Some “Points to ponder” for the Junior Mining stocks!!!!

Key point and first order of business: Today we have “algorithm” trading which is designed to bring and create volume. But it is not real volume at all, rather it is a total misrepresentation of true investors buying stocks. That’s right, it is designed to bring in volume but not real investment volume. So traders come in just to create volume? Yes, traders are paid to transact in our opinion artificial volume-buying and selling even at the very same prices in order to embellish activity and in every sense to literally create volume which is not true investment volume. It’s volume for volume’s sake.It is devious and very damaging to the market and to the stocks themselves. Investors could eventually move away from exchanges where this is allowed. That algorithm trading is in a sense really “painting the tape” by creating a false impression. Get it straight-it is false and deceptive volume. It should be stopped now. So Stop it now!

1-Most large US and Canadian brokerage houses do not permit their brokers to recommend small cap “junior” mining stocks for their clients even when the stock may be quite undervalued. Actually, most of these vaunted investment research geniuses at the esteemed brokerage houses don’t allow their brokers to invest in most stocks at prices under $5. The theory is that they should be recommending the more conservative large cap stocks often coincidently followed by their “esteemed” research departments. You know, such as in 1999- 2000-2001 with quality big names like Nortel at $110 and Lucent at $60. Note well that the most recommended stock ten years ago by the large Wall Street brokerage houses was General Electric at over $50 a share. Today it’s $16. We can show you numerous examples like that. Is there any wonder why Wall Street has low credibility?

2-Many mining executives at the junior mining stocks as well as investors cannot comprehend that the market does not react to positive news releases. One must realize that the market is not efficient. Later, it will be noticed but it will try investors’ patience in the meantime. Some stocks will attract attention, others will not. Think of it this way: All the horses will not leave the corral at the same time.

3-Today, investors want ongoing and continuing exploration; they do not have much interest in reserves and resources that are waiting for a partner while little else is being done to expand a company’s’ resources.

4-There is very limited comprehensive brokerage research coverage for the vast majority of junior mining stocks. In most cases, there is no coverage whatsoever. But there is a huge amount of research available in private subscription services as well as in newsletters such as thebullandbear.com and on the internet ….so make use of it. It is very inexpensive and in many cases, it’s free.

5-Keep looking for companies’ drill results and compare them with other companies in the same regions. If they are not clear or you do not understand them, ask somebody. Plenty of people will be happy to help you. Feel free to telephone a company with any questions.

6-It is not perfect method, but monitor a company’s insiders (officers and directors) buys and sells. Often, this is the only available research on a company. It may seem excessive, but we get emails the very day that a reported insider sell shows up on the internet. Yes, that same day! Large purchases could be a timely buy signal, particularly when a stock is selling near its multi-year price low.

7-If a stock spikes up in price, it usually is not always a sound buy signal. It is not in a stocks best interest if it leads to excessive valuation. It may indicates that a positive event has occurred, but too often it can cause a stock to “get ahead of itself” which can lead to a harsh move down. If you see a spike, sometimes it is better to wait for a correction down in price before investing on weakness. Bottom line? Don’t chase stocks up! Wait patiently.

8-Valuing assets in the ground can be difficult. We see ounces of gold “in the ground” valued at prices from $10 an ounce at the low end to $130 at the higher end. It depends where the gold is, infrastructure in the area, depth of the deposits among many factors. But it can give you some insight into valuation levels. Valuation methods exist for copper, zinc as well as other minerals.

9-We find that if a company informs investors about what a company is doing and explains it thoroughly, experienced investors will exhibit extraordinary patience. www.MontrealAnalyst.com