Thoughts on Miners: What to buy?
Just wanted to do a short post on what I am currently thinking about and looking at…
Lets start with some observations:
- Large caps have done well
- Some select and well known gold juniors have done well
- Silver juniors have been rocketing
- Silver price has rebounded heavily but still has a long way to go based on the gold/silver ratio
- Many gold juniors are lagging
Personal thoughts:
- I prefer silver over gold
- I don’t think the silver juniors are as cheap as the gold juniors on average in relation to where each metal is trading
Personal opportunity ranking (R/R):
- (Lagging) gold juniors
- Physical silver
- Silver juniors
- Physical gold
Comments:
If one wants to chase the highest potential pay off then silver juniors are probably the weapon of choice. With that said, I don’t see many silver juniors as significantly undervalued relative to the current silver price. I am personally concentrating on the many gold juniors that haven’t participated in the semi-sector wide revaluation rally. With so many advanced gold explorers/developers lagging, I am also not to keen on chasing pure exploration plays ATM, for the simple reason that I think “banked success” is still undervalued.
Given that large caps, well known/hyped juniors and silver juniors have been performing so well it leads me to believe that we are still in an environment where broad scale capital inflow has yet to materialized. It seems that it’s institutions (GDX), a handful of stock pickers (well known juniors) and the least risk reverse investors (silver juniors) who are currently making their moves.
Silver is under valued and hence select exploration and development companies may
be expected to produce superior returns,for example Silver One Resources and Discovery Mining Corp.Eric Sprott has taken sizable positions in both.Novo Resources,Kirkland Lake and Seabridge Gold are my picks in the gold space.I learned that Eric Sprott has substantial holdings thru KL in Novo,which I have held
for several years and expect to produce the highest ROI.He,if I am not mistaken,
also holds shares in SA.
Your research is valuable and I want to thank you for your excellent work.