How High Can Gold and Silver Stocks Go?

Hang On!!

by Dudley Baker, PreciousMetalsWarrants.com | August 6, 2009

In December 2003 Edward Gofsky wrote a great article titled,

“The 21st Century Gold Rush: How High Can Gold and Silver Stocks Go? Higher Than You Might Think!!”

Being a bull on the precious metals I thought then what a great article. I have recently been in touch with Edward and he has given me permission to use his article in this piece.

What he did was visit the local library looking at old newspapers from the 1970’s for the price of gold and silver stocks and then comparing them to their ultimate peak in share price in 1980. Now it is probably a surprise to no one that gold and silver stocks were on fire as gold and silver peaked in January 1980 but some specific examples that Edward shares with us are just awesome and mind blowing, begging the question can ‘they’ do it again? But to put it in Edwards’s words:

“In the last few months I have started out on a unique quest…to go back in time to the 1970’s and to see what happened to gold and silver stocks when gold hit $500 then $600 then $700 all they way to the $850+ price and $50 silver….”

“…I started my research by going to my local library to look at old newspapers from the 1970’s, and wow did I find some amazing things!! My library had the financial post newspapers on microfilm all the way back to 1972 the very beginning of the last gold and silver bull market. I quickly went to work spending hours poring over the old papers looking for articles and stories on gold and silver to see if there were any similarities between now and the 1970’s….”

“…There were a few articles about gold from 1972 to 1975 but the real big stories didn’t really get published until around 1978-79 and especially in January of 1980 the final blow off top in both gold and silver. What I really wanted to uncover from the old financial papers were old stock tables so I could see how high most gold and silver stocks got to in January of 1980 and from what level a few years earlier….”

“…What I found was absolutely shocking. In 1975 most or all of the gold and silver stocks were trading under $2 most were penny stocks under $0.50….”

Sound familiar? Today most of the junior mining shares are selling for pennies. Are we set up once again for a mania phase in resource shares?

Edward shares with us some examples of his findings, i.e., "Lion Mines – 1975 price $.07 / 1980 price $380 YES that’s right it’s not a misprint you could of bought 1000 shares of lion mines in 1975 for around $50 dollars at 7 cents per share and held on for 5 years riding the wild gold and silver bull until 1980 where you then sold those same shares for $380 each for a total profit of around $380,000. Not bad hey!!!!! This is only one of many more examples."

“…in January 1980 most gold and silver stocks were trading over $50 per share and lots were trading over $100 - $200 some even as high as $500 per share when only a few years earlier you could have bought the same stocks quietly for under 1 dollar.”

While these numbers are staggering, can you imagine if there had been call options,
LEAPS or long-term warrants available on these mining shares?

We now make available a FREE Warrant Database for visitors to our website,
www.PreciousMetalsWarrants.com. This basic database includes all warrants trading on the natural resource shares with complete details and terms of each warrant. For subscribers, we also furnish a table of all options and LEAPS available on the sector.

Thru the years as I go back and re-visit Edward’s article, I get goose bumps to think we may see this manic one more time. Could we? If so, when?

Well, personally I follow many different analysts and newsletter writers to assist me and my subscribers at PreciousMetalsWarrants in navigating the overall trend of the markets and I must confess I am convinced that the next monster mania phase is coming and coming very soon. We see a peak in gold as early as January 2011 and as late as February 2012. Can you be patient and wait that long?

I encourage each of you to read Edward Gofsky’s complete article on his website. You will never forget this read and your timing could never be better than today.

We appreciate Edward allowing us to share his original article and may make refer to it in some of our future articles.

Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies’ websites, links to quotes and charts, tips for placing orders and much, much more. We do not make any specific recommendations in our service. We do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders.

Disclaimer/Disclosure Statement: PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

contact information

Dudley Baker | Ajijic/Guadalajara, Mexico | Email | Website

The opinions of FSU contributors do not necessarily reflect those of Financial Sense.