If History Repeats in Gold Miners
Thursday, 6/04/2015 11:21
...then you could expect to make big money on average, huge gains on the best...
WE MEASURED every bull cycle of gold mining stocks and found there have been eight distinct upcycles since 1975,
writes Jeff Clark at Casey Research here.
We also discovered something exciting: Only one was less than a double. (A second was 99.9%.)
Even more enticing is that the biggest one – a 601.5% advance in the early 2000s – occurred just after a prolonged bear market.
And our current bear market is longer than that one.
To get a sense for the potential upside, we applied the percentage gain from each of those upcycles to our recommended BIG GOLD picks.
We can't show you our entire portfolio out of fairness to paying subscribers. But look what those gains would mean to GDX, the Gold Miners ETF (based on the June 1 price).
Keep two things in mind about this table:
- The percentage gain from each past bull market is calculated using an index. The stronger companies will perform better than a static ETF.
- It's not unreasonable to think that the gains in the next bull market will be similar to some of the higher returns listed above. That's because stocks will be rising from the depths of one of the more severe bear markets.
Here's what the price for popular royalty company Royal Gold would look like if it matched past bull markets.
You might think royalty stocks won't show similar gains going forward. It's true they've already performed well. However, it's more likely they'll be wildly popular than anything else. That's partly because there are only a few of them in this industry.
Now take a look at the prices our top silver pick would hit.
If silver rises along with gold in the next bull market – something we think is extremely likely – this small niche market will absolutely soar.
No other sector is as depressed as the mining sector. A return to anything close to some of the stronger past bull markets will hand us tremendous gains.
The
June issue of Big Gold focuses on the top silver pick listed in the table. I'm convinced it will at least triple from current levels in the next precious metals bull market.
We have two very specific reasons why it will do so. And these two factors are unmatched by almost any other mid-tier or major producer.
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