Montreal Analyst

Stock Market Value to Gross Domestic Product looms over everything we do…and? $16,617,000,000,000 ! Be aware that the dollar value the Standard and Poor’s 500 which represents approximately 74% of the value of all the United States publicly traded stocks is currently at $16,617,000,000,000 ($16.6 Trillion). We also estimate the dollar value of the non-Standard and Poor’s 500 stocks to have a value of approximately $4 Trillion. (By the way, at its 2001 high, just NASDAQ carried a value of $6.7 trillion which was a ludicrous overvaluation but very few paid attention.)

From www.Canadianmineanalyis.com site 1-Shareholders of gold mining stocks must keep in mind that we do not have the requisite start of a bull market in gold bullion yet. It is coming and we think that it will begin soon, but note that last summer of 2013, we suggested that many gold stocks were in the process of making their bottoms which they have now completed.

                               The Ominous Indicator….Stock Market Value to Gross Domestic Product Generally speaking, we are always fully invested in the stock market. We look for stocks that are suffering through bear markets and take positions. We are bottom fishers in every sense. For three years we were expecting on average 20% declines followed by returns up which would have washed out or at least limited overvaluations. However with near zero interest rates, the reasonable and normal corrections have been avoided. Corrections and bear markets permit investors the opportunity to invest when stocks are on sale. Simply stated, better and cheaper buying opportunities present themselves regularly. It is when excesses are flushed out.

 What are our requirements for the gold mining stocks to start an exceptional performance that our analysis suggests will soon occur? Well, minimally a $1400 Gold price, plus severe weakness in the industrial stock market (Dow Jones and S&P 500) and more true physical delivery demanded for gold purchased, for example it cannot be left at the New York Fed for “safekeeping.” Safekeeping?

Why have we not seen a bear market yet? Simply stated, key bear market components are not occurring-yet. We are not seeing our requisite ingredients for a bear market which are 1-Rising interest rates. 2-Contracting money supply growth (although the velocity of money is quite low) 3-No recession…not yet anyway depending on who or what you believe. So the key ingredients for a bear market are not in place……yet.

CanadianMineAnalysis.com article 1-Many mining stocks actually made their price bottoms last summer and have groped along since then. Others are in the process of finishing making their price bottoms. It is not an “all of them at once” situation; each stock is on its own schedule. 2-The Return of a positive gold market is required to start the engine. We need $1400 to $1450 an ounce gold to really ignite investor interest. At the present, while gold is languishing at the $1250 level, many mining stocks and some juniors are so cheap based upon their in-ground assets and cash per share that they are being given away at their current prices. But at price bottoms in any investment, very few take advantage of the “sale” on the stocks, that will never change. 3-Manipulation in the price of gold bullion continues which has made it extremely difficult to forecast. Paper commodity trades dominate the manipulation which is engineered by central bankers and brokers to keep the price of gold down. When gold moves up, governments cannot easily sell bonds carrying rates at 2% to investors. But the Chinese and others use the weakness to their advantage to accumulate whatever bullion that is offered for sale. The Chinese are nobody’s fools as they see price weakness as a buying opportunity and presently are buying approximately half of the world’s gold production. 4-Gold Cycles? They are positive for gold now as they suggest that gold’s price bottom is being completed. Yes, some important […]

What is “Dollar Cost Averaging” and why does it work?                                    By Bob Pellerin and K.C. Grainger, CanadianMineAnalysis.com   1. The cyclical price action of the markets often brings many investments into a traditionally attractive buying range. During the downside moves, many stocks can be found selling at prices that have proven over the years to be excellent buying opportunities. The most successful investors make their commitments after a severe decline in the prices of these stocks while pessimism is still running high. Simply stated, they take advantage of the market’s cycles!     2. Dollar cost averaging is a method of investing equal amounts of money regularly and periodically over specific time periods (such as $2000 monthly for 12 months) in a particular investment(s) or generally buying more shares of the same stocks when they decline in price. By doing so, more shares are purchased when prices are low and fewer shares are purchased when prices are high.     3. Why it works? The primary benefit is to lower the average cost per share of the investment, giving the investor a lower average cost for the shares purchased over time. Investors should note that Junior small cap mining stocks have enormous price volatility both up and down, so if the fundamentals of a stock(s) still justify investment, it merits even more attention at the lower prices. It can very effective for the Junior mining stocks as stocks often lose […]

Canadian Min Analysis 1-Is the price of gold being manipulated? We think it is, how can governments issue  debt at under 1% to 3% with some food and energy prices rising over 40% in some categories over the last five years? Central bankers do not want to see gold moving up. And isn’t it odd how suddenly in a quiet market we see large amounts of gold on the Comex suddenly sold in what seems to be “market orders”? In other words,  it seems that the gold is being sold, not trying to get the best price for the client but with the intent to affect the price of gold-down!  In the opinion of many, paper trades such as those transacted on a commodity exchange have been a ruse to create an image of price weakness in gold and it has worked.  2-Over a year ago, Germany requested  delivery of its 350 tonnes of gold held in “safekeeping” at the New York Fed and for some reason it could not be delivered. Germany was told that they can expect 50 tonnes per year for the next seven years. Of course, we don’t know, but we are told that they have received a mere 5 tonnes so far. The fact is that if delivery is demanded by gold bullion buyers throughout the world, the price of gold could rise dramatically just on that basis.  3-Are central banks colluding to keep gold down?  We don’t know, but keep in mind that some […]