There may never be a better time in our lifetime to invest in the gold mining sector. That sounds extreme but hear me out.
My research has uncovered some amazing facts that show that the recent bottom in the gold mining sector has much in common with the bottom in the stock market in 1942.
1942 was literally the worst time for the stock market. It was trading at the same level as in 1901, 41 years earlier. Its rolling 5-year return was the second worst of all time, while its 10-year return nearly the worst of all time. And the market had just endured a 5-year long bear market.
Over the next 14 years the S&P 500 gained nearly 7-fold with only a single bear market of only 30%. The stock market's total return over that period, including dividends was nearly 14-fold!
In early 2016, the Barron's Gold Mining Index was trading at the same level as 42 years earlier. Its rolling 5-year and 10-year returns were the worst in nearly 95 years! The gold mining sector had just endured a nearly 5-year long bear market, its worst bear market ever.
Sir John Templeton, perhaps the great investor of all time said to buy when conditions are the worst. That was true for the stock market in 1942 and likely the case for gold mining companies in January 2016.
This is why I have focused my career on Gold and the junior mining sector. There may be no better time to invest in and speculate in the precious metals sector.
And because of the big correction in the second half of 2016, you get a rare second chance!
Take a look at the following analog charts, which give us an idea of where the bull market is and a potential path going forward.
I'm Jordan Roy-Byrne, CMT, MFTA, the editor and publisher of TheDailyGold Premium. I'm a Chartered Market Technician, a Master of Financial Technical Analysis, a member of the Market Technicians Association and have spoken multiple times at major mining investment conferences.
You may know me from my book, The Coming Renewal of Gold's Secular Bull Market: Dump U.S. Stocks and Prepare for Gold's Final Run, which was first published in May 2015 and correctly anticipated the revival in Gold and gold mining stocks.
Unlike the vast majority of my competitors I invest my own money and inform subscribers as to what I am buying and selling. My model portfolio is a real brokerage portfolio, which provides complete transparency and accountability to subscribers.
Since I started my newsletter in 2009, my portfolio has more than quadrupled. That is during a period when GDX and GDXJ have lost 33% and 38%. Note that the majority of newsletters do not publish portfolio results due to the disastrous losses they incurred from 2011-2015.
You are probably wondering how we generated strong returns during a difficult period. The good news is the sector is in a new bull market and therefore much easier to make money than it was a few years ago. However, making money is not enough. You have to make it and then keep it.
I do not want to share all my secrets but let me provide information relating to our process.
First, we look for the junior companies that own the projects a larger company would want to buy. In short, these are projects with multi-million ounce potential and high margin potential. Second, we want to buy value. The better values we can find, the less downside potential and therefore more potential upside there is.
With respect to the portfolio, we want to size positions correctly. We seek to overweight the positions we are most confident in while underweighting higher risk but higher potential companies.
Finally, there are important rules with respect to taking profits and selling. We always want to cut our losses before they become bigger losses. We use a mental stop loss of 20% on our positions. Also, we should let winners run but periodically "trim" these positions when they become too big.
"I have subscribed to many investment services over my lifetime. I can honestly say Jordan Roy-Byrne has developed not only one of the most analytically accurate, but also has hit the high water mark by making his analysis feel personalized. In addition to a detailed weekly report, he often sends additional emails with daily observations of not only the physical metals and miners, but also related metrics such as the market and currencies. His service is a great integration of history and future probability that has not only helped me make money, but also avoid losing. In fact, the only time I do lose is when I take more aggressive positions than he has recommended, or follow my gut instead of his objective reasoning. It truly is a 5 Star Service at a great price."
— Donovan P. CPA & Attorney
"Jordan's coverage of individual company reports have been invaluable and his trading strategies kept me from losing my shirt in the bear while being positioned for the inevitable upturn. His newsletter subscription price is very reasonable compared with most other perma-bull services that have cost me in the past. Access to Jordan's expertise is a must for any PM sector investor."
— David Erfle, Investment Professional & Kitco Contributor
"I have been following Jordan's work closely for the past four years. I am continually impressed by the volume and quality of content that Jordan puts out on a weekly basis. In spite of precarious market conditions, Jordan's actionable advice has allowed readers to protect their wealth and even make money in a brutal market. Now with Gold showing signs of renewed strength, TheDailyGold is proving to be even more of an indispensable resource for myself and many of my close associates. Jordan's reads on both fundamental and technical indicators are crucial to getting the full picture! I would recommend Jordan's work to anyone interested in investing in the mining space. Understanding the nuances and particulars of the mining sector requires a steep learning curve and it can take years to fully acclimate yourself - that is time that most people do not have. Let Jordan do the work for you!"
— Collin Kettell, Partner & CEO Palisade Capital
"In an industry full of snake oil salesmen and fairly tale promises, Jordan Roy-Byrne's advisory services and deep comprehension of the precious metals market is second to none. He understands that markets have cycles, in particular highly volatile gold mining shares, and helps his subscribers navigate pitfalls by selecting the right securities while hedging downturns. Highly recommended service for those with desire to invest in the gold mining sector. "
— Tiho Brkan, Fund Manager & Business Consultant
There is no catch. For less than $1/day you get my high quality, actionable research and you can invest right alongside me.
There is a second chance opportunity in this sector and if you don't act soon you risk missing the next big move. Warren Buffett always says it's better to be a year early than a day late.
I believe the gold stocks could explode higher over the next 12 to 18 months and 2017 could be your last chance to invest at cheap prices.
"I am simply a pure market-timer for a broad basket of gold stocks and precious metals. Jordan, on the other hand, has provided superior STOCK-PICKING abilities over the longer-term. I am familiar with most gold stock subscription services over the past 30 years. I rarely provide endorsements of any kind, but Jordan's ability to analyze individual gold/silver stocks has been among the top 5 services over the past decade. First and foremost, I respect his integrity. "
— Dr. Jeffrey Kern, Developer of SKI Gold Stocks Trading System