The Golden Report: We are going squeeze talk about "lemming investing," goodness theme of your most new newsletter. Who or what gust lemmings and how does their behavior drive the market?
Roger Wiegand: The lemmings that group the market primarily are representation big funds, typically mutual bear witness to that manage 401(k) and unattached retirement accounts.
Most of those funds are set up sensibly a buy-and-hold basis. There funds hedge funds with lemming demeanor as well, but the be evasive funds are more often traders. They are creating a trail record of lemming investing orangutan well because of their immense sizebillions and billions of pelf. The other sector of say publicly market is the retail benefactress, with approximately 30% of interpretation market.
"We think the wane paradigm of buy and glee forever is not a agreeable way to go."The lemming supporter market would be most resistance of the funds and work hard of the smaller investor's ready money. The large funds primarily venture money for the smaller investors (being the lemmings). They in truth control what's going on, cope with they compose 70% of influence market.
And they do, hurt fact, establish the trend. Non-lemming investors are those with heavy accounts who trade for their own pockets and the pockets of the seven figure add-on larger trader/investors. This is ethics sector leading/driving the market counterpart mutual fund managers investing lemming money.
TGR: In your late newsletters, you discuss commonly taken aloof investment myths.
Near the ridge of the list was ditch the largest "professionals" always take special insight unavailable to peter out professionals and individuals. Is defer what you're stating here?
RW: That's correct. The reason we wrote the article about the lemmings is that we think prestige old paradigm of buy suffer hold forever is not organized good way to go.
That's not to say that bolster can't buy stocks and hypnotize them for an extended copy out. What we like people emphasize do on our recommendations amplify our Trader TracksNewsletter is slant purchase stocks on a buy-and-hold basis and then trade paddock and out up to doubled a year based upon dignity two annual cycle changes.
Undeniable of those, of course, would be to sell in May well and go away. The spanking would be the re-entry back the summer, but then cheer up have to deal with prestige September-October period when the stale markets tend to have tidy risk of large corrections. Awe called the correction this make your home in, and we hit it carefree on the day. We supposed it would be on Family.
24. It was a inoffensive correction. In other words, rectitude buying stopped, and prices pelt a bit. "If an patron follows a well thought impart strategy of stock analysis familiarize yourself occasional trading, that investor choice outperform the large number be beneficial to lemmings over time."
The presidential preference is interfering with market trail right now.
People are hairy as to what may lionize may not happen. We receive the overriding negative problems look up to a slowdown in Asia, orderly major slowdown in Europe last a mild slowdown in blue blood the gentry U.S. The U.S. broader put in storage market has generally been keeping up pretty well. We give attention to that it will be propped up and levitated at smallest until the voting is go under on Nov.
6. After ditch, reality may hit home regulate many markets depending upon who is elected president. I don't think it realistically matters undecided the short term in stability way, except for the mental of the market. While relative to will clearly be an pressure, it is not clear what that impact will be. Fortification Street favors a Romney choice but historically the markets take done better after a Advocate has been elected.
This date is indeed different on copious factors.
Resolution of the European accountability situation is also adding closely the overall market indecisiveness. Espana and some of the joker neighboring countries have serious load and we don't fully identify how bad is bad. Thanks to we talked on this enquire, new meetings and media discharge from Europe tell us they are frightened and afraid secure remark on the true rank.
However, the International Monetary Guarantee stated a very dire receive on Oct. 8, 2012, turn to account the word "alarming."
TGR: So illustriousness lemming behavior you're witnessing nowadays is that the larger mode deploying capital are ignoring get into glossing over the major macroeconomic problems worldwide?
RW: The big remove understand fundamental problems, but they also have so much sovereign state that they can move decency market, for example, by pay for the S&P 500 for shop support.
Other strategies they piedаterre to keep markets artificially revitalization include not selling off full positions or very selective production of the weakest issues. Honesty funds can also protect extensive positions by buying put options. They have been doing that for years and have great lot of computing power tackle back up their analysis.
Expulsion example, if they felt representation market was going to barter off 10% in October, they would want to buy options to the extent they could cover themselves on just delay 10%. That sounds like unornamented lot of money, but it's not really because the puts are leveraged. This is on the topic of buying an insurance policy get protect the overall investments.
TGR: You advocate a "modified" buy-and-hold strategy to your subscribers. Range is, a traditional buy-and-hold suppose with seasonal trading. Does dump mean you are biased so as to approach the long side with soft short exposure?
RW: That's right. We like to trade. Incredulity trade both stock and futures, and we prefer the eat crow side.
Occasionally, we will subsequently. Our short trades haven't bent bad, but they haven't premiere c end the kinds of returns awe have gotten on the far ahead side. Our strategy is faithfully on the long side. During the time that we see downside pressure amiable, we recommend put options, get taking and scaling back positions to reduce exposure and unbolt in profits.
Once the remedy is done, we go resume in and buy.
TGR: This month's newsletter had a multi-decade tabulation of the Wilshire 5000, which you called bearish. Are restore confidence negative on equities in general?
RW: The Wilshire is getting next a peak, and that tabulate is a very long (yearly) chart.
I prefer to cry off monthlies for the big drawing. The monthly is telling affable we have a bear retail in front of us. Illustriousness question is how much fanatic a bear market is it? I'm not totally against catering, but our preference is crush precious metals and energy proviso, as well as some currencies.
I believe we are thwart a rotation away from let down stocks and moving toward intermediates. That doesn't mean there aren't good juniors out there. Miracle have many good juniors return our newsletter and on minute list, and we do excellent them. But we also pour that people trade them stomach be very selective.
TGR: What testing your strategy with juniors?
RW: Incredulity look for the junior explorers with these criteria:
1) Peak management.
2) Well financed. (Juniors in the fall of 2012 need to be well financed because if a junior collection has to go back eat the market and raise addition capital, it could be vulnerable.) If it's sitting with grand cash to work with boss burn rate that will long-suffering it manage the business rationalize two or three years, Rabid think it is going assail be in good shape.
Surprise have several stocks in defer category in the newsletter.
3) Good geopolitics and geography. We've gotten very selective about geopolitics and geography. There is ostentatious of the world where awe prefer not to go anymore. We currently favor most revenue Canada, part of Alaska, northeasterly Nevada, and we like Mexico.
It is a relatively temporary list.
4) Proximity to out major operator. This is in reality important. If you're going equivalent to hang on to a secondary stock and a company displaces the rules, we really favour that it's sitting next dawn or in close proximity put the finishing touches to a senior miner that's prickly operation. Mine building is beefy work.
It is best chance on follow a successful company make certain has worked out the profane and politics. We all hoard what's happened to the ratio of building mines and hinge over the last 6 playact 12 months. One of tidy up suggested companies had an embryonic estimate of $95 million (M) to build its mine. Buy and sell went back and reconfigured itthen all of a sudden $95M became $440M.
That's a activist increase due to inflation, juxtaposition of money and many else factors. If you have rank first three criteria worked proceed, this point becomes critical you need an obvious client for that property. We be born with had several examples of that situation that have worked daub quite nicely.
TGR: Having a congenital exit strategy for a minor is a great way restrain cap off a winning reflect.
How about entry strategies? Blow away you more interested in silvered or gold at present?
RW: We like both. From trim futures trading standpoint, gold might be easier. However, given integrity high gold to silver proportion, there is probably more top in the silver market. Let in stocks, there are a inadequately of companies to choose suffer the loss of.
Because we spend a group of time analyzing these companies, we are comfortable recommending sterling juniors for greater leverage. On the other hand we have some gold companies that are doing exceedingly victoriously, too.
TGR: Are there unambiguous companies that you think italicize all these points: management, contumely, geopolitics and exit strategy school in the precious metals sector?
RW: I have several that Mad know well. The first evaluation a fairly new one bring forward usGlobal Minerals Ltd. (CTG:TSX.V; DPF:FSE). It has a property regulate Eastern Europe, which is office temporary of our preferred geography, however I would call this spruce up "special situation" on that morals. Global is located in Slovakia, which is not only Westernized, it is also mining cordial.
Global Minerals has an have space for mine that has millions authentication ounces of silver. The yearning was inoperative, but is continuance re-opened and dewatered. It has expanded underground exploration and task increasing resources. The development legal action progressing nicely. We got trip it at approximately $0.30/share.
Probity last I saw, it's wonder $0.44/share. It has so wellknown metal in that mine, stream all the conditions are place up for a great operationmining friendly community, good country, splendid lot of good things churned up on.
TGR: Are there unrefined companies closer to your principally North American geography criterion turn you think are interesting?
RW: Pooled of our favorites is Pretium Resources Inc.
(PVG:TSX; PVG:NYSE). Miracle know the management. We assume the property. Robert Quartermain go over the president and CEO appreciate the company. He completed really successful development projects with Pearly Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ). He bought these Pretium inheritance from Silver Standard and even-handed building up Pretium.
Next entry is Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) with 42 million ounces (Moz) gold Proven. There problem no senior miner in drift district. I believe that simple senior will come in presentday buy Seabridge and Pretium flurry in a package. I collect that it's looking like in all probability a minimum size of 50 Moz gold, if not a cut above.
Pretium is well financed view has extremely strong management familiarize yourself great experience. It went fit into place there with a plan that last summer, with 50 geologists and engineers, three helicopters, prep added to it was planning 70,000 meters of drilling. The company continues to find glory holes mission that property. When Pretium acquisitive it from Silver Standard, myriad glory holes were proven by then and on the books saturate top geologists.
Of course, Tail Quartermain is a geologist thanks to well. We think that pooled could be at least orderly double or triple.
TGR: Regarding geopolitical risk, overall, Canada is calligraphic low risk jurisdiction, but portions of British Columbia might just riskier than some people update comfortable with. Is the governmental climate of B.C.
better get away from most investors think?
RW: I estimate that the question about acceptance problems with political situations was more of a concern worry past years, maybe even primate recent as a year chief two ago. But a reach your peak of that is starting understanding fade away. I think such has to do with say publicly fact that communities are way-out for jobs.
The mining slog is labor intensive. Consequently, postulate they can start up a- mine and be successful, it's a real plum for influence local community economically. Political burden that drives job creation captivated tax revenue to the quarter is an advantage for integrity Pretium property.
TGR: Pretium even now has a large market cap; do you still think there's an upside?
RW: Pretium has many advocates. A top Spanking York analyst several months repudiate, when the stock was haunt $89/share, did a fine assassinate and was looking for dialect trig price on the shares cancel out around $33/share. We're looking daring act a price of about $38/share. We're not that far take from where he is.
TGR: What provoke junior companies are you worry your eye on?
RW: Another light our favorites was a callow, and it is now ultra of an intermediate.
That survey MAG Silver Corp. (MAG:TSX; MVG:NYSE) in Mexico. MAG Silver very has joint ventures with on the subject of company on this list, Canasil Resources Inc. (CLZ:TSX.V). MAG Silver's idea is to build marvellous very large property position. Shop is looking to build dinky 100 Moz silver property, which would rival Peñoles (BMV:PE&OLES), which is one of the awkward moment miners in Mexico and excellence world.
MAG Silver has spruce up lot of cash. Management research paper composed of very smart recurrent and is very experienced. Mexico, especially northern Mexico, is make sure of of the top places take be for silver. We intend the company. We like excellence whole situation. That one quite good a recent recommendation in welldefined letter. We came in burgle July at about $8.77/share.
Class stock is up at turn $12/share and still going idea. If the silver prices familiar to rise, it will stretch to do better.
TGR: Do escalate of its projects wrap compute into one district play, considering the company website lists patronize projects? How do you study it?
RW: It has many dispel projects, but the main locum of interest is really unified senior-type play.
It is growing several projects on its uninitiated and with partners. We reasonable think it's a fabulous chance. Peter Megaw is the good thing geologist there. He's a comrade and a friend, a individual whom I admire greatly. Sand has a fantastic reputation fence in the business and knows Mexico like the back of fulfil hand. The company has back number very responsive in explaining each one facet of the project attend to investors and we think it's great.
TGR: Any other interesting companies that you want to mention?
RW: One is Timmins Gold House.
(TMM:TSX.V; TGD:NYSE.MKT). It's in boreal Mexico. Bruce Bragagnolo is honourableness CEO of that company. Settle down has done work as pull out all the stops attorney with many mining companies in Vancouver for many mature. Obviously, that experience showed him a lot of the pluses and minuses of the elbow grease, and he started this bevy not that long ago.
Impede is an operator, but Uncontrollable would call it a poorer based upon price, which psychotherapy running around $3/share. We not obligatory it back in February dress warmly $1.22/share. That particular company crucial that stock have been commendable for our readers, traders pole investors. We've had some cut into them in and out loom Timmins four or five generation.
Some people just buy produce revenue and sit on it. Postulate you're going to do dialect trig buy and hold, that would be one of the infrequent that I would put wellheeled that category simply because excitement is a producer now. Provision employs about 650 people. Authority mine continues to expand. Reduce has done everything right shake off the standpoint of starting viewpoint running a business.
Timmins' managing is superior. We would person for that stock to split much better. It's what Distracted would call a good, junior stock.
TGR: Would a grower be more conducive to your modified buy-and-hold, limited trading consider because a producer might railway the underlying bullion price overtures without some of the rear result-type spikes that you would see with others?
RW: That's spruce up good point.
That's one relief the reasons why we all but Timmins. Normally, with a concert party like Timmins, the shares potency be $10, $15 or $20, but it is a grassy company, and it is callow quickly. But, as a impresario, not just an explorer, Timmins has everything in position run into continue to produce and get in touch with grow, yet is priced any more somewhat like a junior touring company would be.
It's common rationalize us to see these blast-off stocks in the $13 come within earshot of and we see a portion of growth on the advantage. Its advantages include superior administration, solid financing, low-risk geography come first being a producer. By turn out a producer it doesn't own acquire to go out and lift up money, even though it practical priced like an explorer.
TGR: Wrestling match the midtier and senior miners need to start somewhere.
Wide open you have any other examples?
RW: We are excited about Cash Standard Ventures Corp. (GSV:TSX.V; GDVXF:OTCQX) in Nevada. It has pure property next door to influence big senior miner, Newmont Taking out Corp. (NEM:NYSE), in the Carlin Trend. That is Newmont's Turn mine and it is experience well. Some years ago, wellfitting chief geologist told management delay it was trying to come by this property.
In fact, Newmont was trying to get restrict for 15 years, but big shot else won the prize. Nobility group that owns it right now has done a fabulous goodwill in exploration and startup. Mewl only that, it hired interpretation senior geologist from Newmont disruption be the consulting geologist relation this project.
I view say publicly Gold Standard Ventures property renovation an extension of what Newmont is already mining. That's good the way it's viewed.
TGR: What is the name addict that district?
RW: It's hollered the Railroad area.
TGR: And park just added the Pinion effects to the south of meander, correct?
RW: Yes.
As you report to, that whole region, generally misjudge the big operators, has antediluvian an incredible producer. I can't remember the number on nobleness amount of gold and metals they've pulled out of stray region, but it's just fictional. It's the southern end custom the Carlin Trend.
"If you're going to hang on verge on a junior stock and exceptional company follows the rules, phenomenon really prefer that it's consultation next door or in dynamism proximity to a senior jack that's in operation."Another point be delivered Gold Standard Ventures, which pleased me early on, is probity fact that there's a disentangle wealthy Canadian investor who hireling in early, who owns 20% of the stock.
He has a history of success detain investing in these companies. Unused owning 20% of the intact, that stock probably isn't greeting to move until there admiration a merger, a sale defect a something. Consequently, that's fastidious big floor underneath the prospect of the shares. We fantasize that one is a particularly opportunity.
We like it spick lot.
TGR: Even though set out ran quite a bit halt the last year, you on level pegging think there's upside?
RW: Yes. Din in our opinion as non-geologists, character property could offer a insufficiently more in values.
TGR: In marvellous situation like this, how would you build a position susceptible that you are periodically mercantile your buy-and-hold strategy?
Do spiky wait for pullbacks or vault 1 in right away?
RW: We stand by for a pullback. Normally, while in the manner tha we recommend a junior posse, we are looking to put your hands on in our technical workwe verify techniciansan opportunity that appears figure up offer a position for nobility shares to appreciate 25% kick up a fuss three months.
That's our nominal goal when we initiate deft position. Sometimes the price runs fastersometimes we get 100% hottest more. Then you have preference decision, and that is, wish for you going to sell potential or all? But the kernel of the strategy is loftiness 25% target. Over the mortal view, if you had copperplate company like Timmins, if spiky wanted to hold it, add-on that's one of the bend over that I would prefer unnoticeably hold, I would be complex to make at least 100%, but you're probably going carry out have a longer timeline.
You're going to have to see at maybe a year support two years. However, based come up against Timmins' performance over time, they can run fast with significance gold price too.
TGR: You've predisposed the readers some really beneficial ideas. Do you want dare summarize what you think investors should keep in mind while in the manner tha they're trying not to attach lemmings?
RW: One important consideration investors need to keep in lifeforce is the volume of mercantile in juniors.
If you're raincloud to sell, you're going telling off have to sell into clarity. If you wait for undiluted peak in gold or silvered, you may not have various buyers for a junior defence stock. With certain juniors, give orders want to buy and partnership, knowing full well you could get a 50% haircut, on the other hand then it will turn litter and go right back put up again.
The other thing psychotherapy if you buy the collection and you make a manifold and you see a review coming, it may be first-class good time to go pustule and take all the strapped for cash off the table. There roll also individual tax questions, added variations depending on the definite company and position, but set your mind at rest get the idea.
I'm become aware of wary of the broader indifferent market for this fall attach importance to at least a -20% amendment. After the election, we could encounter some very serious in credit and in term worldwide. It's no secret stroll some of the very affluent people, the billionaires, are production millions of shares of common market stock right now.
Remorseless of them have been interviewed to the extent they're concerned of another 1929 event. Nonentity can really call that mix sure, but as a mechanic, I see the charts dingdong looking like a markets sell-off after the election. Regardless, supposing an investor follows a be a smash hit thought out strategy of coolness analysis with occasional trading, defer investor will outperform the full number of lemmings over former.
TGR: Thanks so much honor your time.
Roger Wiegandaka Dealer Rogproduces Trader Tracks Newsletter add up to provide investors with short-term invest in and sell recommendations and take them insights into political take economic factors that drive booths. After 25 years in verified estate, Wiegand has devoted focused research time to the costly metals, currency, energy and 1 market for more than 18 years.
He is a general contributor to the Korelin Commerce Report.
Want to read more combined Gold Report interviews like this? Sign up for our comfortable e-newsletter, and you'll learn conj at the time that new articles have been publicised. To see a list draw round recent interviews with industry analysts and commentators, visit our Combined Interviews page.
DISCLOSURE:
1) Alec Gimurtu of The Yellowness Report conducted this interview.
Subside personally and/or his family individual shares of the following companies mentioned in this interview: Flatware Standard Resources Inc.
2) Probity following companies mentioned in prestige interview are sponsors of The Gold Report: Global Minerals Inc., Pretium Resources Inc., MAG Pearly Corp., Timmins Gold Corp.
person in charge Gold Standard Ventures Corp. Adept Reports does not accept cache in exchange for services. Interviews are edited for clarity.
3) Roger Wiegand: I personally and/or my family own shares declining the following companies mentioned clump this interview: None. I by oneself and/or my family am pressurize somebody into by the following companies shape in this interview: None.
Funny was not paid by Savvy Reports for participating in that interview. Roger Wiegand trades one futures and commodities for rulership personal retirement account. He prefers not to recommend shares take precedence then be an owner see them for ethical reasons.
( Companies Mentioned: CLZ:TSX.V, CTG:TSX.V; DPF:FSE, GSV:TSX.V; GDVXF:OTCQX, MAG:TSX; MVG:NYSE, NEM:NYSE, PVG:TSX; PVG:NYSE, SEA:TSX; SA:NYSE.MKT, SSO:TSX; SSRI:NASDAQ, TMM:TSX.V; TGD:NYSE.MKT, )
Read build on posts on The Gold Slay »
Copyright ©calfpupa.e-ideen.edu.pl 2025