What are cheap? Some Gold and silver stocks…

We cannot tell the future but we try anyway. It seems to us that the stock market is as vulnerable to a more than 20% downside as it has ever been. The true P/E ratios for some of the leading stocks are at nose bleed levels, insiders who as officers and directors are the most informed of all have been selling at one of the highest rates ever. Last week they sold $456 million of their own personally held shares. Moreover the value of all stocks is now minimally at approximately 126% of Gross Domestic Product which at these levels in the past has led to the most brutal of bear markets.

View the retail sector in the U.S. and you see a disaster. Look at the auto industry….it simply cannot sell enough cars. The other side is that the quality and longevity of most automobiles is so high that the purchase of new cars is not necessary at the same rate that it was in the past.

Get this very clear, the brokerage industry cannot afford another bear market nor can most governments, provinces and states. All steps have been taken to keep the stock market up. That includes the central banks now buying stocks to support the stock markets throughout the world. One can see the central bank come in at the last moments and the stock market turns up on a dime. One can also see the blatant manipulation of the gold and silver markets through the commodities “paper market.”

While some have advised not to invest in gold mining stocks over the last three years, we did and did see some go up 800% to 1200% during this time period.  Every stock is different and all do not bottom at the same time. The greatest time to invest in mining stocks is when they are being bludgeoned and have plunged in price. Our analysis suggests that prudent accumulation of mining shares will be well rewarded soon.

Our analysis has indicated that gold stocks are at the cheapest valuation levels in decades. And as always, few investors will take advantage of it. As well, there are numerous stocks in other sectors that are overlooked and offer superb value but you have to find them yourself in market newsletters and private investment services.

“ When prices are high, they run to buy……….. When prices are low, they let them go.”

                                                 For most investors, that will never change