Prepare for the Meltup

Clive Maund editorials ^ | January 1, 2003 | Clive Maund

[Cicero]

I cited Clive Maund's "Top of the Pops" (December 4) above. But let me just reproduce his first table here:

[snowstorm12]

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[Semaphore Heathcliffe]

thanks. that's a nice reference. If this thing really gets moving, throwing darts at the chart blind will net you a winner.

[Black Powder]

I also think gold is still cheap, but if it goes down, the miners will really suffer.

Especially since so many miners have been scrambling to unhedge their books.

[Cicero]

That's my opinion. It's always better to spread your buys around a bit, because any one company can have problems, and different companies may make their moves at somewhat different times.

I would just avoid getting carried away. I have put small amounts in a few junior companies, but I wouldn't put everything into one of them. Still, on the whole it does look like a once-in-twenty-years opportunity. The Fed has been playing games for decades, and has generally gotten away with it, but it may be that Robert Rubin went too far and now things are starting to pop.

[Semaphore Heathcliffe]

I've been riding this thing for a year now, trying-trying-trying to get relatives and close friends to jump on while it's still a minor business news story. No takers. Everyone is content to watch their freaking net worth grind southward, "because my financial advisor says he's seen this before and the market will come back soon."

[Cicero]

Well, in that case you got in at the bottom. But prices of most stocks are still very reasonable, and I think a year or two from now they will look very reasonable indeed.

If the world comes to an end, then you may want to own gold bars or coins buried in your back yard. But short of that, gold stocks are the sensible way to go--or options, if you know how to play risky games. If you use a good discount broker like Charles Schwab, stocks are much more liquid than physical gold, easier to get in and out of at small commissions.

[bimbo]

Just IMHO: Harmony Gold, Golden Star Resources, Caledonia Mining, Durban Roodepoort Deep, Randgold, Samex, Glamis, among others.

Check out Ashanti - an African mine without the South African political risk - impeccably straightforward management.
Also check out Kinross - agressively acquiring valuable juniors.

[bimbo]

But the real cause is weakness in the dollar and other fiat currencies ...

Absolutely! The Central Banks have been selling their gold in recent years for $320 - $250. They'll be re-acquiring that gold for $2000.

[Semaphore Heathcliffe]

actually, I missed the whole first leg up. I believe it started in early 2001. those guys were getting in for pennies on the dollar. literally. Those that had the foresight, cash, and guts have already made their money back many times over. Gold's looking strong tonight.

[Semaphore Heathcliffe]

I'd like to add that it doesn't matter whether I've been riding this thing or not. My comment was made in poor taste. Apologies.

[jwh_Denver]

Yeah, I understand the technical aspect but the trend lines are on phony manipulated points.

They may be but they are important to you whether you believe them or not. A great many traders watch for a breakout of an upward trend line and jump in when it does. More demand means higher prices. These people aren't interested in buying low and selling higher. They buy high and sell higher.

[jwh_Denver]

Everyone is content to watch their freaking net worth grind southward, "because my financial advisor says he's seen this before and the market will come back soon."

There is a good flip side to this. When all the financial advisors start telling their clients to buy we will have a signal to seriously considering selling part of our holdings. As one poster on Gold-Eagle said "I'll know when to sell when CNBC says to buy!" Haha!

[tubebender]

CDE is the only stock I own now except for a couple of insurance stocks that were issued to me when they switched from mutual to stockholder companies. The problem with CDE is 70% of it's production is silver. It is up nicely in the last 10 days.

BTW...those inssurance stocks are paying nice dividends

[imawit]

Hey JW. Haven't chatted for a while. I've been catching you now and then but didn't have anything to add.

I was adding the point to the discussion that there is a distinct possibility that there will be no consolidation or if there is one it may be many many months down the road. A stampede doesn't wait for anything or anybody. Not saying there will be one but the price is so far into a false hole it may look like a stampede just to get to where it should be, not to mention the shorts possibly bailing..

[Soren]

Some say silver is a better buy than gold. The real problem with CDE is its balance sheet - a lot of debt.

[Semaphore Heathcliffe]

hey now, not too soon! When CNBC starts getting on the band wagon, that's when mega bucks will start chasing these precious few shares. "Express elevator" time.

what, me greedy?

[Cicero]

I have some CDE. I was interested in a recommendation of MMNM which I just saw a couple of days ago, but the price doubled in the past few weeks, before I became aware of it. I hesitate to buy with the chart looking as it does, unless it corrects, because it seems to be thinly traded in the U.S. and it would be easy to get burned.

If the price of silver skyrockets, then the best stocks will be the more speculative ones, with heavy debt and high-price mines. Of course if it tanks, they will be in greatest trouble.

So far, we have had just one single-day bounce in silver last Friday. The heavy resistance at 5 and 5.50 has yet to be tested or broken, unlike gold. That could mean that it's a better opportunity, because it's still time to get in on the ground floor; or it could mean that it is still detached from gold in its actions.

[Soren]

I own some CDE too. It seems like silver's breakout has been just around the corner for more than a year. I remember last year about this time people were calling for a breakout by March. The leverage is nice as long as they stay in the game until pay day. I prefer SSRI for silver. I heard about MNMM recently, but looked at the chart and decided to pass for now, not to mention the fact that I am already pretty fully loaded up on PM stocks. Seems like you have done your homework.

[DoctorMichael]

Bump for later reading.