Posted on July 30, 2021 | By KCGrainger

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Yes, it has been frustrating but there have been many superb returns in some of our picks during the last eight years. We have had opportunities to buy many precious metals and exploration type stocks at bargain prices.

Napoleon Bonaparte once advised “to never interfere with an enemy when he is making a mistake.” In investing, we try to take the same approach. If a shareholder of a stock is selling his/her shares that your research finds is considerably undervalued, keep it to yourself. You do not want competition when you are buying or selling as we are dealing with a very illiquid market.

Three years ago a luncheon meeting in Montreal, an investor told me that he finds shares in small cap (juniors)mining stocks only perform well for about 8% of the time. It depend, but it is during price weakness that we find that it is the most profitable opportunities to invest in many companies’ shares.

Money Supply growth and Central Bank buying of gold has carried the gold bullion and many precious metals stocks up dramatically. Examine charts of the money supply growth and you’ll note that paper money has been exploding upward.

Many investors cannot understand the lack of interest in the juniors. The fact is that at most Canadian and U.S. brokerages and banks, the sales people are not permitted to solicit orders for stocks selling at under $5 a share. They are permitted to only recommend stocks that are followed by their own firms’ research departments. That is despite the fact that various stocks are trading far below their asset value per share and at times for under their cash per share and represent exceptional value.

Is there a scarcity in Gold bullion? Yes! Recall that about six years ago when Germany asked for their gold bullion held in “safekeeping “ in New York, it took five years to finally get their gold…….it obviously was not there! It had been “lent out“ in ”gold loans‘’ and Gold’s true owners such as Germany could not get their gold in a proper fashion. We do not believe that the Germans (and the Dutch as well) were made aware that their very own bullion had been hypothecated (lent out) without their knowledge or permission. The Fed and other institutions had to scramble to control the situation. If a failure to deliver panic occurred, Gold would have been near $2500 within days. That is why we advise any bank or institution that has its gold bullion held in “safekeeping” to demand its delivery…. Now! If they wait, things could happen that could permanently delay legitimate delivery.

We monitor the buys and sells of the officers of the gold, precious metals and mining companies. Those “Insiders” are among the most informed of all investors-they work at those companies! In small cap juniors, it can indicate exceptional undervaluation and extraordinary profit potential.

For example, the CEO of Osisko Metals “OM” in twenty individual purchases bought over 700,000 shares of OM during the month of July. That is what want to see.

Next week we will discuss topics…value in juniors, research must be clear and understandable,  retrictions on brokers buying? no uptick required for shorting is improper and deceitful , gold must stay up above…we will get into that ….later