Have you ever listened to a financial expert talk about the importance of buying low and selling high? They usually elude to it with illustrations like purchasing when there’s blood in the streets, or going against the grain. It’s easy to get behind these guys because you want to picture yourself actively outsmarting the consensus and therefore, making a great deal of money.
Well here’s another catch-phrase that applies to this concept which is, “hindsight is 20/20.” Looking back, you can always picture yourself making the right decision after the facts, and you tell yourself, I’ll be ready for this the next time it happens.
I wanted to point out a sector that is currently an extreme value opportunity, yet people are scared to death of it. I don’t blame anyone for this because the reality is, investing in this specific sector has been a rough road. Looking at a chart that is down anywhere from 50-75% can be a bit brutal when allocating new money not knowing what exactly will happen tomorrow.
Precious Metals and the Mining Sector
Today, as I’m writing, gold is hitting $1,250 and silver is dipping below $19 per ounce. Is it possible for us to picture the future and attempt to have some insight based on solid principles that we all want to believe we hold true?
The longer I invest, the more I appreciate extended periods of lower prices. The fact of the matter is, it’s difficult to act immediately on every opportunity, no matter who you are. This extended depression that we are seeing in the precious metals and mining sector, is really going to be a blessing for those who are buying at the right prices.
Precious metals and mining stocks have taken pretty hard hits over the last two days. The enthusiasm that we saw at the beginning of the year in the junior mining sector has been dwindling and retail investors are getting impatient. When retail investors get impatient, people sell and they take their money off of the table. As these people get flushed out, and new buyers come in, a new bottom is then formed. This is the reason why this bull market is not going to recover straight up immediately, but slowly with higher highs and higher lows than what we saw in 2013 which will likely prove to be the bottom “in hindsight” years down the line.
When I see these prices dip, I get very antsy. As a matter of fact, as I wrote this email, I purchased shares of mining stocks of some of my favorite companies. Be sure to read the email we sent out on Monday for one of our favorite mining stocks at the moment, or just email me at kenneth@crushthestreet.com and I’d be happy to share with you some of my top plays that I’m buying right now.
I say all of this to just point out to everyone that here is an opportunity that can be life changing if played correctly. So many people are scared to death of acting in the way that seems so logical, yet still sitting on the sidelines. The time needed for this sector to recover is unknown. Being patient and sticking the trade will be crucial in getting the glory in the end. There will come a time where the momentum floods back into the sector and the big money will be made. The key will be being in the right stocks, and not trading emotionally when prices move up and down.
Prosperous Regards,
Kenneth Ameduri
Chief Editor at CrushTheStreet.com