… as long as you are aware that in the short to medium term the price still may go down some more, maybe even substantially so. Long-term the narrative for me hasn’t changed, so I am not inclined to sell anything at the moment.
One other thing … we always talk about “gold is worth such and such amount of dollars”, or “gold went up/ down”. This is the wrong way around. Gold is gold, and silver is silver. What goes up or down (mostly down), is the purchasing power of the currency. If for instance you look at the ratio between the S&P 500 (SPY) and gold (XAUUSD), you will see that the curve is mostly flat, while in nominal terms the SPY has gone substantially higher (in fact to record highs). This means that this massive increase in the SPY is only due to devaluation of the currency, strictly there were no gains. You were just compensating for the loss of purchasing power - as opposed to around 2000 where the SPY was truly outperforming PMs:
View attachment 115692
What that means is that PMs are mostly a wealth-preservation vehicle, not something “to make money” (except in certain circumstances, as maybe now, with leveraged position and not with physical gold/ silver).
The mining sector is a very difficult environment for any investor, and you need a ton of knowledge about geology, PM markets, production risk, geographical risk etc. You can’t just go online and pick some stocks. You need the guidance of someone who knows the space intimately. There are analysts in the space who are dependable and have been in this game for decades (Rick Rule, Brian Lundin, Jeff Clark) - but their newsletters are not free.
Generally it can be said that miners usually outperform the metal in a bull market, but they are high-risk. You also need to invest in a basket of these, as you will perforce have some that will go bellyup - from every 10 mining companies that I am invested in, 2 are down 90% (worthless), 2 are 25-50% down, and the rest is up between 10 and 500%. This is a typical picture of a mining portfolio - if you did your homework well.
And it needs to be repeated that you only want to invest small amounts into each company.
Aside from that, a better alternative might be to invest into a mining ETF - like GDX (majors) or GDXJ (juniors) for gold, and SIL/ SILJ for silver.
And again, this is not an investment advice, especially now that we are in uncharted territory - given that what we experienced is a 10-sigma event which statistically should only happen once in around 180’000 trillion years, unless it is artificially produced (which everything in the market is). And everyone’s situation is different.
Anything could happen from here on forwards!
no01.substack.com
www.zerohedge.com
en.wikipedia.org
