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As an investor in the precious
metals sector no doubt you are getting tired of waiting and probably on the
verge of giving up. In our opinion, don't.
Yes, while many analysts,
including us, are optimistic of a great explosion in the share prices of most
precious metals shares, our timing has been elusive.
Fear is everywhere and everyday we
hear that the PM markets will meltdown once again following the financial
markets down and then investors will have the last great buying opportunity.
We admit a major turn down in the financial markets could happen but we are
not sure that the PM shares need to decline as well. And we ask, what if the
meltdown does not come and the PM's take off to the upside leaving many
investors on the sidelines?
If you have been investing in this
sector for a few years you are probably not making money except in unique
company situations. The fear and losses incurred in late 2008 still weigh
heavy on the portfolio of investors.
Until new money enters the markets
or investor sentiment changes dramatically our dreams of a full blown bull
market will continue to elude us but markets and sentiment can change very
quickly.
We want to take you back to August
1979 and show you where gold and silver were trading. Remember the highs were
reached only 6 months later.
Look closely at this chart of gold
as in August 1979 it was trading at around $300 an ounce. In January only 6
months later gold touched $850 an ounce. Thus a multiple of 2.83 was achieved
in only 6 months time.
Now let's look at silver:
Again look closely and you will
see silver in August 1979 was around $9.50 an oz and in six months spiked up
to let's say $45. The multiple here being 4.73 thus outperforming gold in
this timeframe.
Our point is that gold and silver
can soar greatly in a very short period time and we believe this could very
well happen much sooner than most investors and analysts would expect.
Gold projection
Taking the above multiples and using a current gold price of about $1210 we
could see gold spike up to $3424.
Silver projection
With the multiple of 4.73 for silver and a current price of $18.30 we could
see silver spike up to $86.56
We realize these projections are
difficult for many of you to believe but the markets have the ability to turn
on a dime and we believe there is better than a 50-50 chance once again in
this August 2010 to January 2011 timeframe for a major move.
Somewhere in this move the PM
shares and of course and warrants trading on those shares will be exploding
upwards in price.
Worst Case
Scenario
For those investors already loaded up with shares or warrants we urge you to
be patient. Yes, our timing could be off but we believe this major move will
happen within the next two years but probably in the next 7 months.
For new investors we suggest you
finish your shopping for PM shares soon and get ready. We're going to have
some fun.
What is our worst fear? Selling
too soon as it will be difficult to ride this wave up to the top.
Dudley Baker
PreciousMetalsWarrants
Dudley Baker is
the owner/editor of Precious Metals Warrants, a market data service which
provides you with the details on all mining & energy companies with
warrants trading on the U. S. and Canadian Exchanges.
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