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XMFSinchiruna (27.52)

7 Secrets to Profitable Gold Investing

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July 14, 2011 – Comments (11)

After the recent period of relative weakness, I bet this week is effectively recharging your collective conviction that gold and silver are truly the optimal asset class for this period in financial history ... and aren't you relieved you had the foresight to get into position BEFORE $2,000 gold rather than after when the assets begin to go mainstream?

I know I am.

After raising a 20% cash position into gold and silver's last peak, and redeploying all of of those funds strategically over the course of that pause, I will now enjoy substantially greater leverage to additional upside than I would have without the correction. That is why while others seem disappointed when gold and silver shed momentum, I stay busy tweaking my holdings to harness the volatility, and I welcome the opportunity to do so.

It's hard to say whether we'll encounter some resistence at $1,600, but if we don't, we may likely see some retrenchment at $1,650. Of course, if the crooks in DC rob us of our already undeserved credit rating, or even just bring us incrementally closer to the brink of default, all bets are off for near-term gold resistence, and we could fly higher in a heartbeat. I may begin to target my normal 10% cash poisition as we advance toward $1,650 in case we then bounce back toward $1,580 or so before launching through $1,650, but again I will take my cues from developments in the key economic crises of the day.

Remember this moment, Fools. Remember the time when so many of you took that clown Bernanke at his word when he told you QE2 would be the extent of it. So much unnecessary anxiety among investors about the specter of an economy with waning monetary stimulus ... all while the real truth about our fictional recovery and the unabated threat of monumental deleveraging makes an ongoing continuum of quantiitative easing the obvious order of the day. We will have QE3, and QE4, and however many more they can squeeze in before main event: the wholesale resumption of deleveraging in derivatives. Bernanke is so scared of our overall financial condition right now, he couldn't even wait to see what our markets / economy might look like without further easing; he whispered QE3 even earlier than II thought he might. It's no longer a question of "let's see how the markets respond" with just the leveled-off QE2. Now, even that near-term scenario is one they are unwilling to risk, and the debt showdown serves only to raise those stakes by daring Treasury holders to run for the hills. The ocean has been whipped into furor, and rogue waves could strike at any moment. We do not know when, nor from which direction, but of this we can be certain: we will not stay dry.

I hope I am wrong about all of it, but I do not think that I am. I hope that our great nation may be spared from poverty, but I can no longer identify a scenario where that condition is avoided. I believe protection in gold and silver is the best we can do. I never thought a chunk of my life would be steered in this direction, but given my outlook, all I could think to do was to help some people consider precious metals to lessen the blow, and that is the sole reason why I shifted my path to spend some time here writing for you Fools. As an applied anthropologist, I view capacity building as a key ingredient to any worthwhile community endeavour, and so I aim not just to forecast long-term gold and silver price dynamics and recommend quality vehicles for investment exposure, but for me the true measure of success will be if I helped to make some of you more adept at interpreting those price dynamics yourselves, and particularly if I have helped to hone your capacity to identify the best investment vehicles. With that in mind, I offer the following 3-Part series: 7 Secrets to Profitable Gold Investing.

7 Secrets to Profitable Gold Investing, Part 1

http://www.fool.com/investing/general/2011/07/11/7-secrets-to-profitable-gold-investing-part-1.aspx

"In this first installment of seven secrets to profitable gold investing, we've scanned the globe for some of the most prospective golden real estate that coincides with a friendly geopolitical and regulatory setting, and outlined some key aspects of mineral geology.

7 Secrets to Profitable Gold Investing, Part 2

http://www.fool.com/investing/general/2011/07/12/7-secrets-to-profitable-gold-investing-part-2.aspx 

"After clicking here to review Part 1 of this series, join us below as we learn how to decode economic studies of proposed gold mines and assess the likelihood of successful mine permitting."

7 Secrets to Profitable Gold Investing, Part 3

http://www.fool.com/investing/general/2011/07/13/7-secrets-to-profitable-gold-investing-part-3.aspx

"After reviewing both Part 1 and Part 2 of this series, please join us below as we learn how to gauge a miner's all-important potential to expand resources through ongoing exploration, assess the strategic health of a miner's development pipeline, and pinpoint management teams that possess the golden touch."

I hope you find the series useful, and I wish you all the very best of luck at protecting your investment capital from what I believe will be some difficult times ahead.

11 Comments – Post Your Own

#1) On July 14, 2011 at 10:42 AM, Frankydontfailme (28.06) wrote:

+1 

True words are hard to come by these days... 

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#2) On July 14, 2011 at 10:46 AM, Gonzhouse (50.25) wrote:

I wish I could easily refute your position but I can't;  that's the scary part.  The only plausible counterpoint I can think of is that politicians will always pull back from the abyss when it gets close enough.  But even that goes against another favorite saying:  never say never.

The situation of political/economic crisis combined with the advice to invest in precious metals is remarkably rich in irony. Politicians have created this crisis; the advice to invest in precious metals is a take on another political saying:  Don't let a good crisis go to waste.

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#3) On July 14, 2011 at 11:12 AM, fndr489 (78.89) wrote:

Sinch,

 Any thoughts on these south pacific mega gold discoveries?  the other day my boss was talking about a small Canadian exploration company finding a gold deposit worth over $63 billion or "more than Ft. Knox" as he claimed.  For the life of me I couldn't get the name of the company out of him so I was wondering if you knew.

And when are we going to get a series on silver investing?

As always, keep up the good work and thank you for sharing your knowledge.

Justin

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#4) On July 14, 2011 at 11:18 AM, XMFSinchiruna (27.52) wrote:

fndr,

Top 10 silver stocks coming hopefully next week! Stay tuned. As for methods for silver investing, one can seamlessly apply the preceding discussion relating to gold miners.

Gold in the South Pacific? Ummm... need a little more info to go on there.  Sry.

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#5) On July 14, 2011 at 11:53 AM, fndr489 (78.89) wrote:

Sinch,

 Yeah, that's usually all the info I get from him anyway.  Which is why I prefer your blogs and articles.

Looking forward to more of your work!

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#6) On July 14, 2011 at 12:01 PM, jesusfreakinco (28.94) wrote:

Chris,

After having been trading / investing in Gold/Silver for 6+ years, I took a break for a few weeks.  I am back in, but no longer going to trade / invest on margin.  I have finally wised up!  Too much heartache with the volatility and need to focus on other things such as family and my day job.

Thanks for all your encouragement to do the right thing and your guidance through the storms.

Upward and onward for Gold and Silver!

JFC

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#7) On July 14, 2011 at 12:27 PM, XMFSinchiruna (27.52) wrote:

JFC,

I'm delighted to hear it!

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#8) On July 14, 2011 at 3:57 PM, jesusfreakinco (28.94) wrote:

TMFSinchiruna

Yeah... stress level has decreased dramatically and realistically, I am not sure I am able to make more money on margin.  It is worth the reduced stress, no doubt...

JFC

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#9) On July 15, 2011 at 12:14 PM, 100ozRound (29.42) wrote:

Sinch

Are you familiar with Prophecy Resources (PRPCF)? They recently spun off their metals into Prophecy Platinum (PNIKD) and they are looking at pretty big (indicated and inferred) numbers at their Wellgreen property.  Needless to say, the have gone from about $.60 per share two days ago to just over $2 per share today.

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#10) On July 15, 2011 at 3:15 PM, XMFSinchiruna (27.52) wrote:

100oz, I own a very, very tiny sliver just for fun. Not a company I have much confidence in at all.

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#11) On July 15, 2011 at 3:26 PM, 100ozRound (29.42) wrote:

that's kinda what I wanted to know.  Thanks!

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