Precious Metals Update- Tiho Brkan

Rise, Platform, Blowoff, Correction: Gold is Fine- Gary Tanashian

Podcast...

Yesterday we spoke with Tiho Brkan, author of the Short Side of Long Blog and a fund manager in the Asia-pac region. Tiho discusses Gold, Silver and Agriculture. When Tiho speaks, I feel as though I'm a student and he's the teacher. 

Listen to the interview here.

Premium Snippet...

Yesterday we published an update which was sort of an intro report on the development sector within the precious metals sector. (The sector could be divided into large producers, growth producers, development companies, and exploration companies). We post part of our conclusion for you:

Generally, I’m not a fan of development companies as their projects tend to be years from production and its difficult to appropriately value these companies. Why own a big development company if its upside is not much more than a double or triple? I’d rather own an (withheld) or (withheld) and be more confident of the result. All this being said, there are two reasons why its time to seriously look at the development companies. First, they are presently at the bottom of that “life cycle of a junior miner” chart. 85% of the risk has been priced out of these stocks with that figure potentially reaching 100% in July or August. Secondly, these stocks are big enough and leveraged enough that they can produce fantastic rebounds in percentage terms.

 I don’t know for sure but I’d guess development companies are the most leveraged to the respective commodity. Exploration companies live and die on discoveries. High metals prices don’t do much to increase the odds for success. Development companies have a defined asset/resource and they are in the process of moving it towards production. A rise in metals prices enhances the economic viability of the project. Many of these projects are 3-4 years from production so a significant rise in the Gold price in the next few years would obviously enhance the value of the projects and at a time when they are much closer to production. Also, these are the companies the majors are looking for and majors have the cash to pay up for.

 In this update we provide a list of 13 companies as well as a proprietary development index. We have reports on two as well as some notes on three others. More on the development companies in the near future. We will have a new updated watch list next week.

Consider a subscription to our premium newsletter. We soon will intensify coverage on our favorite exploration, producer and development companies. The cyclical bear market is nearing an end and we believe we have identified the companies poised for big rebounds (when the sector bottoms) and poised for significant gains in 2013-2014.  

Best,

Jordan

Disclaimer: Sponsor Companies are only sponsor companies of TheDailyGold.com. Do not construe sponsorship with a recomendation. We are not a registered investment advisor and information and analysis provided is for informational and educational purposes only.