WELCOME to www.myronswinningjuniors.com which is based on my own 5 year success of investing in this specialized market segment. Since I was a teenager I have been studying the relationship between our fiat currency, fractional reserve banking system, and precious metals which served as MONEY for over 5000 years, and it is significant that an oz. of gold or silver will still buy the same goods today as it did at most significant historical points.
It has been mostly downhill since the Federal Reserve Act was established in 1913! Despite periods of seeming prosperity I always knew an economy based on DEBT would eventually implode as it is now doing. My 50 + years of reading hundreds of books to understand HOW the bankers have effectively made the working man and small business man a SLAVE to DEBT is now paying off big time.
The bottom line is PRESERVING purchasing power which no fiat currency in history has ever managed to do, in fact most become worthless in 50 to 100 years, and are replaced regularly. The U.S. dollar which has the privileged position of being the worlds reserve currency is a joke, (a sick one) in that it has lost 97% of its purchasing power, over 30% in just the last decade.
Since the Federal Reserve was established, you need to start thinking in terms of costs of goods in gold and silver rather than being fooled into believing that 3c in purchasing power still constitutes a dollar. The reality is that gold has not gone up, it is fiat currencies that have declined in purchasing power significantly so it takes more of them to buy an ounce of gold or silver.
Gold and silver’s time to reassert themselves as REAL MONEY has come. While the battle still rages between the bankers counterfeit paper substitutes and HONEST MONEY based on MEASURED weights of gold and silver, as required by the U.S. Constitution, victory is in sight. With an average of over 50% compounded profit yearly in my extensive portfolio, I have accumulated free trading shares in HUNDREDS of junior miners, mostly precious and base or strategic metals including rare earths, but also other commodities. I have a plan for investing success in this burgeoning market, so here is my outline for your consideration
Three of the most important attributes of a successful investor are PATIENCE and DISCIPLINE plus an excellent sense of timing. Most investors don’t hear about a company until the most money has already been made. The ability to analyze a junior mining stock on the basis of management’s previous history of success, the quality of the exploration properties and the depth of the financing in place, PLUS proven ability to raise further capital as needed, determine the likelihood of ultimate success of potentially explosive proportions.
To be a successful junior miner investor/speculator you need to know and accept the odds, and most importantly, understand the development cycle of finding a resource and building a mine.
Seven to 10 years is the average from initial discovery to actual production, but that might only be one in a hundred that results in an actual profitable mine, but there is still lots of money to be made in the exploration process that is necessary to find the profitable resources.
These seem like long odds and high risk, but if you play it right you can reduce that perceived risk substantially and the winners payoffs can be so huge it will easily counter a few losers along the way. The 80/20 rule applies here, if your profits on 80% of your picks range from 50% to ten baggers, while on 20% you bail at 25% – 30% losses you will do just fine over a 3-5 year period or market cycle. That means these are usually NOT “Buy and Hold” stocks for such a long period, it means you need to know what stage of development your proposed investment is in, when to take profits, and when the stock is likely to be “dead money” for a time.
It is not at all unusual for a promising property to have $10.’s of millions sunk into sampling and drilling by a company that either abandons it in a down cycle in the market, or maybe even goes bankrupt, only to be picked up for pennies on the dollar by another better financed company when the market improves. Add to that new technology and other factors, and it is not unusual for a property that actually becomes a profitable mine to have gone through several cycles BEFORE final success. The development of a profitable mine that consistently throws of cash may require investment of hundreds of millions of dollars. As per the popular Kenny Rogers song, you need to know, “when to hold em, and when to fold em” and in my extensive research I frequently run across properties that were FIRST looked at 20-30 years ago before final successful development.
What I am trying to convey here is that the RISK in the junior mining sector is not necessarily that much higher than in any other sector of the market, you just need to become a specialist in understanding the market you choose to focus on. Generally the higher the risk, the higher the payoff. Investing in some promising new gadget or technology, the success of a new drug for example, ALL have different risk factors that may be as high or higher than well researched junior miners. If you are not prepared mentally to accept the occasional loss then you should not be in the market period, even dividend paying blue chips have their frequent down cycles.
So you understand where I am coming from, a stool to bet on supporting you has to have at least 3 legs as I covered in my initial points, 1) competent experienced management, 2) a resource with at least some evidence of potential viability, and 3) adequate financing to prove up the potential resource. What I particularly like are companies where management and other insiders hold a significant percentage of the shares and particularly when they employ a royalty and/or “project generating” business model. Even with the best research, accept that not all will be winners, after all, until you do the exploration thoroughly, usually costing millions of risk capitol, you don’t know what is really there to profitably exploit.
Here are the rules I personally operate by for my own portfolio, you are of course free to modify these to suit your own personality, risk tolerance, portfolio size and specific interests.
1) Part of risk management is never to invest more than 2% to 5% of capital in any one stock, lower end for options.
2) I give each stock a minimum of 6 months to pay off, (even if it drops after purchase due to market sentiment) providing there is no change in the fundamentals of the company. That does not mean these are all “Buy and Hold” stocks for a long period, until a mine development decision is made. What it means is, you need to know what stage of development your proposed investment is in, when to take profits, and when the stock is likely to be “dead money” for a time. Every stock I invest in has to have high promise of at least DOUBLING in a 6 to 18 month time frame, and I may sell out on a nice profit and re-enter on a later good buy point.
Here is a real life example of a company currently in my portfolio which illustrates the multiple potential buy and sell points of a stock that may still be years away from mine development.
Once you have invested in a stock I highly recommend you get on their E-mail update list usually found on their website so that you get every piece of news that can affect your stock.
Anatomy of a Yukon Discovery: Kaminak’s Coffee Discovery
July 7, 2009: Kaminak commences trenching program. Share price: $0.37
Aug. 13, 2009: Kaminak reports 2.3 g/t gold over 21 meters. Share price: $0.43
Oct. 27, 2009: Kaminak reports high-grade trenching results of 11.72 g/t over 10 meters. share price .50! reason to subscribe and pay attention to press releases.
May 3, 2010: Kaminak begins drilling Coffee gold project: Share price: $0.73
May 26, 2010: Kaminak drills new Yukon gold discovery: Share price: $1.32
July 12, 2010: Kaminak raises $10 million: Share price: $1.70
Sept. 7, 2010: Kaminak identified five new gold-bearing zones: Share price: $3.59
Note that this shows a steady progression based on the companies reported “news” but does not take into account “market sentiment” that changed this year and saw virtually ALL mining shares being sold down along with the general market.
My point is that the inherent VALUE of the companies resources has not changed, just probably TEMPORARY market sentiment and those resources will be revalued in the future as the precious metal market DEMAND accelerates, so “buying on dips” will favour the bold investor who follows the market TREND, not the day to day oscillations.
I bought Kaminak in Dec.10/11 on a pullback @ $2.79 and by July 7th/11 the price was @ $4.39, and by the 26th reached a intraday high of $4.69, so IF I had exercised my plan of using stink bids on July 7th, adding .30 to my ask price, I would have been out at $4.69 with a $1.90 PROFIT per share or about 70% profit over about 7 months. But here is the best part, by Aug. 8th, less than a month later, using another stink bid on the buy side, I could have gotten filled as low as $3.25 for another run higher based simply on market gyrations as opposed to any company fundamentals.
While nobody will be successful in timing the markets perfectly, or identify every potential takeover target, this is an object lesson on WHY it pays to take profits when you have them rather than using a buy and hold strategy even on good stocks. Rarely does a stock go straight up or straight down, there will always be buy points and sell points and being disciplined in exercising them is how you make the most money.
3) My stated goal is to sell 1/3rd of my holding on reaching a 50% profit and another 1/3rd on achieving a DOUBLE and if I have HIGH confidence in the 3 prime factors I originally based my BUY decision on, will hold the balance of free trading shares as long as the market is positive. Nobody has a crystal ball to know what the market will do on any given day, week month or year, so you must constantly balance market trends and sentiment with fundamentals of the individual companies you are invested in.
4) Junior miners can be very VOLATILE, and while a drop of say 25% may raise enough concern to revisit the fundamentals, a temporary market swoon is no reason to sell out in a panic, providing you did your due diligence in the first place! You need to have developed full confidence in managements direction and ability to execute their plan, then those fundamentals should overrule temporary market hiccups.
5) The objective is to buy low and sell high, so it is important to monitor investor sentiment and not let others fear or greed overrule YOUR long term objectives with a given stock. I have had stocks drop 50% after I bought them and still end up DOUBLING within a year. Always keep in mind that you lock in a profit or a loss ONLY when you SELL, what you don’t want to do is “follow the herd” over the cliff by chasing a stock higher, and/or selling on market down days.
6) All stocks are cyclical, and usually PATIENCE will be rewarded, so be DISCIPLINED. When you have identified a stock you would like to own, decide what dollar amount you want to allocate to that investment and divide it into two or even 3 purchases with “stink bids” to get the lowest price, taking advantage of dollar cost averaging. If you become disenchanted with a specific stock that is not meeting your objectives, exercise the same discipline in your selling strategy. STINK BIDS work on the sell side as well. I constantly have half a dozen or more stink bids in on stocks approaching my profit taking levels, with 2 week, 10% above the bid price offers, to take advantage of intra day highs, so I do not have to constantly monitor the prices.
7) In summary, following my disciplined program means you position yourself to consistently make 50% to at least TRIPLES, and enough ten baggers to offset the few losers or lower profit stocks you dump at the best price you can get. Previous success is not a guarantee of equal future results but having a program and sticking to it certainly increases your chances. The execution is entirely YOUR responsibility, which is why you need to READ and AGREE with the following disclaimer before acting on any information presented on my website from time to time.
Myron Martin via his website www.myronswinning juniors.com is offering ideas for your consideration and education based on his personal research. Myron Martin is not offering personal financial advice and is not, nor purporting to be, a financial or investment advisor.
Myron Martin as A FELLOW INVESTOR AND TRADER is SHARING HIS THOUGHTS for educational purposes only. While every effort is made to present information from sources believed to be reliable, including companies own websites and press releases, unintentional mistakes and errors are always possible, making your personal due diligence imperative.
By accessing the website www.myronswinningjuniors.com you specifically agree that any action you may take as a result of reading the information presented from time to time is solely at your discretion and responsibility and will not hold Myron Martin or www.myronswinningjuniors.com in any way responsible for any investment decisions you may make for your own personal account.
Before considering any purchase decision on stocks Myron Martin is profiling/trading, it is imperative that you personally do your own due diligence, and/or get professional investment advice from a qualified financial advisor.
STAY TUNED, BE PATIENT and STAY DISCIPLINED and PROFITS BEYOND YOUR WILDEST DREAMS WILL COME NO MATTER HOW LOUSY THE ECONOMY AS A WHOLE, THERE IS ALWAYS A BULL MARKET SOMEWHERE!
MY BEST TO YOU, MYRON