Gold and Silver Mining Companies Could Really Be Worth the Investment
While at the 2017 Gold and Silver Summit in San Francisco, hosted by Cambridge House International and Katusa Research, investors’ eagerness to know more about Bitcoin was certainly interesting to watch. Nevertheless, my conviction that mining shares could be the next millionaire maker got much stronger.
What do I mean by this?
I have said many times in these pages that the greatest opportunities are born in times of the most uncertainty. The most ignored and disliked assets usually generate massive returns.
You don’t really have to go far back to see this. In 2009, stocks in general were a hated “thing.” I perfectly remember gurus calling for the Dow Jones Industrial Average (DJIA) to hit 2,500. At that time, if investors bought stocks, they would have created significant amounts of wealth by now.
Gold and silver mining companies are struggling, and they are ignored. Remember, if you listen to the management of mining companies, they will always pitch an optimistic story. Look at the numbers, though. Look at what they are doing.
One sign of their struggles that I saw at the summit: fewer freebies. As I have said before, I go to these sorts of conferences often. Until few years back, in order to lure investors to their booths, mining companies would hand out “free stuff.” They would give out precious metals (through prize draws), stationary, chocolates, reusable grocery bags, and the list goes on.
It sounds almost comical. At this year’s summit, if I counted correctly, there was just one company that was doing a draw to win a silver bar, and there were very rare stationary giveaways. Even the fact sheets (brochures with company information on it), were printed on thinner and less expensive paper.
Mining Stocks Could Double, Triple Or More?
I question whether mining companies are becoming stringent about their cash overall. To me, that would a good sign. It shows that there’s light at the end of the tunnel. Mining companies are starting to realize that they will have to take strong measures to remain in the business for the long run.
Mining companies are also severely ignored by investors. I can’t stress enough the Bitcoin conundrum at this year’s summit. It was hands down one of greatest examples I have seen in the last year. At a gold and silver conference, investors wanted to talk about Bitcoin. If this isn’t a sign that precious metals are being ignored, I don’t know what is.
As this is all happening, don’t forget, the fundamentals of the gold and silver markets continue to get better.
Here’s my conviction: this time around, you won’t need precious metal prices to soar significantly for some mining stocks to double or triple. A 20% to 30% rise in prices could do the job. Mining companies learned the lesson. They are much more lean now than they were back in 2011.
Let me also make it very clear: it won’t be every mining company experiencing massive upside, only those that have taken time to improve their operations, have cash on hand, and are thinking long-term.