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Gold/silver and miners...time to buy?

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  • Oct 11th, 2020 8:13 am
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Member
Jun 2, 2017
442 posts
156 upvotes
Some picks to watch from my view on the non-junior side. Franco being a steady royalty grower over time (Great chart too). Kirkland imo with highest risk/reward (recent pullback for possible entry point).

Less Risk/Potential: Franco Nevada
Middle Risk/Potential: Agnico Eagle, Barrick
Higher Risk/Potential: Kirkland Lake, Abitibi Royalties, Dynacor Gold Mines (all of these would be considered smaller caps, the latter two pay a dividend)
Deal Addict
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Oct 14, 2015
1155 posts
795 upvotes
Sold Newmont (NGT) today (Feb 20).

I started the position as Exeter Resources in 2011.
Exeter bought out by Goldcorp in 2017.
Goldcorp bought by Newmont in 2019.

All said & done, I made $290
and RBC Direct Investing made $40
which is why I own and will buy more RBC.

Not really worth mentioning, except that I see some youngsters with a golden gleam in their eye, and if they'll listen I tell them to go find an other playground.

NGT chart c/w miners ETF : http://schrts.co/pyQqDmTY
Deal Addict
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Oct 14, 2015
1155 posts
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@MrMom
My #1 reason for selling NGT is that I'm tired of the sector. Been messing around with PMs and miners for nineteen years with very little to show for the effort, so adding them to the 'ignore' list along with MaryJane, blockchain, and Canadian oil.

However, should CAD ever get close to $0.90 again, I will take another look to see what gold is doing.
Chart: CAD | gold:cad | silver:cad

Reminder: 2020 PDAC March 1 - 4

In case it isn't different this time, here's Lobo's article from last year.
March 4, 2019 | How to Beat the PDAC Curse
Deal Addict
Aug 17, 2008
4312 posts
3448 upvotes
@IrwinW I have some alerts set up and today they are mostly Gold. Like when the Saudi's were hit and oil popped, I think this is an opportunity to take profits. May get back in later.
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Deal Addict
Aug 17, 2008
4312 posts
3448 upvotes
Picked up some ELD.TO at $13.80.

Update: Hummed and hawed about whether I should hold on or sell, but thought (1) price action of ELD was more bullish than its peers and (2) we will start seeing warnings and hits to earnings and the global economies sooner rather than later.

Mastercard shares drop after company warns coronavirus may hit 2020 revenue
PUBLISHED MON, FEB 24 20205:47 PM EST
https://www.cnbc.com/2020/02/24/masterc ... venue.html

This is a developing story. Check back for updates.

Update #1

“Cross-border travel, and to a lesser extent cross-border e-commerce growth, is being impacted by the Coronavirus,” the company said in a statement on Monday after the bell. The company said its first-quarter revenue growth will be about two to three percentage points lower than previous guidance.

“If the impact is limited to the first quarter only, we expect that our 2020 annual year-over-year net revenue growth rate would be at the low end of the low-teens range,” the company added.

Update #2: Feb 25

Tuesday’s analyst upgrades and downgrades

"CIBC World Markets analyst Cosmos Chiu raised Eldorado Gold Corp. (EGO-N, ELD-T) to “outperformer” from “neutral” with a US$13 target, rising from US$9.75. The average on the Street is US$9.38."

https://www.theglobeandmail.com/investi ... grades-98/

Update #3 Feb 26

Goldman Sees Virus Lifting Gold to $1,800 as ‘Last Resort’ Haven By Justina Vasquez February 26, 2020, 3:43 PM EST

https://www.bloomberg.com/news/articles ... sort-haven

Financial futures maybe. Everyone else, but the bunker set and CB's, will be on lock down and unable to buy in China and India.
Jr. Member
Nov 25, 2017
109 posts
96 upvotes
Gold rose in nominal terms 1979-1980 to inflation worries and geopolitical risks.
In 2,000 not much happened since the tech bubble is just overspeculation (investor psychology).
In pre 2008 just as it is now, gold had a run up before that and sold off to 736 USD an ounce with debts being paid back via
liqiudation of hard assets. (exact situation as today)

If we assume history repeats, it would be the same scenario for gold with significant downside to pay off margin debts, loans, etc
and a meteoric rise after. The only difference this time is, CB intervention will zombify the economy to a state like Europe and
Japan rather than resuscitate it to 2009 Obama's time to buy stock event. QE infinity is also extremely bullish for nominally
priced gold, but as long as money velocity drops, it is hard for me to foresee how dollars can flow back into stocks to new
record highs unless the devaluation is super fast like 30% a month. With events being as it is, the US dollar strengthing against
other currencies was exactly predicted a week ago with 10-Y tumbling as bonds are being bought up.

In the short-term, there is a possibility of a V-shaped recovery (transient), in this case, liquidity will also bring stocks and gold prices up hand-in-hand. Evidence points to the 3:45PM billions of dollars rally at the end of the day, which coincidences with BoJ devaluation of their currency against gold. I wouldn't ever invest in miners anyways because the leverage ratio is weak, the lag time is high and not all companies have good balance sheets. It is just safer to long gold as a hard asset or small position in derivatives.

Silver is a secondary monetary metal for any financial reset set by the government and tracks industrial production. There has only been three instances in the last 100 years or so that the ratio changes preferentially to silver and the moments are extremely short. I wouldn't really bet my savings or investments on a one-time event with that low probability of occurrence. Better to just buy OTM puts on volatility-shortened funds (like in 2018) or some high-probability event trade.

That being said, 2021 calls on certain gold companies is a high-probability trade of profits.
Deal Fanatic
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Sep 8, 2007
8641 posts
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Way Out of GTA
MrMom wrote: The gold hedge isn't working out. -$242 from recent high and -$56 this morning.
However, this industry is booming. https://www.risiinfo.com/industries/tissue/
And gold stocks like tech stocks this am become a source of funds.

Bitcoin didn’t work out as a safety trade either.
"It is in times of great fear or greed that the most opportunity exists."
Deal Addict
Aug 17, 2008
4312 posts
3448 upvotes
cartfan123 wrote: And gold stocks like tech stocks this am become a source of funds.

Bitcoin didn’t work out as a safety trade either.
Too serious sir. You are missing my sarcasm in the image.
Deal Fanatic
User avatar
Sep 8, 2007
8641 posts
9410 upvotes
Way Out of GTA
MrMom wrote: Too serious sir. You are missing my sarcasm in the image.
haha, hard to know with all the serious "world is over but muh gold miners is fine" posts.... good image though...
"It is in times of great fear or greed that the most opportunity exists."
Deal Addict
Aug 17, 2008
4312 posts
3448 upvotes
IrwinW wrote: @MrMom
My #1 reason for selling NGT is that I'm tired of the sector. Been messing around with PMs and miners for nineteen years with very little to show for the effort, so adding them to the 'ignore' list along with MaryJane, blockchain, and Canadian oil.

However, should CAD ever get close to $0.90 again, I will take another look to see what gold is doing.
Chart: CAD | gold:cad | silver:cad

Reminder: 2020 PDAC March 1 - 4

In case it isn't different this time, here's Lobo's article from last year.
March 4, 2019 | How to Beat the PDAC Curse
Noticed this as I was going around some charts, https://invst.ly/qbo6n

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