Gold and Silver Shares, Act II

GOLD AND SILVER SHARES, ACT II
AAII MEETING, L.A., April 16, 2011
Presented by Michael McGowan JD, CFP®
Usual Disclaimers Apply. These are FF’s Opinions.
HEADLINE MESSAGE TODAY
WINERY,
RACING
CARS,
HORSES...
"
STOCKS
REAL ESTATE
BONDS
GOLD, SILVER 20% CASH
COMMODITIES
June, 2010
RESIDENCE
SAVINGS
RET. PLAN
INS.
ESTATE PLAN
"Buy Low, Sell High" Means Buy Weakness, Sell Strength.
COMMODITIES 2001-2011
Ibbotson Commodities Cycles Report. [BRIC]
Until 2006, Miners Still Forward Selling Cu!
Ore = "Minerals Mineable Profitably."
Feasibility Study Needed for Bank Loans.
Major Miners Hunt Jrs.
10 Years to Production.
Then 10 Year Life…
FOGHORN ON GOLD INVESTING
“Investing is About Probabilities, About
"Animal Spirits,” And Change!
M.P.T. - 80% of Returns Come
From Secular Trend (Bull/Bear).
A Secular Bull Market Trend Runs
On Supply/Demand Imbalance Anticipation.
Study Portfolio Managers Who've Made Money.
To Participate: Broker/Funds, Newsletters, Self.
"GOLD IS MONEY," JP MORGAN
Is Sturdy/Inert Chemically. Doesn't Oxidize.
Is Alloyable. Animals, Vegetables Aren’t.
Is Divisible. Retains Properties.
Is Ductile. Can be Stretched.
Is Portable. Travels; No One’s Obligation.
Is Recognizable. Assayable,Weighable.
Is Scarce. High Unit Value. (BUT, Inconvenient.)
Memory Tip: “It’s a SADD PRS Without Gold.”
EVERYDAY REFERENCES TO GOLD
California: Golden State
A Golden Age
Gold Rush
Heart of Gold
Midas’ Golden Touch
The Golden Rule
Jason & Golden Fleece
A Gold Credit Card
Golden Parachute
Gold Coast
Golden Boy
Gold-Digger
Olympcs,Oscar,Tony
GGlobes, Emmy
State House Roof
A Gold Record
Alka Seltzer Gold
Amstel Gold Beer
Hyatt Gold Passport
Gold Medal Flour
Honda Gold Wing
Cent.-21, Gold Std.
McD Golden Arches
Goldmember Song+
Movies: Die Hard 3+
DOLLAR “DOWN”
GOLD “UP”
REASONS FOR PM BULL MARKET
BOnd Market Peak. [Real Rates - Negative]
COmmodities in Bull Market.
DOllar Sinking/ Euros? Yen?
COnfidence in Equities Down.
Trade Deficit: $700 Billion, Rising.
Deficit (Federal)-Monetary Inflation.
Debts: Govts, Banks, Individuals=Enormous.
Demand/Supply Gap of PMs Expanding.
Derivatives - $1Q, Unfunded, Overvalued.
Global Issues: Wars, RE, Etc...Au=Insurance.
HOW NOT TO BUY GOLD
Numismatic Coins: Expertise.
TV, EBay Gold: Big Mark-Ups.
Jewelry: 10% Gold?
(No Envelope Sales Either.)
Bars: Real or Tungsten?
Paper: GLD, SLV, Wts-No!
Futures: 80% Investors Lose.
?
GOLD DEFENSE: PHYSICAL PMs
COINS Are Free From Counterparty Risk.
Any Recent Date, Bullion Coins; 5%.
Eagles, Dimes Maples, Libertads.
No Commemoratives,"Storage."
Not GLD, SLV (ETFs) Avoid!
Coins Are Like Wine Cellar; Don’t Trade Em!
Visit: Long Beach Coin Show, www.gata.org.
GOLD OFFENSE: PM SHARES
“Bull Markets are Born on Pessimism,
Grow on Skepticism,
Mature on Optimism,
And Die on Euphoria.”
Sir John Templeton
Secular Bull = P/E's Up. Relative Perf. Ok.
Secular Bear=P/E's Down. Need Absolute Perf.
2011 Market: 2nd of 3 Acts; Rise to $3k+/Oz.
Buy, Hold Bricks; Trade Specs. Mr. Darcy £10k.
BULL MARKETS RUN IN 3 ACTS
PRECIOUS METAL RESOURCES
FREE:
www.theaureport.com
.northernminer.com
.infomine.com
.youtube.com(miners)
.321gold.com
.jsmineset.com
.goldseek.com
.silverseek.com
.gata.org
.zerohedge.com
NOT FREE:
www.iiconf.com
.cambridgehouse.com
.goldstockanalyst.com
.dinesletter.com
.lemetropolecafe.com
hardrockanalyst.com
Precious Metal Investing
for Dummies, '08
Mining Explained, N.M.
FFs Guide to Gold, ‘08
GSA 10 YEAR TRACK RECORD
See: www.goldstockanalyst.com, Sample Letter Top Ten, of April 2009.
PM GEOLOGY TERMINOLOGY
Reserves: Defined by Ni 43-101/JORC.
OP/Heap Leaching: Cheapest.
Oxides: Cheapest Ore (Weathered).
Strip Ratio of 1.5 to 1 = 1.5 Tons of
Overburden Removed Above Ore.
High Grading: When Ore Prices Low,
Miners Dig High Grade Ore Only.
Profits = Cash Flow, Au Price, Buyout.
JUNIOR MINING STOCKS - FULP
1. Politically Safe, Flagship Project.[200k Oz/Y.]
2. [Usually Au & Ag-OP, Oxides, HL, High Grade]
3. Experienced, Honest People.
4. Tight Share Structure.(<100M Shr)
5. Cashed Up & Access to Financing.
Mr. DYODD
6. Professional Website, Board.
7. "Undervalued" [& 3rd Party Eval.]
www.miningcompanyreport.com/musings of:
Aug.25,‘08, Dec.15,‘08, Feb.23,‘09, Dec.6,'10.
"MINING STOCKS ARE BURNING
MATCHES." DOUG CASEY
GOLD MINING SPECULATIONS
GoldCorp (GG) $43, 12 Mines,
2.7M Oz. Prod. in '11.
Yamana (AUY) $12, 3 Mines,
1 M+ Oz. Brazil Production.
New Gold (NGD) $10, 350k Oz,
3 Mines, Growing, Low Cost.
Gold Resource (GORO) $25,
50k Oz, Mex. Producer, Div.
Premier Gold (PIRGF.PK) $7,
Ewan Downie, Red Lake.
Crocodile Mining (CROCF.PK)
$1, Aus, 100k+ Production.
PMs ARE “ACTIVELY MANAGED”
Gold Anti-Trust Action Comm., www.gata.org,
John Embry, Sprott.com,
James Turk, goldmoney.com,
Doug Casey, caseyresearch.com,
Harry Schultz, Consultant,
Richard Russell, Dow Theory,
Paul Volcker Interview,
Gulf Cooperation Council,
(Strong
Vice Chair, Russian Central Bank,
Dollar
Credit Agricole Report,
Policy)
Citicorp Equities Report,
Don Coxe, Global Strategist, BMO, ETC.
"ONLY A FOOL DISBELIEVES IN GOLD"
(Every Fiat
You Will Not Get Happy!Currencyexc. dollarHas Died.
Every PM
Coin Ever
Minted is
You Will Get Happy. Still Really
Valuable.)
Secular Gold Bull Market, 10 Years Old, Growing.
UNDERSTANDING SILVER
Industrial & Monetary Metal.
Highest Electrical Conductivity.
Highest Solar Reflectiveness.
2/3 Ag Comes from Gold, Cu, Zn, Pb Mines.
US Strategic Stockpile Depleted 11/27/2000.
680M Oz. Mined 2008, Demand 800M Oz.
“Little Brother” Trading Pattern With Gold.
Seasonality: Runs Up From Sept. to May...
SILVER MINING SPECULATIONS
Silver Wheaton (SLW) $43,
$15B MCap, Caymans HQ,
$4.01 Cost, Royalty Co.
Pan American (PAAS) $39,
$4.2B MCap, 9 Mines, Aquiline.
Hecla (HL) $9, Idaho,
$2.8B MCap, High Cost Mines.
MineFinders (MFN) $10,
$1.2B MCap, Mex Mine Operator.
Great Panther (GPL) $4,
Mex., $473M Mcap, 4M Oz,
SUGGESTED PM SPECULATION
(Start at
Bottom of
Pyramid;
Work Your
Way Up.)
4. Dev/Explorers:
TC, PIRGF, AUNFF
3. Producers:
GORO, NGD,
MFN, GPL
2. Royalty: RGLD, SLW, FNNVF
Majors: GG, PAAS, AUY,
[Tier 2, 3-GSA Top Ten, Exc. PAAS, GPL.]
"You Can’t
Kiss ‘Em All,"
But Kiss At
Least 5 Names.
1. Coins; Then Bullion Funds: CEF, PHYS
Share ETF: GDX, GDXJ, GLDX, SIL
Income: GGN (Yield: 14 Cents a Month)
WWW.LEMETROPOLECAFE.COM, 3-30-2011
GREAT SITE; TRY TWO WEEKS FOR FREE