Time to Take More Risk
Gold is ready to break out to all-time highs, and the market is not only rewarding success with the drill bit, it’s starting to reward potential success with the drill bit.
In some cases, the market is rewarding newer companies looking for world-class assets with market caps many multiples over companies that already have world-class assets. That presents an opportunity.
Gold closed the second quarter on a high note and now looks primed to take out all-time highs in U.S. dollars.
Which means both the newer companies with bloated market caps and the companies with economic and robust assets that have yet to outperform will do very well. But it’s stock-picking time if we’re going to maximize gains in this cycle.
Last week I told you it was time to take more risk. This week I’m telling you it’s time to take more risk by shifting a little capital from multi-baggers to laggards.
What to sell and what to buy? That’s a matter best addressed in Junior Mining Monthly and Junior Mining Trader.
Which brings me to my next point. If you’re reading this it’s because you’re interested in the space and making a few dollars from the metals space.
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As for the higher risk, higher reward exploration stocks that have been neglected, battered, bruised, and left for dead? Well, many of those will lead the gains in this cycle, and while Mr. Hodge has a healthy dose of those in his services it’s what I do exclusively.
The explorers looking for the next discovery, those that are already on to one but the market hasn’t yet realized it, the companies that are on the verge of a drastic re-rating yet sit flat because the market has a limited attention span; these are the companies that will lead the next surge higher.
Several are already up over 100%. I wrote a check for a company a week ago and that has nearly tripled (damn right I eat my own cooking) yet is still down over 40% from the original buy price.
That won’t last long. It’s going much higher. By the time everyone realizes it, that company will be in future promotions about how I made four-digit-plus gains in less than a year.
It’s a cyclical space. The same cycle that cuts a company’s market cap by 70% rewards patience and diligence with 1,000%+ gains when the cycle kicks back up.
Another company I wrote a check for less than a year ago is up some 15-fold and it’s just getting going.
I’m not saying this to boast, I’m saying it to highlight the opportunities that exist in the junior space right now.
As a mentor of mine likes to say, “In a bull market a 12-year old can throw darts at a company name, and 7 out of 10 times that name will do as well as what any of the so-called experts pick.”
He’s right. It’s the way this business works. We’re not at that part of the cycle yet but the cycle is our friend again and will be for years.
To your wealth,
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.
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