Now Is The Time To Get Into Gold Stocks

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

It has been roughly three years since I’ve written, excitedly, about precious metals stocks (which has turned out to be quite prescient).

I’ve never emphatically said to sell, though, either… which is regretful but the TDV portfolio is not a short term trading letter and we will always have a percentage of our portfolio in this sector, through thick and thin, until The End Of The Monetary System As We Know It (TEOTMSAWKI) nears its final conclusion.

But aside from talking about expatriation, offshore banking and corporations, second passports and commenting on how badly the Western world is devolving into a fasco-communist police state I have really only talked about a few specific “investment” areas for the last few years.

As you know, I’ve talked emphatically about bitcoin (and our long awaited bitcoin manual – free to subscribers – will be out very soon) since 2011 (when it was just $7) and the collapsing drug war (which I see as a symptom of TEOTMSAWKI and a worldwide awakening) has gotten me extremely excited about medical marijuana (MMJ) stocks (of which we will now be focusing on more specifically at TDV Golden Trader).

And, of course, I’ve never once talked negatively about owning precious metals bullion as an important safety hedge (but always admonish you to make sure you geopolitically diversify as much as possible – as we have written about at Getting Your Gold Out Of Dodge). But I’ve nary said a peep about precious metals stocks in years.

The reason? Bluntly, there just hasn’t been much to be excited about in this market in the last three years. Bre-X could be wrought from the ashes and say they just found 200 million ounces of gold in Indonesia again and the market would have sold it down from $0.10 to $0.06.

In fact, in my 24 years of following the precious metals stock sector I have never, ever seen it as bad as it has been the last few years. With the exception of the Vancouver mining show in January which I go to each year as a tradition I haven’t even attended a mining conference in years. The last time I attended one it was like walking into a funeral… of someone that no one liked! There was hardly anyone there and those who were there, with the exception of people like the incredibly smart billionaire anarcho-capitalist, Rick Rule (who loves a good bear market almost as much as he loves a good bull market), looked like their mother just died at the hands of their dog who then got shot by the police. In fact, just yesterday, one of the biggest gold mining conferences, the Hard Assets Investment Conferences just announced that they will not be doing any more shows!

But lately there has been a subtle change. Not a major sea change… more like a small ripple rocking your sailboat after weeks of doldrums in stagnant, motionless water out in the Pacific. Like you almost forgot what the wind or a wave felt like.

A SLIGHT BUT NOTICABLE CHANGE

Hardly anyone noticed, but that sly fascist George Soros was reported to have sold banks and been buying gold stocks in the first quarter of this year.

Russia has smartly been selling off nearly all their Treasury Bills of Confiscation and has been buying gold at an unprecedented rate, purchasing 900,000 ounces ($1.17 billion) in April.

We’ve seen two of the stocks in our TDV Premium portfolio bought out in the last few months. B2Gold (T.BTO) quietly bought out Papillon Resources in June and in April Goldcorp (NYSE:GG) and Agnico Eagle (NYSE:AEM) had a bidding war to buy out Osisko Mining.

And one stock I had been following due to my connections to some of its shareholders, Euromax Resources (V.EOX), which had been clanging about between $0.09 and $0.30 for the last year spiked from $0.14 to $0.75 in one day on the release of a broadly expected pre-feasibility report just a few weeks ago.

So, after years of a terrible bear market in the gold stocks nearly everyone has given up now. I get the sense there is no one left who wants to sell on many stocks. The Hard Assets conference shuttering its business yesterday may ultimately ring the final bell for the lack of interest in this market. But, as stated just above, something appears to be afoot… quietly… a small ripple has begun.

Buyouts, takeovers and dramatic price rises on news are happening in this space for the first time in years… and hardly anyone has noticed.

GOLD AND GOLD STOCKS VERSUS THE STOCK MARKET

A quick look at the charts showed that gold bullion itself hasn’t been this low versus stocks since November, 2008.

When you look at the major gold stocks versus the S&P the picture is even uglier.

And, well, when you look at the junior gold mining stocks versus the S&P over the last three years… avert your eyes!

It doesn’t get much uglier than that.

But, as I stated above, I sense something is afoot. And I tend to have a knack for spotting shifts like this.

Certainly in risk terms I have never seen less price risk in this gold mining market than today… and that includes the depths during 2008/2009 which seemed apocalyptic. That, combined with some stocks now doubling, tripling or much more on little major news is telling me that it is time to get back in this market.

I am not expecting a massive bull to come out of nowhere in the next few weeks or even months but it is times like these before anyone else even notices the turnaround that the big money can be made. There will be doubles, triples and more before the general investing public even begins to notice and start to pile in.

For this reason, TDV Senior Analyst, Ed Bugos, and myself, will be on the prowl more than ever looking for dramatically underpriced high quality deals.

PRIVATE PLACEMENTS

The best way to truly hit a home run if I am right is to invest in private placements of select companies which offer warrants.

As one example of how I have done this before, on June 2, 2009, at the very depths of the last ultra-bear market in the junior gold miners I grit my teeth and invested $10,000 into a private placement of Copper Fox Metals (V.CUU) at a price of $0.05 with an option to buy another share (warrant) for $0.07.

Less than two years later it hit $2.80 per share.

If I had sold at the top (which no one ever does, but if) I would have sold my original shares for $560,000 and profited an extra $400,000 on the warrants… or over $1 million from a $10,000 investment.

If you think that was good, however, I remember a friend of a friend buying $5,000,000 of that private placement! Ernesto Echavarria a businessman based in Sinaloa, Mexico could have, if he sold at the top, made a profit of nearly half a billion dollars! It since, of course, has dropped significantly in this bear market.

The point being, however, is that it is times like now that absolute fortunes can be made by investing in private placements of these companies with warrants which essentially doubles your profit potential with zero extra risk.

CONCLUSION

After a three year hiatus I will actively, but surgically, with the great help of Ed Bugos, again be positioning myself into junior gold stocks… and preferably private placements in them over the coming months as well as offering TDV Premium subscribers access to the deals that Ed uncovers.

In fact, today, for the first time in TDV’s history we have negotiated an exclusive private placement with a gold mining company that Ed believes has 10-bagger+ potential in the next year and TDV Premium subscribers (you can subscribe here for only $25/month – Basic subscribers can email [email protected] to upgrade) will be the only ones with access to it. Of course, for those who are not deemed “accredited investors” by the people who own you (the government) you can also just buy in the market.

And we will be doing many more over the coming months.

And so, after many years away from this market I am publicly throwing my hat in the ring and putting my money where my mouth is and am coming back into the gold/silver stocks sector.

I’ve focused more on Bitcoin and Bud (marijuana stocks)… two pillars of my five “Killer B’s” for the last while but I am now positioning myself and our subscribers in one of the other key B’s, Bullion…. and more specifically, the precious metals stocks.

So, you’ll be seeing me back talking about this sector and attending the few mining conferences that are still left standing. I just accepted an invitation to Keynote at the Silver Summit in Spokane this October… between the bitcoin conferences, medical marijuana conferences and liberty events I regularly attend it means I’m going to be busy.

But, TEOTMSAWKI only comes around so often and never before like this so I will keep pounding the pavement and working to create wealth and salvage what we have now… I’ll take a rest when the dollar and the Federal Reserve are good and dead.

Questions or comments? Join us at The Dollar Vigilante.