NOW
IS THE TIME
by Mike Hoy
November 20, 2004
|
I think that now is a good time to write this article about a subject that has been on the table for a very long time. Old, or should I say experienced gold bugs, like me, fully understand the opportunities which are presenting themselves to the investing public at this point in time. We have waited a very long time to be in the position that we are now face to face with. I can not put into words the excitement that I have when I think of the opportunities that we are now presented with. I just read an article about a man who was complaining about how his juniors were not participating with the recent rise in gold prices. He talked about walking away, for good, as soon as he got his money back. I couldn’t help but chuckle at his frustration. Why? Because at this stage of the game he should know better. I suppose that when he walks away he is going to go back to investing in the tech stocks. I also think the possibility exists that he came to the gold stocks from the tech stock debacle. Won’t these people ever learn? I too have positions that stink. Do I complain? Are you kidding? I love it! I love the fact that some of my positions are dirt cheap. I could not be happier with the opportunity to buy huge positions at prices that are less than I could have dreamed possible. I also have positions that are punching out new highs, including my largest position. If you have read my past articles you know what stock that is. At the same point in time I can use profits from this position to build my other positions at prices that are dirt cheap. The important point to remember is that the party has not even begun, let alone come to an end. If each of you knew the potential of your companies; then seeing, good, well managed companies that are declining in price or doing nothing, while management has been successful in creating value for shareholders, should send a signal that certain stocks are dirt cheap and terribly undervalued. As investors, if you truly understood the reasons why you are investing in this industry in the first place; you should have no hesitation in knowing that the market has created a “Once in a Lifetime Opportunity” and if you do not take advantage of it then it is your own fault and you have no one to blame, but yourself, for not improving your standard of living. I believe that the precious metals markets and natural resource stocks are on the precipice of entering a whole new leg in their long term bull markets. If this thinking is correct then I will be absolutely correct in loading up on these companies at “Half Price Sale” bargain basement prices that we may never see again. Some people may cry and complain about the “cheapness” of their holdings; while investors like me are stepping up to the plate and buying everything we can get our hands on. I am going to take “No Prisoners” as I fill my positions for the next leg up. It is very important to also understand that some companies are cheap because they may have problems in the background that are beginning to surface. It is very important to know your companies and identify negatives before they surface, if at all possible. I think that gold prices are telling the world that the investment philosophies of the past twenty years are changing and could begin to change rather dramatically in the future. I believe that the hundreds of billions of dollars that lie in the hands of offshore entities are beginning to realize that this money can serve their own purposes much better than being in low interest debt obligations of the greatest debtor nation the world has, or may I say, will ever see again. Yes folks, the times, they are a changing and I am very surprised at the numbers of people, who should at this point in time, know better. Each of you who read these articles on the many websites that post good quality reading, by many good quality and experienced writers, have no excuse in not understanding the opportunities that face you right now. You should have very little doubt about the risk the future holds for the investment world and traditional investments. The only doubt that you should have should evolve around the timing of such events. I personally believe the time may be near but that is irrelevant; the important point is that the timing gets closer each and every day. The stagnant cheapness of good quality junior gold companies is telling me that they are just about all washed out of nervous and short term oriented investors selling their stocks and throwing in the towel. This is exactly what the long term knowledgeable investor wants to see and he is licking his chops at the bargains that he is accumulating. This is how the really big money is made in the markets. I am not saying that one should load up on the winners, as they are trading at new highs and do offer some timing risk in the event of a correction; but I am saying that the good quality juniors that have showed success in their work programs, who have been treated like lepers, are bargains. I view several stocks, I follow, as offering large percentage returns as soon as the public recognizes this fact; and multiple returns in a short time after that. The important point to remember is the fact that in many cases you can buy twice as many shares, at the current price, versus what a fair market price should be. This is of great importance because if these stocks rise in the multiples that I think they will over the next several years then the importance of having twice as many shares will be obvious as time unfolds. Those who have the knowledge and the guts to step forward and lead shall be very well rewarded for their efforts. As I have said, I believe we are on the edge of the second leg of what could be one of the greatest bull markets in history; to not recognize the possibility of this and take full advantage of the weakness many of these stocks are creating at this point in time; would be a mistake we would regret for the rest of our lives. We may never have a chance to participate in a bull market like the one that may be unfolding now, again. I am not going to miss it! Even if my timing is not perfect I have the knowledge of knowing that I am buying good quality stocks while they are weak rather than at their highs. Accumulating on weakness, in a bull market is how big money and big positions are made and built. The fact that I bought some of my companies at higher prices does not bother me in the least because I bought them with the intention of seeing management build the companies into cash flowing corporations or asset rich corporations. If management is successful, and they have been, in proving reserves and building their companies long term prospects, then why would someone complain about the opportunity to build positions at prices that should never have existed in the first place. Again I stress the accumulation of knowledge about both the industries and the companies you own within those industries. When you have done this then you will be able to prosper from opportunities rather than lying awake at night worrying over a short term repositioning within the stock. As I have said, I believe that the future will greatly reward those who know the most and are first to the party; me, I’m walking out the door right now on my way to that party. I plan on writing articles, which will be sent to my e-mail list, on some of these companies that I feel have been overlooked in the market. To get on the list, e-mail me at the address below. Smile! We are about to have a whole lot of fun in the near future. I’m having fun right. That “Funny Little Feeling” feels real good.
The opinions expressed above are strictly the opinions of the writer. It is up to each of you to do your own due diligence as your opinions may differ from mine. For those of you who are not on my FREE e-mail list and would like to be; just respond to the e-mail address below and I would be glad to add you to the list sharing with you stocks I own in my portfolios. For those of you with questions you can reach me at the number below. CONTACT
INFORMATION The opinions of FSU contributors do not necessarily reflect those of Financial Sense. |
