Point one…Our analysis has indicated that we have been in a positive market (bull market) for gold and some gold stocks since 2015. But it depends on which ones! Some have already moved sharply up but a major move up will come later with more stocks participating as the gold bullion price rises above $1500 and perhaps much more…..and soon….perhaps very soon.
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Point two…Investors ask why some gold and junior stocks have dropped to prices far below what they previously dropped to during bear markets.
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Why? Because there are no longer the same number of “market makers” who will bid (which brings support and can lessen declines) when stocks are being sold. So the gold sector stock prices drop to even lower prices than they did in the past.
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As there are such small spreads between the “bids and asks,” profitability from market making has dropped and risks of large losses have increased. Without profitability, there is little reason to hire research coverage.
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Point three…We expect that interest in the smaller gold and exploration companies such as the “juniors” will increase exponentially as the price of gold bullion rises. We have already seen some large moves up and “takeovers” in the prices of gold stocks that do have ongoing or near gold production.
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Point four…comprehensive research coverage for a company that is more than a standard overview is rare as the cost of hiring analysis for in-depth research coverage can be too expensive for a brokerage house. So investors have to look for private investment services and newsletters types which are generally far better than the brokerage house research-far better.
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***Point five…Keep in mind that the most successful investors in gold, silver and exploration stocks are historically the officers and managements who work at the companies and see first-hand what is happening. In the last several years, in general, the managements (insiders) have been consistent and large buyers of their very own companies shares. At the same time, the officers and directors of the industrial stocks such as the S&P 500 companies have been selling in some cases at record levels.