Keep in mind what Napoleon once said: “Never interfere with an enemy when he is making a mistake.”  So if someone is dumping a stock that your analysis suggests is undervalued; keep quiet and accumulate.

1-Today there are many mining stocks that are literally being “given away” at current prices. They have more than adequate reserves and resources, sufficient cash and quality management. But when you find any, it is better to not discuss it with others except your favored few. Keep it to yourself or you may have a problem getting the amount of shares that you want.

 2-Today, if you look at the screen of offerings, you will often find very few offerings of many stocks at or around the price bottoms. In many small cap stocks there are very few offerings at or near bottoms. Remember that a “bottom” occurs when the last seller sells!  Most mining stocks seem to have bottomed. Since July, that bottoming has been going on.

3-With many stocks, investors often “throw them away” at low prices; this may be a superb opportunity to buy the same shares. When a frustrated shareholder dumps a stock in frustration, another investor who may have done his or her homework might think as to “what a great opportunity I have here in this stock” and buys it when it is “on sale.”

4-Gold, the formula is… Falling dollar + low interest rates +weak stock market= gold bull market

5-Generally a falling stock market is good for gold, the 20 year bull market in stocks coincided exactly with the bear market in gold. Look back at 1982 to 2002.

6-The stock market peaked the last time with the bottom in gold. 2001

7-For gold stocks “dollar cost averaging” is often the best approach since there is such little support and research from the brokerage houses and market makers today. However, that creates an opportunity to accumulate stocks frequently at lower prices than you would have been able to in the past when the trading desks and market makers (specialists) would accumulate all the cheapest shares.

8-Is it foolish to buy a stock that you bought at let’s say .30 cents after having seen it at $1.10 two years ago when it goes to .10 cents? Not at all if the fundamentals are solid. But you must do your research.  Ten cents a share may reflect no value in many stocks, but in others, ten cents may represent an exceptional buying opportunity. YOU HAVE TO DO THE RESEARCH.

9-Do we think that gold bullion and gold stocks have generally finished bottoming out? We do and if they go on another manipulated price decline, keep in mind that gold is under the cost of production for most companies, so it cannot stay at that price for long as demand for the bullion is consistent and growing. Couple that with the fact that the U.S. Government is running a deficit of $5,000,000,000 ($5 billion) per day and you can interpret as the fundamentals for hard assets are in place. Thank you and what do you think? K.C.