The year is 2022 and I've finally achieved my goal of reaching the 7 digit club. That's right have officially succeeded at becoming a millionaire. All my family and friends watched me accumulate my fortune regretting not getting into any of the stocks I mentioned while they were near bottom of the markets in 2016. They always had excuses like "I don't know how to set up a stock account" or "I have no extra money" so instead they continued to talk about how they wanted to invest while taking no action. Oddly enough though, they somehow have money now and are a genius about what stock broker to use. They are piling in the the same company's in the gold and uranium sector that I used as my vehicle to create my fortune and at a time I am starting to sell. For some reason they think now is the golden opportunity to jump in to these stocks after I have made 4000% gains from the majority of my positions. I tried telling them back when uranium was at $25 that that average all in cost to produce uranium is about 35 dollars and demand looks like its set to grow for the next decade, while the collapse in the spot price will create lower supply. They didn't understand how that was the real opportunity back 5-6 years ago. I also tried telling them central banks are printing huge amounts of money in the trillions! This will create inflation which will boost gold huge! You could tell they were confused as they zoned out imagining what the number even looks like.
As of now, gold is approaching 3000, and Uranium is approaching 200 level. I've closed all of my uranium positions and finally starting to close out on my gold stocks. Even back in 2016-2017, I had thought the price of Uranium would only jump up to the 70-130 dollar level but due to the inflation that has kicked in world wide caused the expense of producing the yellow cake to go up as well. Demand yearly is about 240 million pounds and supply has finally caught up which leads me to believe the price will go down over the near term since at these prices, more supply will continue to come on the market producing a glut. One company I used to profit from this Was Uranium energy corp (UEC) which went to about 45 dollars. That one position was about half my portfolio when I started to position myself for the Uranium bull market back 5 years ago. An incredible gain thanks to the great CEO Amir Adnani. I also Managed to load up on some shares of fission uranium (FCU) that went to up to over $20 a share, giving me a 2500% return! Of course I got some great gains with these two company's but I missed out on some extremely huge returns such as Skyharbour Resources (SYH.V) Which had a low of about 8 cents per share in 2015 to over $15. Talk about some incredible returns, I feel like I just did average. A 5k investment at the bottom of that would had been a value of about a million today!
I have just started to close out some of my mining share positions. They all ran up huge! Brazil resources (Gold.v) is at $30 today, and I first started buying back when it was .50 cents! What a run that stock did. I believe the gold bull market could end here as central banks are finally starting to control the inflation levels but I plan on keeping 10% of my positions no matter where the market goes. If we drop 80-90 percent from these levels, Ill simply buy back the same amount of shares I sell today, since this market works in cycles. Low prices causes low supply which causes higher prices and that leads to higher supply. Works like a charm! I got into Northern Dynasty (NAK) a little late catching it close to the bottom after a really negative article from some short selling scammer company. It went from .28 cents to 3.45 in a year, and i managed to load up on some shares at the 1.30 level after the crash. Trump changed a lot with the EPA which led to the pebble project getting the permits it needs. The stock price jumped up huge tripling in a couple months on this news after already rising with the gold price the couple years. This mine is still years away from producing gold, but for the next cycle, this will be a good play. I have already closed my position on this one. One great stock I missed out on was Minaurum gold inc (MGG.V). It was trading at about .04 cents around the low of 2016 and has surged past $8 now! They have a world class deposit in mexico, and back at the bottom of the market, that mine was really unknown. There are many other company's that had those amazing returns but the risk of trying to find the right stocks were incredibly high.Those who bought near the bottom and held close to the top are multi millionaires from such small investments. I fear the people who watched me make my fortune that are now rushing into these stocks to get rich quick will losing most of what they put into these company's. Only time will tell, who knows. Maybe they will be joining me in the new millionaires club.
-John Hebein-Caunce-
Just a heads up, I do not recommend investing in any of the names above. I own some of the company's but not all. This is a fiction story. Do your own research and decide for yourself. I have no clue what the prices of any of these company's will go to. They could go to 0 even. I only suggest you educate yourself on the commodities and then decide if you wish to speculate in this highly risky market and on what company's.
Wednesday 29 March 2017
Tuesday 14 March 2017
Why I'm bullish on gold
One outcome I have believed was possible is for deflation to take over and cause the price of gold to crash but I have kept my bullish views on the precious metals sector for a really good reason. Mining company's have been cutting cost to try to reduce loses or become profitable since the price slipped in 2011. This has caused a lack of new money going towards exploration. This is great news since the demand is so high for the metals and mines have a limited life time. If a mine has a million ounces of gold and its mined up in a lets say a year as an easy number, but they only discover 500,000 ounces that year of in ground supply for future mining potential, that will throw off future supply. So future supply looks like it could be less. That is exactly what is happening right now, as well as high grading, which is mining only the highest grade spots of a mine leaving only grades that are not economical at these prices. Also there are not very many huge deposits being discovered. All of these are reasons why supply will shrink in the future.
What about demand?
I previously was worried about what if a deflationary environment was to come, and that would drop demand. That could be true, as 2008 showed gold dropped (physical metal seemed to be selling at high volumes though). Even if this is the case though, What has me bullish is the middle class in china and India is growing greatly and they are big buyers of gold! This is what Frank Holmes calls the love trade. This is new demand coming to the market as they have more cash to spend in the future! This will help drift the price of gold upwards, and if another harsh bear market was to hit gold, that would hurt future supply from even less funding for exploration, so the future bull market will just be that much greater. The demand will grow and supply for the time being will shrink until the price drifts upwards enough.
What about demand?
I previously was worried about what if a deflationary environment was to come, and that would drop demand. That could be true, as 2008 showed gold dropped (physical metal seemed to be selling at high volumes though). Even if this is the case though, What has me bullish is the middle class in china and India is growing greatly and they are big buyers of gold! This is what Frank Holmes calls the love trade. This is new demand coming to the market as they have more cash to spend in the future! This will help drift the price of gold upwards, and if another harsh bear market was to hit gold, that would hurt future supply from even less funding for exploration, so the future bull market will just be that much greater. The demand will grow and supply for the time being will shrink until the price drifts upwards enough.
Like Rick Rule says, the cure for low prices is low prices. I cant promise this is the bottom in the metals, but if its not, it will make the bull market so much great due to even less supply.
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