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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?


To: TobagoJack who wrote (179699)10/26/2021 4:55:49 PM
From: sense1 Recommendation

Recommended By
Litore Lapis

  Read Replies (1) | Respond to of 182946
 
Gold is on sale in relative terms...

And, its not a mystery (at least not here) in how and why the manager's special exists...

As we've discussed every possible aspect of that in gold's role over the last while... along with the same in relation to fiat and the inflation issues... with the dollar, as ugly as it is, still being the least abused and degraded of all the fiats...One of the few constants you can rely upon, when you KNOW that you can't trust the banks (or their market minions) to be honest... is found in the predictability of investors behavior... as sheep will always be sheep... most being willingly herded.

Beyond the obvious in serial proofs of investors cupidity... where "don't fight the Fed" is taken as willing grant of a license for the Fed (all bankers, really) to abuse trust...

The obvious constant is... shoppers are always happy to find steaks on sale, and will gladly load the freezer when Prime tenderloin is marked down by 50%... but investors HATE buying on sale... always preferring to believe that the same item as was on sale at half off recently... represents a better value when you have to pay more for it...

One of the key impacts of that reality in behavior... occurs as most investors really don't understand value in in shopping as the same thing in the context of investment: so the choices they do make tend to amplify price swings rather than moderate them... routinely making lower lows and higher highs as investors alternately abandon some value as worthless, only to then reverse course and mindlessly chase after the "hot item" of the moment... the same pattern seen whether in chasing a meme stock... or following the Ponzi logic of the momo trade in the constant pursuit of the more ponderous "steady rise" in prices. One impact is seen in shares, taken in the aggregate as the entire market... becoming more and more over-valued over time... but, the constant requires that the inverse occurs, also, either serially, or in parallel...

The serial, obviously, occurs in swings from frothy market peaks to the depths of despair at the bottom in bear markets... when most investors have given up on markets or owning stocks as useful to them...

But, the parallel instance... always there too... where one trade is over-priced.... and another is ignored.

The gold price chart... doesn't begin to do justice to the nature of the swings in price that occur... as the market rotation from focusing on one set of values to another occurs...

Shares tend to leverage that price change, up or down... less as a function of gold's price... and more as a driver of investors focus as the direction of change in the price leads them...

Gold has shed only some 20% since August 2020...in dollar terms... dropping from near 2100 to 1800... while many shares have lost significantly more... Gold, during that time, has remained immutable... unchanged in every aspect but price... while the price, in relative terms, has become something of a scandal... but, that's only more true, in both absolute and relative terms, of many mining shares. Many mining companies have significantly improved their position over the last fourteen months, generating significantly larger value today... while the market, particularly since June 2021... has significantly discounted the value of what they already had, while cutting prices by an additional 50% or more... while entirely ignoring what they've been able to generate in new value over that time...

I've spent the time since last April... focused on finding those miners that are most undervalued... but, recently, focused more on finding those few that have been succeeding in creating larger value over time... with lower risks than others... while the market continues to mark them down with the market, while ignoring their progress and even ignoring surprisingly large proofs of major successes...

There are a lot of big name gold (and silver) mining companies... still on sale now... that will do very well as gold turns the corner and moves higher... and a lot of smaller gold (and silver) miners that will do well in parallel with them... the smaller ones often with greater volatility tied to the market's whim in choosing to reverse course in valuing them, or not...

But, the sweet spot... is finding those companies that have been ignored along with the others... whose shares are still on sale now... while they've been succeeding disproportionately in improving their position relative to the others in the market... finding high value deposits... with high grades of gold (silver) that are near surface, and easily mined... close to supporting infrastructure, making them readily develop-able... while the combination ensures they'll produce larger than typical values at lower than average cost...

When the market ignores miners... it does little to discriminate between them based on variations in emergent values that the market is intent on ignoring ?

Investors who recognize it when stocks are on sale... and who respond to it as being much the same thing as Prime tenderloin on sale... while taking the opportunity to load up at the market lows... should note it, too, when hamburger and tenderloin are so deeply out of favor that there are few buyers... and thus both are found on sale for basically the same price ? That ready availability and the relative lack of price discrimination that results... isn't the same thing as hamburger and tenderloin having "the same value" ?

As a long running bear market ends... as gold's bear market tentatively ended back in 2016 - 2018... you'll see better positioned "finders" run from pennies to dollars...

And, in a market like that we've had over the last year, more over the last few months... they'll go on sale, again... with 50% or larger discounts being routine. But, at the same time... there will be new entrants emerging who've not yet enjoyed that early move others made back in 2016... but languish in relative obscurity, for now, since gold is once again "out of favor" ? Gold will correct to mean on historical trends... and as it does, you might expect the market participation in the gold trade to triple, or more... applying massive leverage in the trade.

It leaves open questions about what the "mean on historical trends" means we should be expecting, now... at a potential generational and technological inflection point in the existing fiat-based monetary domain ?

Ignore the potential that Basel III... or subsequent events... might signify a major reversal in banks long running interest and role in suppressing gold's price relative to fiat ? And, beyond that... potential that gold might be re-monetized rather than suppressed ? Even without any of that... I doubt many alive today can remember the last time... Cathie Wood's worst nightmare... when the top gold miners were among those at the top of the list in "the stocks that everyone has to own"... as I think they were in the early 1960's ?

I think few in the market... even among those that are bullish on gold... fully comprehend how badly it has been treated by the markets, how brutally discounted, over the years in which fiat has tried to supplant it...

Not just since Bretton Woods or Nixon closing the gold window in 1971... but essentially the entire time since gold and silver were last used as money and issued as coin... without having to fight the franchise in the monopoly of the bankers bad new money chasing out the good ?

Many miners shares will rise in a bull market... well established companies perhaps even delivering a 10X... in a routine bull market that's like the others we've seen in the last few decades... even though no one will try to tell you, today, that the market situation we face is just the same as we've seen in recent decades ?

But, even sticking well within the decades long routine... there are some few out there that trade for pennies now... that will trade for multiples in dollars near the peak of a bull market... and some few among them... will succeed in making the transition from being penny stocks in 2021... to being future market leaders... much the same way that Kirkland Lake made that transition between 2000 and today ?



It's not a mystery what that requires... but, for now, the market doesn't care, so most don't bother looking to see if they can find that, at all... much less looking to see if they can find it on sale, just now ?

In the mining stocks (and oil, gas, silver, copper, etc.)... the time for patience and "waiting for" an entry point... seems it is over.

Now... the focus in "waiting for it"... shifts from waiting for an entry point for a trade... to waiting for the next commodity bull market peak ? So, life is all and always, only, about waiting for it... ? Or, its about the rest of what you do... once you have the trade figured out... while you are waiting for others to figure it out ? Patience... being a virtue... is always a value... and if perhaps it doesn't discriminate much re the direction of the trade... it does require you to have a feel for which side of the trade to be on... while being patient ?