Thursday, 12 January 2012

Why Junior Gold Miners in 2012

I have invested in gold junior miners since the beginnings of the Global Financial Crisis in 2007.
I have done well but not sold enough at the tops when everyone got over-excited.

By nature I think I'm a buy & hold investor but going forwards I want to recognise that greed and fear much better.

Gold juniors are too easy to fall in love with, believe the story, the hope etc.
Equally it is far too easy to sell too soon when a big discovery is being made and the 10, 20, 100 baggers we all hope for really are there.

As Bob Hoye says "you have to trade them" after it's been "party time in the juniors".

The gold juniors are not "safe" investments, they are wildly volatile, but ultimately I do believe that a big bull market in gold will culminate in a mania where we will see enormous gains for gold, silver AND "gold in the ground".

So unless the end of 2010 peak in my gold exploration portfolio anticipated the silver peak of April 2011 and the gold peak of September 2011 I think there is more to come - Alf Fields' wave 3 of 3 to $4500 gold must surely this time drive the mining stocks much higher.

The deep crash of 2008 has us afraid that the same will happen again but is this the wall of worry we climb....?

A sensible approach would buy the seniors then rotate down through the juniors.
But once the juniors start to run it is so hard to buy something that has jumped 50%.
Positioning now is genuinely cheap.

Look at the market caps on the stock lists for the TSX / TSXv.

Which companies will make discoveries, be acquired, drive expectations and multiply our wealth?

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