The Mining Speculator (TMS)
Greg's Mining Speculator has been a great value to investors over the last 17 years and is your best bet for financial security in these troubling times.
With all the uncertanities in our world currently, there has never been a better time to be a subscriber.
Without question, the best opportunities for investors to protect themselves against the coming financial reckoning are with precious metals and mining stocks. Our team of analysts scours the globe for these opportunities as protection against the financial uncertainties that currently engulf U.S. and world markets. As the saying goes, "Periods of great crisis also offer great opportunity."
Those opportunities are found in the commodities markets, and have proven to be winners for our readers since 2000.
As a matter of fact, The Mining Speculator's portfolio saw an average gain of 212% over five straight years! Part of those gains can be attributed to our picks in junior mining stocks, which are known to give explosive profits...
You see, it's not uncommon for junior mining companies to experience huge gains (tenfold or more) very quickly as news of a discovery leaks out. On top of that, the ongoing bull market in precious metals not only focuses more attention on the sector; but it also causes even more money to be spent on exploration. And the payback for a new find increases exponentially.
The Mining Speculator has been recommending that clients take a position in precious metals and base metals mining shares.
When we first began making these recommendations, hardly anyone was listening – yet those early clients who did listen have made tremendous returns. They bought when the news concerning the mining sector was very negative.
Even now, few are paying any attention to the mining sector after a recent correction and are still being lured by the Wall Street hype and disinformation to invest in blue chips and the general stock market. We believe that will prove very costly to investors as the bull market rally fizzles and another leg down for general stocks worsens.
While fortunes will be lost by the crowd in the coming stock market meltdown, we believe many new fortunes will be made in the mining stocks.
Richard Russell has weighed in on this very proposition. In the December 2003 issue of his newsletter, Dow Theory Letters, he states the following:
"I believe that fortunes will be made in the years ahead by those who are now establishing major positions in gold and gold shares. I've said this a number of times before, but I want to repeat it: These primary moves last longer than anyone believes possible--and they take the items higher than anyone thinks possible. We're now in a primary bull market in gold. I believe gold (and very probably silver) will make fortunes for those who now take major positions in the precious metals."
The last super bull market in the precious metals from 1975 to 1980 saw many mining stocks go from less than $0.10 cents a share in 1975 to multiple dollars a share by 1980.
Here's just one of the many examples of what happened during that period:
A $5,000 investment (at $0.07 cents a share) in Lion Mines in 1975 turned into $271,429 by 1980. That is not a misprint...more than $271,000 for just $5,000 invested for a whopping increase of 5,427%.
That is what J.P. Getty was talking about when he said, "If you want to make big money, really big money, do what nobody else is doing!"
Our view on the current state of affairs for the general stock market is that we are seeing a bubble created by the FED's quantitative easing that will eventually cause a major downturn for DOW stocks.
A key lesson about markets is this: "Bear" markets usually parallel the "bull" markets that precede them. "Super-bear" markets traditionally follow "super-bull" markets.
We have recently witnessed the greatest bull market in history as the Dow is now trading (as of this writing) at 16,520. In our view this is unsustainable if you understand why this has occurred.
The Dow is where it is because of all the funny money created by the FED through quantitative easing. This has created a bubble that is unsustainable.
We believe we will see a "super bear" market that will last for years – despite what the politicians and the mainstream media want you to think. Unfortunately, many investors will be wiped out in this coming financial storm, which we believe will witness the collapse of the U.S. Dollar.
One notable quote from Barron's magazine says it all:
"I don't know how anybody with an IQ over 70 can be anything but utterly pessimistic about the long-term outlook for the U.S. economy. We've lost our manufacturing base. We're financially irresponsible. The whole world hates us and everybody's – and I mean everybody's – emphasis is on the short-term outlook. Nobody is focused on solving real structural problems, organic structural problems that exist." – Marty Whitman, Third Avenue Value Fund
From a historical viewpoint, the general stock market is extremely overpriced, and the precious metals and their mining shares are still extremely undervalued to where we believe they are headed.
If J.P. Getty were alive today, we believe he would be having a field day with purchases of precious metals and select mining stocks.
While the returns of gold bullion are negatively correlated with most other investment classes such as stocks, bonds and currencies, gold shares can provide an even more efficient investment insurance policy. This is true because gold mining companies' profits – and thus share valuations – are leveraged to the price of gold.
Historically, the leverage factor for major mining firms is somewhere between three and five times. So if the price of gold rises by 10%, we can expect the share prices of mining firms to rise by a factor between 30% and 50%.
Since we see the price of gold headed well above its all-time high of $1,950 an ounce, gold mining shares are going to do very, very well.
Though we live in dangerous financial times, each period of danger and crisis provides exceptional opportunities to enhance and protect our wealth. We can't control what the politicians and power elite do, but we can take steps to protect our finances and loved ones.
It is not "un-American" to protect your money; investments in the precious metals and their mining stocks should go a long way to accomplishing our objectives.
The Mining Speculator was started to help investors find sensible speculations that have limited downside and huge upside potential. We make recommendations on mining stocks that in our opinion have 10 x or better potential under the current market conditions. The best leverage for making such returns in our opinion is currently found in the junior mining stocks.
We'll end with a quote from Warren Buffett (another favorite of ours):
"To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights or insider information. What is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework."
At The Mining Speculator we hope to provide that framework for your investing success in the mining stocks and any other market that interests us. As other markets become undervalued and out of favor we will look to invest in them and will make suggestions about where J.P. Getty might have been placing some money!
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Greg standing next to the tires of the huge hauling trucks at Barrick Gold's Pipeline Gold Mine in Nevada.
"When I first met you, you told me I could use the profits I would make in the mining stocks to pay off my house. I didn’t really believe you. Two and half years later I wrote a check to do just that. I never thought this would be possible. Thank you so much for your wise guidance."
– Robert (Indiana)
Greg McCoach, editor of The Mining Speculator, was featured on CNBC in 2007 and was asked his opinion on gold prices. At the time, gold was trading for $637/ounce. He predicted Gold to go over $1,000/ounce in a 12-24 month period. Of course he was right!