Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
US Overdosing on Debt - 19th Mar 19 -
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Reality Always Wins… But Never on Schedule

Stock-Markets / Investing 2015 Mar 18, 2015 - 10:25 AM GMT

By: Casey_Research

Stock-Markets

By Louis James, Chief Metals & Mining Investment Strategist

“Expect the worst and you won’t be disappointed” is true enough, but it’s a miserable way to go through life.

For investors, expecting the worst is paralyzing, a reason to do nothing.

But when a market gets beaten up the way the natural-resource sector has been over the last few years, pessimism comes to dominate the chatter in boardrooms, blogs, and cocktail parties the way mold takes over a shower. It’s a blight.


“There are no buyers left in the market; it will take years to recover.”

“There’s no financing available, so everything will grind to a halt for years to come.”

“Don’t step on that black spot.”

Recent experience in the resource sector has been so bruising that the wounded have turned to pessimism as a psychological defense, to feel wise and experienced, or at least a little less foolish. An upbeat assessment wouldn’t just risk more money, it would risk more pain.

What Is

Opinions are plentiful, so rather than offering one more, let me summarize what I know for certain: price and value are related, but they often diverge.

The essential investment formula is “Buy low, sell high.” What makes that more than a truism is that price and value often move in different directions—but not forever. Price is a wandering dog that eventually comes home to value.

Hidden in the wreckage of today’s beaten-up resource market are stocks you can buy for much less than their real value. Entire companies are trading for less than their cash. Not all those stocks are going to recover, however, since in some cases management is such a liability that the cash is likely to be wasted. But it does tell us we are at or near the best time to implement the “buy low” part of the investment formula, picking up the stocks with real value.

Critical point: Don’t wring your hands over whether the bottom of the market is behind us or in front of us.

The only thing that matters is that you buy truly undervalued stocks in companies that have assets of real value—deep value, as is fashionable to say these days—and the management strength to develop that value.

That’s the reason Casey Research is holding a timely online event titled “GOING VERTICAL”. Eight stars of the mining industry and seasoned resource investors  discuss the historic opportunity the current market offers, and the best ways to prepare your portfolio for a shot at the jackpot when the gold market rallies again. Register here to watch this free event now.

I know how difficult it is for investors to buy into an unpopular market when most of the pundits are dissing it. “What if it goes even lower?” is the big, paralyzing fear. Logical argument and economic reality—our civilization and most of the people living today simply cannot exist without natural-resource extraction—is not enough to neutralize the worries.

A Functioning Memory Is a Big Help

Fact: If you are in the right stocks, it’s possible not only to recover from a severe correction but to come out way ahead.

Below is a selection of actual stock picks from Casey International Speculator on which we made a lot of money despite severe retreats in the market and plunges in share prices. As a group, these stock rose after we recommended them, then fell an average of 69% before going on to become winners. The average gain from those lows to subsequent peaks was 795%. More downdraft than anyone wants, and more profit than most investors dream of.

Now, I’m not claiming this was our whole portfolio, nor that we sold any of these stocks at the top. What I am saying is that we made excellent returns on all of these stocks even though every one of them spit in our face after we bought it, selling off substantially—and then came back with gusto. One fell 90% and then soared 1,200%.

Key takeaway: Stocks in good companies will recover from even the most serious bear mauling.

What’s Coming

Whether it has already happened or is yet to come, three signs tell me the bottom in junior gold stocks is not far off.

  • Investors don’t want to hear about junior gold stocks. Most readers who started this article didn’t even read this far.
  • When gold broke through its previous low last November, most pundits announced it would drop to $1,000 or go even lower. It rebounded instead.
  • While the sector continues to languish, stocks of the best junior companies have risen dramatically and largely have held on to those gains.

All good signs, yes. But I’d feel better if you didn’t bet on the timing. For a sure thing, bet on the value you can buy on the cheap now.

Click here to watch Franco-Nevada’s Pierre Lassonde… Casey Research Chairman Doug Casey… Pretium’s Bob Quartermain… Sprott US Holdings chairman Rick Rule… Aben Resources’ Ron Netolitzky… U.S. Global Investors CEO Frank Holmes… and Casey Research metals experts Jeff Clark and Louis James in GOING VERTICAL.

The article Reality Always Wins… But Never on Schedule was originally published at caseyresearch.com.
Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules