Some time ago we recommended Gryphon Minerals (GRY.ASX) as a short term trade. This stock however is a great story, and given that gold is so 'cheap', we suggest that today is the day to start accumulating stock. The reason is:
1. The 'bottom-up strategic value of a great corporation described in my previous blog.
2. The absence of downside - the company at 13.5c is capitalised at $52mil - the company has $62mil in cash, not to mention 4Moz of gold in the ground conservatively worth $2-3billion depending on the gold price. This is a great company, so there is no reason to think its not going to get finance, or be able to produce gold. What were you told about risk is inverse to return, and that 'small companies' are risky....its nonsense. Risk = ignorance. Understand mining and you understand how to make money. Mining is an industry that will never go away....not as long as your bastard kids keep breeding and wanting ipads (aka tantalum, copper, nickel, tin, aluminium, et al).
3. Gold is near its historic support levels - the market will know this, so don't attempt to pick the bottom with your only trade. Find 3 trade entry points, and stick to your plan. So what is the low in gold prices - check this chart - you will see that gold is looking at a retracement to $1090/oz. Now, the global markets have today as much debt as they did after WWII. Now, that's ok because markets are destined to be debased by inflationary Quantitative Easing, which is going to cause a recovery in gold.
This is the plan. If you see a significant collapse in gold prices below what I've saying, then you should sell your shares..but not too cheap because they are trading at below cash value already. Its kind of what you might regard as a 'win-win'. Mind you in the process of writing this, they are now 13.5c buyer..but you will still get a chance, as gold is still $1200/oz, down $40/oz today, but its still got to go to $1090/oz, right!
Asian property markets outperforming Japan Foreclosed Guide Philippines Property Guide1. The 'bottom-up strategic value of a great corporation described in my previous blog.
2. The absence of downside - the company at 13.5c is capitalised at $52mil - the company has $62mil in cash, not to mention 4Moz of gold in the ground conservatively worth $2-3billion depending on the gold price. This is a great company, so there is no reason to think its not going to get finance, or be able to produce gold. What were you told about risk is inverse to return, and that 'small companies' are risky....its nonsense. Risk = ignorance. Understand mining and you understand how to make money. Mining is an industry that will never go away....not as long as your bastard kids keep breeding and wanting ipads (aka tantalum, copper, nickel, tin, aluminium, et al).
3. Gold is near its historic support levels - the market will know this, so don't attempt to pick the bottom with your only trade. Find 3 trade entry points, and stick to your plan. So what is the low in gold prices - check this chart - you will see that gold is looking at a retracement to $1090/oz. Now, the global markets have today as much debt as they did after WWII. Now, that's ok because markets are destined to be debased by inflationary Quantitative Easing, which is going to cause a recovery in gold.
This is the plan. If you see a significant collapse in gold prices below what I've saying, then you should sell your shares..but not too cheap because they are trading at below cash value already. Its kind of what you might regard as a 'win-win'. Mind you in the process of writing this, they are now 13.5c buyer..but you will still get a chance, as gold is still $1200/oz, down $40/oz today, but its still got to go to $1090/oz, right!
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