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In this update...
- Links of the Week
- Company News
- Premium Charts
Links of the Week...
Junior Mining Stocks Have Bottomed
We are going on record publicly saying that the bottom is in for CDNX & GDXJ. This means for all juniors. HUI, GDX, XAU and the seniors have probably bottomed too, though we feel much more strongly about the juniors.
My Interview with Palisade Radio
I talk about my bottom call.
Rick Rule Explains Optionality in Gold Stocks
We frequently hear this claim but it is total nonsense when we consider equity ownership from households (which is historically quite high) as well as valuations and sentiment.
Long-Term TBonds: Taper This
Good short piece from Gary T on bonds. Bonds have held major support (so it appears). Bonds have been trending higher with PMs.
Company News...
First Majestic Reaches Senior Producer Status Projects 12.7-13.35M oz Ag in 2014
FM is one of the only companies to go from junior to senior status. An amazing feat and the company is not done growing. The company is targeting nearly 100% Silver production growth from 2013 to 2017.
Argonaut Gold Produces 120K oz Au in 2013
Production came in at the lower end of the company's guidance. Its guiding for 135-150K oz Au in 2014.
Corvus Gold Drills 4.9 g/t Au & 30 g/t Ag over 42 m
Corvus is killing it. The stock has broken out from a recent consolidation. Its definitely one of the strongest stocks out there and for good reason.
Premium Charts:
Here are some charts we've included in recent updates as well as our recent presentation in Vancouver. This is further evidence of a major bottom in the stocks.
Book value in gold stocks recently went below 1. The price to book ratio is at a 32-year low and that is the extension of this chart and data. Perhaps the ratio is at a 40 or 50-year low? We don't know but if the price to book wasn't at an all time low in 1976 then it may well have been in 2013.
I'm not a fan of using XAU/Gold or HUI/Gold to rationalize a buy signal. Over time the stocks will underperform the metal. That is what happened in the 1960-1980 bull and again in this bull. However, when gold stocks vs. gold hits a 70-year low you have to take notice.
This is the 2000-2001 bottom. Note that the gold stocks bottomed in November and Gold double bottomed in February and April. When Gold plunged 8% from December to the February low, the HUI went from 43 to 46.
Keep in mind, CDNX, GDXJ, GLDX, SIL and Silver peaked in April 2011 while Gold peaked four months later. The seniors (GDX, HUI) started peaking in December 2010 and didn't officially peak until September 2011. Thus, it makes sense that most stocks and the juniors especially would bottom before Gold. That scenario happened in the 2000-2001 bottom and it could happen again.
We cut our short positions in late December when it appeared the market wasn't going to make that final plunge. In the past few weeks we've ramped up long exposure to PM equities and have been rewarded, initially at least.
From 2010 to Tuesday, Gold is up 10.6% while Silver is up 13.3%. GDX is down 50.1% and GDXJ is down 59.6%. Yet, the model portfolio is up 78.6% in that period. We don't always get everything right but I'm confident that over time we will continue to crush the sector-benchmarks. Rick Rule, Jim Rogers and others say if you pick the right commodity stocks then you can make a fortune in this bull market. That is the goal of my service: find the leading and best
performing companies within the precious metals sector.
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Thanks for reading. I wish you all great health and prosperity in 2014.
-Jordan
Disclaimer: Sponsor Companies are paid sponsor companies of TheDailyGold.com website and this free newsletter. Do not construe sponsorship with a recommendation. The author of this newsletter is not a registered investment advisor. This newsletter is intended for informational and educational purposes only and should not be considered personalized and individualized investment
advice. Investment in the precious metals sector contains significant risks. You should consult with an investment advisor and due your own due diligence. This email may contain certain forward looking statements which are subject to risks, uncertainties and a multitude of factors that can cause results and outcomes to differ materially from those discussed herein.
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