Investors the world over are constantly evaluating the leverage, risk and potential rewards of their investment decisions. Whether you are an individual investor or an analyst for a large mutual fund, leverage, risk and the pot of gold at the end of the rainbow are always factors to be considered.
We realize investors are currently concerned about whether the “Sell in May and go away” factor will occur again this year. Sure feels different this time, doesn’t it? We will leave this subject to others and of course the markets will be telling us soon as May is upon us. For us, as we continue to find values in the markets we add them to our portfolio and/or increase current positions. Our view is that we are ‘building inventory’, an inventory of shares and warrants to be sold at some point in the future. Will there be corrections along the way? Sure, but we will take the opportunities that the markets give us and do not believe in chasing anything.
Back to Basics:
With few exceptions, most of us writing and those reading the articles on these gold oriented websites are bullish on the precious metals, right? So, let’s look at a few very simple ideas on the use of leverage and risk. I’d like to first say, we do not personally use nor do we suggest that an investor use margin accounts. The markets can be quite volatile at times and we do not wish to be thrown off of this bull market by a margin call.
If an investors basic beliefs are that gold will say, double from current levels for a 100% gain, are there other ways to invest other than an outright purchase of gold bullion? Sure, gold coins and the gold ETF must mimic the price of gold.
But what if we wanted to utilize some leverage in an attempt to increase our investment gains? Below is a list of investment alternatives of which each takes on additional level of risk and leverage to the price of gold.
Gold Shares -- Producers
Gold Shares -- Junior Mining companies
Gold Shares -- Exploration companies
Investors interested in the precious metals but yet seeking greater safety will stick with the large producing mining companies. At the opposite end of the spectrum will be those investors looking to make a killing by investing in the shares of the exploration companies of which we seem to have an endless supply.
It is commonly known, that gold shares over time will outperform the increase in the price of gold, so investors as a general rule, are looking to own gold shares as their investment of choice. Each investor depending on their level of risk tolerance and their individual beliefs in the strength of this bull market must factor this into their investment philosophy.
Warrants & Leaps:
Investors looking for even more leverage may wish to consider the use long-term warrants and even Leaps in their investment decisions. If one or more of your favorite mining shares has Leaps or long-term warrants trading, why should you not consider them? There is absolutely no reason not to consider them.
Dudley Baker is the owner/editor of Precious Metals Warrants http://www.preciousmetalswarrants.com a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders.
expert: Dudley Baker
Wednesday, October 31, 2007
Gold Uses in Industry
A knowledge of the commercial uses of gold enables a savvy investor to make a judgement on the future demand for the metal and in conjunction with other criteria such as the erosion of the purchasing power of a currency, political factors, gold hoarding or selling off by governments, the technical picture, etc.etc., can make the decision to be long, short or stay out of the market until a more favorable opportunity occurs.
Basic Information
Chemical Symbol: Au
Atomic Number: 79
Melting Point: 1947.97 Degrees Fahrenheit, 1064.43 Degrees Centigrade
Medicine
Gold is non toxic and biologically benign, an excellent conductor of electricity, virtually indestructible, easy to shape and flatten and can be drawn out into microscopically thin strands known as bonding wire.
The most well known use of gold in medicine is in dentistry. The metal is combined with other metals such as platinum, silver, copper zinc or palladium to produce non-toxic, chemically inert alloys that are easy for dentists to work with and are strong and lasting.
The current demand for gold in dentistry is about 60 tonnes annually having recovered from a decline to circa 48 tonnes in 1987.
Rapid and ongoing developments in the use of lasers incorporating gold coatings are making dramatic progress in the treatment of cancers, sealing battlefield wounds in the field, emergency injury treatments in hospitals and previously inoperable heart conditions and tumors.
Lasers reliant on gold are used in delicate eye and brain surgery where absolute accuracy is essential.
Another recent development is the use of gold-coated lasers in the rejuvenation of burnt or damaged skin tissue leaving adjacent healthy tissue unaffected.
Gold helps in the treatment of prostate cancer and some other cancers and is used in surgical instruments to clear clogged arteries.
It is used in an eye surgery procedure to correct a condition, known as Lagophthalmos, where eyelids cannot be fully closed. By surgically implanting gold into the upper lids the gravity effect of its weight allows the lids to close when the muscles relax.
Computerized wheelchairs enable the handicapped to have more control over their movements.
The controls and the computer are linked by gold wire (bonding wire) and gold-coated pads that are both resistant to corrosion and have high electrical conductivity.
As these power wheelchairs are used outdoors and often exposed to extremes of temperature and weather, the use of gold in essential components is necessary to minimize breakdowns and the possible life threatening consequences.
Hi-Tech Electronics
Gold plays an essential part in every one of the millions of computers and peripherals that are produced worldwide every year. Gold is refined to 99.999 % pure and is drawn out to a wire only one hundredth of a millimetre in diameter.
This bonding wire is used to connect the semi-conductors and circuits. It is used on circuit boards and to make the contacts when using the keyboard.
The printed circuit boards in computer games have gold circuitry and gold plated contacts are used in the plugs to ensure trouble free contacts. Washing machines, dishwashers and even the humble pocket calculator need gold to operate reliably and efficiently.
Telecommunications
In every telephone mouthpiece there is a transmitter that uses gold in its diaphragm. The metal is used for its dependability in the variety of conditions that are likely to be encountered.
Throughout the telephone systems of the world gold is used to plate billions of contacts for phone jacks and connecting cords because of its' signal reliability and that it will not corrode or otherwise deteriorate.
TVs, VCRs and DVD Players
The circuits are connected by fine lines of gold to the micro-electronic circuit chips that change the incoming signals into a TV picture and sound.
Space
As the exploration of space continues so more and more uses for gold are being developed. Silicon wafers containing gold wafers protect on board computers in spacecraft from bombardment by heavy ions in space and allows monitoring and adjustments of the computers by ground control.
State of the art sophisticated and intricate gold circuitry allowed color pictures and chemical analysis of the surface of Mars to be transmitted back to earth.
The tonnage of gold used annually in the electronics industry amounts to approximately 150 tonnes with Japan being the major electronics manufacturer and accounting for over 45% of gold consumption, followed by The US with circa 30%.
The ever increasing speed of advances in technology suggests that even more uses will be found for the unique properties of gold and the consequential increase in consumption by the industrial sector alone.
Gold as a store of value and gold in jewellery and other adornments are subjects that warrant their own special informative articles on this site.
When deciding whether or not to play the precious metals markets, gold has, without doubt, the most complex of considerations to evaluate but also can be by far the most rewarding to both the informed long term investor and the short term speculator.
http://preciousmetalinvestment.com is the brainchild of Jaks Lloyds' husband John. He has been involved in the financial sector for many years and has a great deal of investment knowledge to offer.
expert: Jaks Lloyd
Basic Information
Chemical Symbol: Au
Atomic Number: 79
Melting Point: 1947.97 Degrees Fahrenheit, 1064.43 Degrees Centigrade
Medicine
Gold is non toxic and biologically benign, an excellent conductor of electricity, virtually indestructible, easy to shape and flatten and can be drawn out into microscopically thin strands known as bonding wire.
The most well known use of gold in medicine is in dentistry. The metal is combined with other metals such as platinum, silver, copper zinc or palladium to produce non-toxic, chemically inert alloys that are easy for dentists to work with and are strong and lasting.
The current demand for gold in dentistry is about 60 tonnes annually having recovered from a decline to circa 48 tonnes in 1987.
Rapid and ongoing developments in the use of lasers incorporating gold coatings are making dramatic progress in the treatment of cancers, sealing battlefield wounds in the field, emergency injury treatments in hospitals and previously inoperable heart conditions and tumors.
Lasers reliant on gold are used in delicate eye and brain surgery where absolute accuracy is essential.
Another recent development is the use of gold-coated lasers in the rejuvenation of burnt or damaged skin tissue leaving adjacent healthy tissue unaffected.
Gold helps in the treatment of prostate cancer and some other cancers and is used in surgical instruments to clear clogged arteries.
It is used in an eye surgery procedure to correct a condition, known as Lagophthalmos, where eyelids cannot be fully closed. By surgically implanting gold into the upper lids the gravity effect of its weight allows the lids to close when the muscles relax.
Computerized wheelchairs enable the handicapped to have more control over their movements.
The controls and the computer are linked by gold wire (bonding wire) and gold-coated pads that are both resistant to corrosion and have high electrical conductivity.
As these power wheelchairs are used outdoors and often exposed to extremes of temperature and weather, the use of gold in essential components is necessary to minimize breakdowns and the possible life threatening consequences.
Hi-Tech Electronics
Gold plays an essential part in every one of the millions of computers and peripherals that are produced worldwide every year. Gold is refined to 99.999 % pure and is drawn out to a wire only one hundredth of a millimetre in diameter.
This bonding wire is used to connect the semi-conductors and circuits. It is used on circuit boards and to make the contacts when using the keyboard.
The printed circuit boards in computer games have gold circuitry and gold plated contacts are used in the plugs to ensure trouble free contacts. Washing machines, dishwashers and even the humble pocket calculator need gold to operate reliably and efficiently.
Telecommunications
In every telephone mouthpiece there is a transmitter that uses gold in its diaphragm. The metal is used for its dependability in the variety of conditions that are likely to be encountered.
Throughout the telephone systems of the world gold is used to plate billions of contacts for phone jacks and connecting cords because of its' signal reliability and that it will not corrode or otherwise deteriorate.
TVs, VCRs and DVD Players
The circuits are connected by fine lines of gold to the micro-electronic circuit chips that change the incoming signals into a TV picture and sound.
Space
As the exploration of space continues so more and more uses for gold are being developed. Silicon wafers containing gold wafers protect on board computers in spacecraft from bombardment by heavy ions in space and allows monitoring and adjustments of the computers by ground control.
State of the art sophisticated and intricate gold circuitry allowed color pictures and chemical analysis of the surface of Mars to be transmitted back to earth.
The tonnage of gold used annually in the electronics industry amounts to approximately 150 tonnes with Japan being the major electronics manufacturer and accounting for over 45% of gold consumption, followed by The US with circa 30%.
The ever increasing speed of advances in technology suggests that even more uses will be found for the unique properties of gold and the consequential increase in consumption by the industrial sector alone.
Gold as a store of value and gold in jewellery and other adornments are subjects that warrant their own special informative articles on this site.
When deciding whether or not to play the precious metals markets, gold has, without doubt, the most complex of considerations to evaluate but also can be by far the most rewarding to both the informed long term investor and the short term speculator.
http://preciousmetalinvestment.com is the brainchild of Jaks Lloyds' husband John. He has been involved in the financial sector for many years and has a great deal of investment knowledge to offer.
expert: Jaks Lloyd
Gold: A Hedge Against The Perils Of Interesting Times
John Christensen - While paper-based investments and real estate are vulnerable to effects of changing times, gold soars. A precious metals investment may save a portfolio when all else fails.
The old Chinese curse, “may you live in interesting times”, has particular relevance to the current epoch of U.S. history. There’s a lot going on right now, much of it scary. Major investors around the world are responding to the events of our perilous age by sinking their dollars, deutschmarks and yen into gold, silver and palladium; Bill Gates, Warren Buffet, and billionaire speculator George Soros to name but a few. Big financial institutions like the Central Banks of Russia and China are also leaping onto the metals bandwagon driving the price of these precious commodities ever higher.
This is spurring a gold rush not witnessed since the Misery Index years of the 1970s. Many financial experts now view gold in particular as an island of stability in a paper-based investment market growing stormier all the time, a development that bodes well for everyday folks who want to shore up their retirement accounts with a precious metals hedge.
“People the world over are losing faith in politicians, and currencies,” says Marc Lubaszka, President/CEO, World Financial, a highly successful investment firm specializing in precious metals based in Studio City, Calif. “This has resulted in a flight to gold and other precious metals, a storehouse of value for more than five thousand years. Investors are taking their money out of paper assets, and putting it where it is likely to earn a better return in uncertain times.”
Old Reliables Unreliable Investments once considered as stable as granite are rapidly losing ground, Lubaszka explains. Real estate is but one example. Long praised as a slam-dunk by money gurus, home-buying is no longer viewed as a hurdle-free path to profit. Stratospheric pricing and higher interest rates are putting intolerable pressure on the current housing bubble, factors bound to bust the suds sooner or later and drive the overheated real estate market into deepfreeze.
“The housing bubble will burst rather than gradually deflate, following the rapid and violent pattern of decline of nearly every financial bubble throughout history,” Lubaszka says. “Higher interest rates negatively impact not only the health of the housing market but other economic segments as well. The stock market takes a hit because higher rates make it more costly for companies to pay for debt. Higher rates hurt corporate profit margins and reduce stock value, bad news given the deep debt situation so many companies are in today.”
Paper is Passé According to Lubaszka, the U.S. dollar has lost more than 80% of its original value since the early 70’s when we went to a floating currency, a situation not helped very much by the debut of the Euro in the late 1990s. Unlike American dollars, a portion of the Euro is gold-backed, a stability feature that has helped it outperform the dollar over the long haul. It is for this reason that many foreign investors have been taking money out of U.S. dollars and putting it into gold and oil instead, one explanation for why the price of both has continued to rise in recent months.
“Gold prices are climbing right now because the Federal Reserve is printing dollars in flood proportions to keep the real estate market afloat,” adds Richard Russell, editor Dow Theory Letters, a stock market trends and securities report published since 1946. “This is creating inflation, which erodes purchasing power. All the world’s central banks are inflating right now, reducing confidence in paper globally and encouraging gold-buying. India and China are spurring gold prices as well. India is the world’s largest gold-consumer, and the Chinese government is actively encouraging its citizens to buy gold.”
All are extremely encouraging signs for gold investors. Over the course of the past 35 years, gold has climbed in value from a modest $35 an ounce to nearly $600. Contrast that with the battered U.S. dollar, a currency currently worth only 20% of its value in 1970.
“When gold peaked-out in the 1970s, interest rates were at an all-time high,” Lubaszka says. “Right now we’re waiting to feel the effects of the last 9 interest rate increases which generally take 6-9 months to begin impacting the economy. Now’s the time to buy gold because when rates go up, downward pressure is exerted on real estate, stocks and bonds and commodities like gold tend to increase. The opposite occurs when rates travel from a high to a low. That’s the time to reduce gold assets and increase the paper part of a portfolio.”
Buy Without Getting Burned Michelle Henderson, a talent agency owner in Los Angeles, Calif. understands the stakes when it comes to investing. “As an agent I work in a commission-based world, and have to invest in both people and ideas all the time,” she says. “Though I’d had bad experiences with stock investments in the past, I knew I would eventually find something that would work for me. I invested in a diversified metals portfolio made up of palladium, silver and gold, and earned a profit of 38% with the palladium alone. Staying focused on making money, and following World Financials advice, I was able to earn an above-average return and greatly increase the overall value of my assets safely.”
Lubaszka explain, “It’s probably best for the first time investor to begin conservatively by purchasing physical metals instead of gold stocks, which can be very volatile”. According to Clearwater, Fla.-based talk show host and gold analyst, Tom O’Brien, when metals gain 20%, gold equities jump by fifty or sixty per cent. That’s great when it happens but the reverse can occur as well.
Buy gold bars or coins, and put them in a safety deposit box. If you chose to purchase coins from a coin shop, make certain you pay the lowest price possible and that they have a buy back policy. If you elect to go with a broker, fees will be inevitable because you are purchasing a tangible commodity.
There are brokers, and then there are brokers. The best of the breed will answer all questions, and make the process of first-time gold buying less nerve-wracking. Great brokers are also accessible when needed, and quick to call with any new information that affects the value of the investment.
Work with established companies, five years in business is good, ten even better. Don’t bother with firms that badger you with telemarketing offers or apply high-pressure sales tactics. Avoid paying high commissions too. Some brokers have layers of fees, through which they earn more money then they do investing on behalf of customers. There are also companies out there that will not buy metal back. Stay away from them as well.
“Check references and Better Business Bureau ratings”, Lubaszka adds. “Deal with a company that takes an active interest in doing business with you. World Financial, for example, offers a five-star customer satisfaction guarantee. If questions are not answered or we fail to respond to a prospect’s call or email within 24 hours, that person receives a one ounce silver American Eagle coin free of charge. A financial advisor’s job is to ease the investment process, and to insure that customers get the most for their money. Good advisers are merely good, but the best are worth their weight in gold.”
To contact World Financial directly call 818.264.4085. World Financial is the premiere provider of precious metals to investors nationwide. Aside from offering numerous incentive programs, World Financial offers clients the right type of precious metal strategy for every investor’s needs. They are located at 12198 Ventura Blvd Ste 200, Studio City http://worldfinancialdaily.com/
http://worldfinancialdaily.com
expert: Marc Lubaszka
The old Chinese curse, “may you live in interesting times”, has particular relevance to the current epoch of U.S. history. There’s a lot going on right now, much of it scary. Major investors around the world are responding to the events of our perilous age by sinking their dollars, deutschmarks and yen into gold, silver and palladium; Bill Gates, Warren Buffet, and billionaire speculator George Soros to name but a few. Big financial institutions like the Central Banks of Russia and China are also leaping onto the metals bandwagon driving the price of these precious commodities ever higher.
This is spurring a gold rush not witnessed since the Misery Index years of the 1970s. Many financial experts now view gold in particular as an island of stability in a paper-based investment market growing stormier all the time, a development that bodes well for everyday folks who want to shore up their retirement accounts with a precious metals hedge.
“People the world over are losing faith in politicians, and currencies,” says Marc Lubaszka, President/CEO, World Financial, a highly successful investment firm specializing in precious metals based in Studio City, Calif. “This has resulted in a flight to gold and other precious metals, a storehouse of value for more than five thousand years. Investors are taking their money out of paper assets, and putting it where it is likely to earn a better return in uncertain times.”
Old Reliables Unreliable Investments once considered as stable as granite are rapidly losing ground, Lubaszka explains. Real estate is but one example. Long praised as a slam-dunk by money gurus, home-buying is no longer viewed as a hurdle-free path to profit. Stratospheric pricing and higher interest rates are putting intolerable pressure on the current housing bubble, factors bound to bust the suds sooner or later and drive the overheated real estate market into deepfreeze.
“The housing bubble will burst rather than gradually deflate, following the rapid and violent pattern of decline of nearly every financial bubble throughout history,” Lubaszka says. “Higher interest rates negatively impact not only the health of the housing market but other economic segments as well. The stock market takes a hit because higher rates make it more costly for companies to pay for debt. Higher rates hurt corporate profit margins and reduce stock value, bad news given the deep debt situation so many companies are in today.”
Paper is Passé According to Lubaszka, the U.S. dollar has lost more than 80% of its original value since the early 70’s when we went to a floating currency, a situation not helped very much by the debut of the Euro in the late 1990s. Unlike American dollars, a portion of the Euro is gold-backed, a stability feature that has helped it outperform the dollar over the long haul. It is for this reason that many foreign investors have been taking money out of U.S. dollars and putting it into gold and oil instead, one explanation for why the price of both has continued to rise in recent months.
“Gold prices are climbing right now because the Federal Reserve is printing dollars in flood proportions to keep the real estate market afloat,” adds Richard Russell, editor Dow Theory Letters, a stock market trends and securities report published since 1946. “This is creating inflation, which erodes purchasing power. All the world’s central banks are inflating right now, reducing confidence in paper globally and encouraging gold-buying. India and China are spurring gold prices as well. India is the world’s largest gold-consumer, and the Chinese government is actively encouraging its citizens to buy gold.”
All are extremely encouraging signs for gold investors. Over the course of the past 35 years, gold has climbed in value from a modest $35 an ounce to nearly $600. Contrast that with the battered U.S. dollar, a currency currently worth only 20% of its value in 1970.
“When gold peaked-out in the 1970s, interest rates were at an all-time high,” Lubaszka says. “Right now we’re waiting to feel the effects of the last 9 interest rate increases which generally take 6-9 months to begin impacting the economy. Now’s the time to buy gold because when rates go up, downward pressure is exerted on real estate, stocks and bonds and commodities like gold tend to increase. The opposite occurs when rates travel from a high to a low. That’s the time to reduce gold assets and increase the paper part of a portfolio.”
Buy Without Getting Burned Michelle Henderson, a talent agency owner in Los Angeles, Calif. understands the stakes when it comes to investing. “As an agent I work in a commission-based world, and have to invest in both people and ideas all the time,” she says. “Though I’d had bad experiences with stock investments in the past, I knew I would eventually find something that would work for me. I invested in a diversified metals portfolio made up of palladium, silver and gold, and earned a profit of 38% with the palladium alone. Staying focused on making money, and following World Financials advice, I was able to earn an above-average return and greatly increase the overall value of my assets safely.”
Lubaszka explain, “It’s probably best for the first time investor to begin conservatively by purchasing physical metals instead of gold stocks, which can be very volatile”. According to Clearwater, Fla.-based talk show host and gold analyst, Tom O’Brien, when metals gain 20%, gold equities jump by fifty or sixty per cent. That’s great when it happens but the reverse can occur as well.
Buy gold bars or coins, and put them in a safety deposit box. If you chose to purchase coins from a coin shop, make certain you pay the lowest price possible and that they have a buy back policy. If you elect to go with a broker, fees will be inevitable because you are purchasing a tangible commodity.
There are brokers, and then there are brokers. The best of the breed will answer all questions, and make the process of first-time gold buying less nerve-wracking. Great brokers are also accessible when needed, and quick to call with any new information that affects the value of the investment.
Work with established companies, five years in business is good, ten even better. Don’t bother with firms that badger you with telemarketing offers or apply high-pressure sales tactics. Avoid paying high commissions too. Some brokers have layers of fees, through which they earn more money then they do investing on behalf of customers. There are also companies out there that will not buy metal back. Stay away from them as well.
“Check references and Better Business Bureau ratings”, Lubaszka adds. “Deal with a company that takes an active interest in doing business with you. World Financial, for example, offers a five-star customer satisfaction guarantee. If questions are not answered or we fail to respond to a prospect’s call or email within 24 hours, that person receives a one ounce silver American Eagle coin free of charge. A financial advisor’s job is to ease the investment process, and to insure that customers get the most for their money. Good advisers are merely good, but the best are worth their weight in gold.”
To contact World Financial directly call 818.264.4085. World Financial is the premiere provider of precious metals to investors nationwide. Aside from offering numerous incentive programs, World Financial offers clients the right type of precious metal strategy for every investor’s needs. They are located at 12198 Ventura Blvd Ste 200, Studio City http://worldfinancialdaily.com/
http://worldfinancialdaily.com
expert: Marc Lubaszka
The Process of Precision Metal Stamping
Precision metal stamping is the process of making 3-dimensional metal parts, lettering and other embossing. This is a kind of metal stamping used mostly for decorative purposes. It is similar to normal metal stamping, which is the process of molding metal into different shapes and sizes. The products obtained through metal stamping are used as components for some larger products in other industries. The most common metals and alloys used for precision metal stamping are copper, aluminum, brass, beryllium, nickel, nickel silver, steel, stainless steel, phos bronze and titanium.
Precision metal stamping is applicable to many industries like computers, electronics, electrical, dental, aerospace, instrumentation, military specs, defense, telecom and automotives. There are many methods in precision metal stamping for producing stamped prototypes. Blank creation is one such method. Blank creation involves the creation of a flat state of the component. The flat blank sheet is then used to make the part’s features. In blank creation, there are many processes like nibbling, chemical etching, water jet cutting, wire EDM, punch and die.
There are also many methods for producing prototypes by precision stamping. The type of method used depends on the size and intricacy of the parts to be produced as well as the number of prototypes. Single part transfer is one such method in which single parts are transferred from one station to the next for blanking and metal forming. The main advantage with this method is the cost effectiveness. One single, standard system can be maintained for designing, manufacturing and holding tooling inserts. However, this system is slow because it needs individual prototype parts. The other method is the progressive strip prototyping which involves the automatic transfer of the metal from one stage to the next.
Precision metal stamping can be done at very high speeds and even up to 1,200 strokes per minute. Precision metal stamping gives several advantages like the ability to use any metal or alloy and creation of components with very precise dimensions and shapes. Plating can also be very precise which is helpful when working with precious metals like gold and palladium.
Metal Stamping Info provides detailed information about precision, custom, and sheet metal stamping, as well as metal stamping machines and metal stamping die. Metal Stamping Info is the sister site of Wire EDM Web.
expert: Josh Riverside
Precision metal stamping is applicable to many industries like computers, electronics, electrical, dental, aerospace, instrumentation, military specs, defense, telecom and automotives. There are many methods in precision metal stamping for producing stamped prototypes. Blank creation is one such method. Blank creation involves the creation of a flat state of the component. The flat blank sheet is then used to make the part’s features. In blank creation, there are many processes like nibbling, chemical etching, water jet cutting, wire EDM, punch and die.
There are also many methods for producing prototypes by precision stamping. The type of method used depends on the size and intricacy of the parts to be produced as well as the number of prototypes. Single part transfer is one such method in which single parts are transferred from one station to the next for blanking and metal forming. The main advantage with this method is the cost effectiveness. One single, standard system can be maintained for designing, manufacturing and holding tooling inserts. However, this system is slow because it needs individual prototype parts. The other method is the progressive strip prototyping which involves the automatic transfer of the metal from one stage to the next.
Precision metal stamping can be done at very high speeds and even up to 1,200 strokes per minute. Precision metal stamping gives several advantages like the ability to use any metal or alloy and creation of components with very precise dimensions and shapes. Plating can also be very precise which is helpful when working with precious metals like gold and palladium.
Metal Stamping Info provides detailed information about precision, custom, and sheet metal stamping, as well as metal stamping machines and metal stamping die. Metal Stamping Info is the sister site of Wire EDM Web.
expert: Josh Riverside
Global Economic Power Shifts From The U.S. And Europe To Asia
India just reported GDP growth of 9.4% for the fiscal year ended March 2007. This is way above the 8% predicted rate of growth and moving toward China’s stunning 10.4% growth rate.
India, like China is becoming an engine of global growth. The U.S. is clearly no longer the important engine of global growth that it once was. Let us face facts. The U.S. has lost much of its global political leadership, and now its global economic leadership is coming into question.
The U.S. is still the world’s biggest economy, but with a growth rate of less than 1% in the last quarter, and with close to double digit growth in India and China there is little doubt that the U.S. will lose its status as the world’s biggest economy within a decade if these trends persist.
We are American, and we are pro-America, but we are also realists. Let us invest in those areas where the money is to be made. Let us invest in the countries that are growing fast and in the commodities and precious metals which will benefit from these trends. Let us look at the transportation companies whose products and services are necessary to effectuate this growth and at the energy and base metals which are the building blocks of any economy. Let us also look at the global financial intermediaries that will provide the financing for this growth and at the precious metals stocks where many of the profits will be invested.
In our opinion, gold will play a major part as a vehicle that central banks will acquire to strengthen their balance sheets. Recently, Spain sold some gold. The buyers were the central banks of countries with growing economies-the buyers were Asian central banks.
As power shifts from the U.S. and Europe to Asia, so do the central bank gold holdings shift from U.S. and Europe to Asia.
For more information on global investment visit http://www.howtoinvestglobally.com For more information on Monty Guild's investment management visit http://www.guildinvestment.com
These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions. The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country.
Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned.
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Monty Guild founded Guild Investment Management in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. Mr. Guild is a recognized expert in the areas of international investing and economics. He has been a writer and speaker on economic issues for 30 plus years and has been widely quoted in the world media. He holds a BA in economics and an MBA with highest honors.
expert: Monty Guild
India, like China is becoming an engine of global growth. The U.S. is clearly no longer the important engine of global growth that it once was. Let us face facts. The U.S. has lost much of its global political leadership, and now its global economic leadership is coming into question.
The U.S. is still the world’s biggest economy, but with a growth rate of less than 1% in the last quarter, and with close to double digit growth in India and China there is little doubt that the U.S. will lose its status as the world’s biggest economy within a decade if these trends persist.
We are American, and we are pro-America, but we are also realists. Let us invest in those areas where the money is to be made. Let us invest in the countries that are growing fast and in the commodities and precious metals which will benefit from these trends. Let us look at the transportation companies whose products and services are necessary to effectuate this growth and at the energy and base metals which are the building blocks of any economy. Let us also look at the global financial intermediaries that will provide the financing for this growth and at the precious metals stocks where many of the profits will be invested.
In our opinion, gold will play a major part as a vehicle that central banks will acquire to strengthen their balance sheets. Recently, Spain sold some gold. The buyers were the central banks of countries with growing economies-the buyers were Asian central banks.
As power shifts from the U.S. and Europe to Asia, so do the central bank gold holdings shift from U.S. and Europe to Asia.
For more information on global investment visit http://www.howtoinvestglobally.com For more information on Monty Guild's investment management visit http://www.guildinvestment.com
These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions. The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country.
Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned.
Guild’s current and past market commentaries are protected by copyright. Apart from any use permitted under the Copyright Act, you must not copy, frame, modify, transmit or distribute the market commentaries, without seeking the prior consent of Guild.
Monty Guild founded Guild Investment Management in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. Mr. Guild is a recognized expert in the areas of international investing and economics. He has been a writer and speaker on economic issues for 30 plus years and has been widely quoted in the world media. He holds a BA in economics and an MBA with highest honors.
expert: Monty Guild
Crying Baby Boomers
Social Security is BANKRUPT! The first segment of the Baby Boomers is about to help themselves to their share of Social Security. These are the people who were born in 1946 and are now 61 years of age. Shortly, an increasing number of these Baby Boomers will be taking early retirement. We are now seeing the front edge of a major Baby Boomer wave when those people who were born between 1946 and 1964, 80 million in all, will qualify for Social Security.
The Boomers tend to come from the age when you're told to go to school, get good grades, go to college, get a good job, work until retirement, retire, and enjoy the good life... with either your employer or government "entitlements" like Social Security taking care of you. The vast majority of Baby Boomers have been forced to take the latter Social Security since very few employers offer fully funded "Defined Benefit" retirement programs any more.
But unbeknownst to most people is the fact that the Social Security (SS) trust fund has no... funds. The cupboards are bare. You see, as the Social Security tax rolls come into the government, they go into the general treasury. Current SS recipients are paid from these funds, but there is no surplus... in fact, there's a deficit... more is paid out than comes in. So there really is no "trust" so to speak.
Brian Riedl of the conservative Heritage Foundation warns, "This is the single greatest economic challenge of our era."
If you believe, as do I, that the U.S. government's balance sheet is a tad bit tipped to the negative to the tune of almost $9 TRILLION, you've seen nothing yet. Over the next few decades the unfunded liabilities of Social Security and Medicare will rack up $50 trillion more in government obligations.
The US government has essentially two ways to address this situation. The first way will be to scale back on the benefits... there's just no other choice. The second way that the US government will address the situation will be through monetary inflation, the most subtle form of currency devaluation.
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. Say what? Print money? If you or I printed money, what would happen to us? We'd be thrown in jail. Not so for the U.S. government... or more accurately, the Federal Reserve, which is neither federal nor are there actually any reserves of value. The gold backing of our "fiat" Federal Reserve Notes, the dollar, was completely removed back in 1971 by then President Nixon. The Federal Reserve prints money, so to speak, by creating the dollars out of thin air and then using them to buy U.S. treasuries (bills, notes, and bonds) in the "open market"... thus the name "Federal Open Market Committee (FOMC)" that we hear so much about in the news.
This "printing" process will have a brutal impact on the dollar, a dollar that is already in decline and has broken major support at 80 on the dollar index. So what can you do to protect yourself from the further decline in the dollar? These and many more solutions you will find at our wealth-building web page.
The purchasing power of the dollar will continue to head down. Since 1913 when the Federal Reserve was created by an act of Congress, the dollar has lost 96 percent of its value. A dollar in 1913 is worth 4 cents today. We must wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold, silver, other precious metals, commodities, collectibles and just about anything that has inherent intrinsic value. The ultimate fate of the US dollar, and all fiat currencies for that matter, is for it to seek its ultimate intrinsic value... zero.
The third phase of the great commodities bull market lies ahead as the decline of the dollar and other fiat currencies is "discounted" in the market. Gold is destined to rise to "impossible" heights in terms of current US dollars. The reason the big move lies ahead is that the vast majority of investors remain clueless about what's happening to the US dollar and correspondingly, gold. The US public owns no gold. But when they wake up... look out!
"In every dark cloud there is a silver lining." Although there remains a preponderance of negative economic fundamentals in the United States, there is always a way to take advantage of such situations
Please see the Investors section of our web site at: http://www.dreamlifestylefound.com/investors/?CryingBabyBoomers
Jay Jolly has been creating wealth and investing since 1981. He has developed proprietary intellectual property that he shares with clients and institutions world wide. As an entrepreneur Jay empowers and inspires you to create the lifestyle of your dreams. Because of Jay's experience and reputation, he is a sought-after presenter for wealth and investing conferences across North America speaking on the global economy, geopolitics, markets, and investing. Jay's primary mission in life is to empower you with the knowledge, education, and experience in order for YOU to make your own decisions about money and investing. You CAN achieve the lifestyle of your dreams... and it is Jay's purpose and goal to assist you in every way he can. Your ultimate goal: freedom of choice ... your ability to choose whatever it is you wish to do with your precious time remaining on this mos
expert: Jay Jolly
The Boomers tend to come from the age when you're told to go to school, get good grades, go to college, get a good job, work until retirement, retire, and enjoy the good life... with either your employer or government "entitlements" like Social Security taking care of you. The vast majority of Baby Boomers have been forced to take the latter Social Security since very few employers offer fully funded "Defined Benefit" retirement programs any more.
But unbeknownst to most people is the fact that the Social Security (SS) trust fund has no... funds. The cupboards are bare. You see, as the Social Security tax rolls come into the government, they go into the general treasury. Current SS recipients are paid from these funds, but there is no surplus... in fact, there's a deficit... more is paid out than comes in. So there really is no "trust" so to speak.
Brian Riedl of the conservative Heritage Foundation warns, "This is the single greatest economic challenge of our era."
If you believe, as do I, that the U.S. government's balance sheet is a tad bit tipped to the negative to the tune of almost $9 TRILLION, you've seen nothing yet. Over the next few decades the unfunded liabilities of Social Security and Medicare will rack up $50 trillion more in government obligations.
The US government has essentially two ways to address this situation. The first way will be to scale back on the benefits... there's just no other choice. The second way that the US government will address the situation will be through monetary inflation, the most subtle form of currency devaluation.
The government will have to print the money to cover the coming tidal wave of unfunded liabilities. Say what? Print money? If you or I printed money, what would happen to us? We'd be thrown in jail. Not so for the U.S. government... or more accurately, the Federal Reserve, which is neither federal nor are there actually any reserves of value. The gold backing of our "fiat" Federal Reserve Notes, the dollar, was completely removed back in 1971 by then President Nixon. The Federal Reserve prints money, so to speak, by creating the dollars out of thin air and then using them to buy U.S. treasuries (bills, notes, and bonds) in the "open market"... thus the name "Federal Open Market Committee (FOMC)" that we hear so much about in the news.
This "printing" process will have a brutal impact on the dollar, a dollar that is already in decline and has broken major support at 80 on the dollar index. So what can you do to protect yourself from the further decline in the dollar? These and many more solutions you will find at our wealth-building web page.
The purchasing power of the dollar will continue to head down. Since 1913 when the Federal Reserve was created by an act of Congress, the dollar has lost 96 percent of its value. A dollar in 1913 is worth 4 cents today. We must wonder what the dollar will buy ten years from now -- fifteen years, twenty years. It's very sad, indeed.
This is the reason to own gold, silver, other precious metals, commodities, collectibles and just about anything that has inherent intrinsic value. The ultimate fate of the US dollar, and all fiat currencies for that matter, is for it to seek its ultimate intrinsic value... zero.
The third phase of the great commodities bull market lies ahead as the decline of the dollar and other fiat currencies is "discounted" in the market. Gold is destined to rise to "impossible" heights in terms of current US dollars. The reason the big move lies ahead is that the vast majority of investors remain clueless about what's happening to the US dollar and correspondingly, gold. The US public owns no gold. But when they wake up... look out!
"In every dark cloud there is a silver lining." Although there remains a preponderance of negative economic fundamentals in the United States, there is always a way to take advantage of such situations
Please see the Investors section of our web site at: http://www.dreamlifestylefound.com/investors/?CryingBabyBoomers
Jay Jolly has been creating wealth and investing since 1981. He has developed proprietary intellectual property that he shares with clients and institutions world wide. As an entrepreneur Jay empowers and inspires you to create the lifestyle of your dreams. Because of Jay's experience and reputation, he is a sought-after presenter for wealth and investing conferences across North America speaking on the global economy, geopolitics, markets, and investing. Jay's primary mission in life is to empower you with the knowledge, education, and experience in order for YOU to make your own decisions about money and investing. You CAN achieve the lifestyle of your dreams... and it is Jay's purpose and goal to assist you in every way he can. Your ultimate goal: freedom of choice ... your ability to choose whatever it is you wish to do with your precious time remaining on this mos
expert: Jay Jolly
Phases of Financial Planning
Most people want to retire with some level of financial security. We all want the peace of mind and self-dignity that comes from knowing that we are not at risk of ever becoming a burden on our families, the government or the state.
Knowing and understanding the three different phases of financial planning can act as a road map and help us prepare a good solid financial plan to improve our chances of meeting our life goals.
There are three different phases of financial planning:
The Accumulation phase
The Distribution phase, and
The Preservation phase
As the name implies, the first phase, the accumulation phase is the period of accumulating assets that will contribute to your wealth. This phase include your working years. First you learn to earn money, and then you determine how best to manage your money to make it grow into wealth. You can effectively do this by investing in different asset classes that will form the foundation of your wealth.
This phase provides a certain level of financial stability and most people never leave this phase their entire lifetime. However, majority of the population do not even enter this phase to begin accumulating any assets. They continually live from paycheque to paycheque without giving much thought to their financial future.
If you find your self in this phase, if you have invested in your first property (not your residential home), if you have started or purchased your first business, or purchased some stocks and shares, congratulate yourself.
Examples of common asset classes to contribute to your wealth include:
Cash (Treasury Bills, Money Markets, CDs)
Bonds
Stocks and shares
Land and Property (real estate)
Precious metals
The best advice for those in the accumulation stage is to hold onto the assets you are acquiring, and allow time to work it’s magic. Set time-bound goals for how long you intend to accumulate your assets before moving on to the next phase. Work diligently on your plan and keep your focus.
Continually learn more about the different asset classes available and diversify by investing in several classes. Different assets have different qualities and strengths, as well as risk and rewards.
Investing in several asset classes is a sound investment strategy that can significantly increase your ability to reach your investment goals faster.
The distribution stage is the period when you get to enjoy the benefits of wealth, when you get to draw down income from your assets. It is the reason for accumulating assets in the first place. After years of planning, investing and accumulating assets by the time you reach this stage your wealth is generally assured. Often by this time, your income is on autopilot to recur almost without much effort on your part. Most people can only dream about this phase.
The last phase is the preservation stage. This is the period when you plan to preserve and protect your accumulated wealth and prepare to safely transfer it to your rightful heirs.
In all three phases, there are three factors that can significantly erode the net value of your wealth. These are easily identified by the acronym PIT for:
Procrastination
Inflation and
Taxes
Whatever phase you are at in your financial plan, give careful thought to these three elements to reduce their threat to your net worth.
The key to reducing their threat to your wealth is to address them as soon as possible. The longer you wait, the more damaging their impact becomes. With the right investment strategy, you can enjoy your wealth, and simultaneously keep it intact.
The first most important step to financial planning is focussed asset accumulation. Start saving now to build and accumulate your wealth. Until you save, you cannot accumulate. The earlier you start planning, the sooner you will save, and the faster your assets will grow.
About the Author
Wealth and prosperity coach Margaret Ntifo specialises in helping empower people create ideal lives filled with more Money, Wealth and Prosperity.
For more information, and a free 7-Day e-course visit: Money, Wealth & Prosperity TIPS.
You may freely distribute this article in its entirety providing this copyright notice remains intact.
Further information contact: Margaret Ntifo
Copyright 2006: All Rights Reserved
expert: Margaret Ntifo
Knowing and understanding the three different phases of financial planning can act as a road map and help us prepare a good solid financial plan to improve our chances of meeting our life goals.
There are three different phases of financial planning:
The Accumulation phase
The Distribution phase, and
The Preservation phase
As the name implies, the first phase, the accumulation phase is the period of accumulating assets that will contribute to your wealth. This phase include your working years. First you learn to earn money, and then you determine how best to manage your money to make it grow into wealth. You can effectively do this by investing in different asset classes that will form the foundation of your wealth.
This phase provides a certain level of financial stability and most people never leave this phase their entire lifetime. However, majority of the population do not even enter this phase to begin accumulating any assets. They continually live from paycheque to paycheque without giving much thought to their financial future.
If you find your self in this phase, if you have invested in your first property (not your residential home), if you have started or purchased your first business, or purchased some stocks and shares, congratulate yourself.
Examples of common asset classes to contribute to your wealth include:
Cash (Treasury Bills, Money Markets, CDs)
Bonds
Stocks and shares
Land and Property (real estate)
Precious metals
The best advice for those in the accumulation stage is to hold onto the assets you are acquiring, and allow time to work it’s magic. Set time-bound goals for how long you intend to accumulate your assets before moving on to the next phase. Work diligently on your plan and keep your focus.
Continually learn more about the different asset classes available and diversify by investing in several classes. Different assets have different qualities and strengths, as well as risk and rewards.
Investing in several asset classes is a sound investment strategy that can significantly increase your ability to reach your investment goals faster.
The distribution stage is the period when you get to enjoy the benefits of wealth, when you get to draw down income from your assets. It is the reason for accumulating assets in the first place. After years of planning, investing and accumulating assets by the time you reach this stage your wealth is generally assured. Often by this time, your income is on autopilot to recur almost without much effort on your part. Most people can only dream about this phase.
The last phase is the preservation stage. This is the period when you plan to preserve and protect your accumulated wealth and prepare to safely transfer it to your rightful heirs.
In all three phases, there are three factors that can significantly erode the net value of your wealth. These are easily identified by the acronym PIT for:
Procrastination
Inflation and
Taxes
Whatever phase you are at in your financial plan, give careful thought to these three elements to reduce their threat to your net worth.
The key to reducing their threat to your wealth is to address them as soon as possible. The longer you wait, the more damaging their impact becomes. With the right investment strategy, you can enjoy your wealth, and simultaneously keep it intact.
The first most important step to financial planning is focussed asset accumulation. Start saving now to build and accumulate your wealth. Until you save, you cannot accumulate. The earlier you start planning, the sooner you will save, and the faster your assets will grow.
About the Author
Wealth and prosperity coach Margaret Ntifo specialises in helping empower people create ideal lives filled with more Money, Wealth and Prosperity.
For more information, and a free 7-Day e-course visit: Money, Wealth & Prosperity TIPS.
You may freely distribute this article in its entirety providing this copyright notice remains intact.
Further information contact: Margaret Ntifo
Copyright 2006: All Rights Reserved
expert: Margaret Ntifo
How to Make a Smart Investment in Watches
I'm sure you have all heard of record breaking prices of vintage watches at auctions and are considering making an investment in watches. The phenomenal success of quartz watches in the seventies and eighties drove up values of old mechanical watches as they became rarer.
It is this enthusiasm for mechanical watches that has spur manufacturers to come up with new innovation in mechanical watches.
So how do you choose a mechanical watch that will not only hold its value but also rise in value?
Buy a brand which is reputable and has a long history of preferably at least a century old.
Check with auction sites and used watch dealers and find out the value of a 5 year model. Is it worth any value? How about older ones? Are they worth more than the new models? If yes, then this brand may have good investment potential. Whether a time piece appreciates in value depend on the simple law of economics. The rarer it is the more highly prized it is. That's why rarity is so important. A reputable manufacturer can issue a special edition with only a limited number of watches available, preferably of less than 100.
Going deeper into this issue there may be many different brands but they may buy the watch movement supplied by one main supplier which means in essence they are basically the same watch.
For a watch to be unique , the watchmaker should design and manufacture most of the different parts rather than simply source components from another supplier.
The watch should be of high quality. It should have a quality movement.
Look at the case finish and design too. Check out the innovation in the watch.
Collectors are also interested in complications such as Perpetual Calendar, tourbillon, moon phases, power reserve indicator and day and night indicator. These are extra features besides the standard time telling. Perpetual calender accurately keeps track of the day, date, month and year. You do not have to worry whether the date is correct and set the correct date. Tourbillon is one of the most complicated components in watches which minimizes timekeeping errors caused by gravity.
The appreciation in value in mechanical watches is not as quick as other forms of investment. You should treat it as a long term investment. A investor wouldn't buy a watch today and sell it off the next day.
Potential watch investor should also know that value of a watch is dependent on the amount a buyer is willing to buy. In other words, a watch is worth only as much as a buyer is willing to pay for it.
Therefore it is very important that you like the watch and has emotional and sentimental value to you.
Lastly, you have to take good care of your watch and maintain it too . Remember to keep all the papers and documents too.
You can buy watches as investments. You can get the best prices on watches at http://www.cheapestsale.com/watches/
expert: Ian Tham
It is this enthusiasm for mechanical watches that has spur manufacturers to come up with new innovation in mechanical watches.
So how do you choose a mechanical watch that will not only hold its value but also rise in value?
Buy a brand which is reputable and has a long history of preferably at least a century old.
Check with auction sites and used watch dealers and find out the value of a 5 year model. Is it worth any value? How about older ones? Are they worth more than the new models? If yes, then this brand may have good investment potential. Whether a time piece appreciates in value depend on the simple law of economics. The rarer it is the more highly prized it is. That's why rarity is so important. A reputable manufacturer can issue a special edition with only a limited number of watches available, preferably of less than 100.
Going deeper into this issue there may be many different brands but they may buy the watch movement supplied by one main supplier which means in essence they are basically the same watch.
For a watch to be unique , the watchmaker should design and manufacture most of the different parts rather than simply source components from another supplier.
The watch should be of high quality. It should have a quality movement.
Look at the case finish and design too. Check out the innovation in the watch.
Collectors are also interested in complications such as Perpetual Calendar, tourbillon, moon phases, power reserve indicator and day and night indicator. These are extra features besides the standard time telling. Perpetual calender accurately keeps track of the day, date, month and year. You do not have to worry whether the date is correct and set the correct date. Tourbillon is one of the most complicated components in watches which minimizes timekeeping errors caused by gravity.
The appreciation in value in mechanical watches is not as quick as other forms of investment. You should treat it as a long term investment. A investor wouldn't buy a watch today and sell it off the next day.
Potential watch investor should also know that value of a watch is dependent on the amount a buyer is willing to buy. In other words, a watch is worth only as much as a buyer is willing to pay for it.
Therefore it is very important that you like the watch and has emotional and sentimental value to you.
Lastly, you have to take good care of your watch and maintain it too . Remember to keep all the papers and documents too.
You can buy watches as investments. You can get the best prices on watches at http://www.cheapestsale.com/watches/
expert: Ian Tham
How to Profit Using Sector Rotation
The "smart money" long ago discovered the power of sector rotation trading strategies to profit in any market environment regardless of whether the general indexes were going up, down or sideways.
Interestingly, and perhaps not surprisingly, sector rotation strategies have not been widely embraced by most retail investors, and even recently, with the advent of an almost unlimited number of Exchange Traded Funds, sector rotation is still not a widely employed trading strategy.
And this is a shame since sector rotation offers investors the opportunity to profit more consistently and enjoy greater returns than could otherwise be attained by just "buying the market."
Why Sector Rotation Works:
The United States economy goes through clearly defined phases of peaks and valleys that we call periods of expansion or recession. Since the end of World War II in 1945, the U.S. economy has transitioned through 11 recessions and 10 expansions and is currently in number 11. Expansion periods have averaged approximately five years and have been as short as 12 months to as long as 10 years between March, 1991, and March, 2001.
And leading sector rotation student and scholar Sam Stovall, chief investment strategist at Standard and Poor's and author of BusinessWeek column, "Sector Watch," says, "Breaking expansions into early, middle and late phases of equal durations, and recessions into early and late periods of similar lengths, and then analyzing the frequency of the market outperforming the industries in the S&P 500 during these periods, a pattern of sector rotation is apparent...."
And when you apply the theory of market cycles with sector rotation, you get a clear picture of what stage the economy is in and what sectors typically offer the best chance for reward with the minimum amount of risk.
The U.S. economy moves through four well defined stages and in each stage it's possible to identify which sectors of the economy, and so the stock market will perform the best.
Between 1995 and 2005, the annual range between the best and worst performing sectors could be more than 100% in any given year. For instance, in 2000, Utilities earned 50.5% while Internet lost -74.5% and in 2004 Energy Services gained 34.5% while Semiconductors lost -21.6%.
In any given year, being in the right sector vs. the wrong sector made double digit percentage differences in the profit/loss outcome. Therefore, it becomes immediately obvious that a sector rotation strategy that puts you in high performing sectors will have considerably better outcomes than one that focuses on the worst sectors or even across an average of all sectors.
As market leadership rotates from one sector to another, a good sector rotation trading system can place us in those sectors that are market leaders and so allow us to profit no matter what conditions the general markets find themselves in.
During bull market years, one can make more money than the averages by focusing on the strongest sectors, but surprisingly, one can even profit in bear market years because as we say, "there's always a bull market somewhere."
Even during the dark years of the 2000-2002 bear market when most investors took double digit losses approaching or even exceeding 50%, investors who focused on Utilities, Real Estate and Precious Metals enjoyed double digit returns.
Here are examples of specific results and why sector rotation can super charge your portfolio.
Year: 2000
Home Construction: +70.3%
Oil: + 64.3%
Utilities: +53.1%
S&P 500 -10.1%
Year: 2002
Energy: +44.3%
Oil: +44.0%
Commodity Tracking Index: +32.0%
S&P 500: -23.2%
Year: 2001
South Korea: +44.6%
Home Construction: +37.2%
Mexico: +14%
S&P 500: -13%
And this is why "the smart money" has gravitated towards sector rotation. Because there isn't just "one market" but rather a wide variety of "sub-markets" some of which will always be in significant up trends.
Sector rotation trading strategies allow the investor to identify and profit from sectors that are outperforming the general market and so are a valuable addition to any investor's portfolio.
(There is risk of loss in all investing activity and the Disclosure Statement presented at http://www.wallstreetsectorselector.com applies to all material in this report.)
John Nyaradi is President of Ridgeline Media Group, LLC, owner of Wall Street Sector Selector. Wall Street Sector Selector specializes in ETF trading using sector rotation and trades in both up and down markets utilizing iShares and ProShares Exchange Traded Funds. Nyaradi can be reached at http://www.wall-street-sector-selector.com
expert: John Nyaradi
Interestingly, and perhaps not surprisingly, sector rotation strategies have not been widely embraced by most retail investors, and even recently, with the advent of an almost unlimited number of Exchange Traded Funds, sector rotation is still not a widely employed trading strategy.
And this is a shame since sector rotation offers investors the opportunity to profit more consistently and enjoy greater returns than could otherwise be attained by just "buying the market."
Why Sector Rotation Works:
The United States economy goes through clearly defined phases of peaks and valleys that we call periods of expansion or recession. Since the end of World War II in 1945, the U.S. economy has transitioned through 11 recessions and 10 expansions and is currently in number 11. Expansion periods have averaged approximately five years and have been as short as 12 months to as long as 10 years between March, 1991, and March, 2001.
And leading sector rotation student and scholar Sam Stovall, chief investment strategist at Standard and Poor's and author of BusinessWeek column, "Sector Watch," says, "Breaking expansions into early, middle and late phases of equal durations, and recessions into early and late periods of similar lengths, and then analyzing the frequency of the market outperforming the industries in the S&P 500 during these periods, a pattern of sector rotation is apparent...."
And when you apply the theory of market cycles with sector rotation, you get a clear picture of what stage the economy is in and what sectors typically offer the best chance for reward with the minimum amount of risk.
The U.S. economy moves through four well defined stages and in each stage it's possible to identify which sectors of the economy, and so the stock market will perform the best.
Between 1995 and 2005, the annual range between the best and worst performing sectors could be more than 100% in any given year. For instance, in 2000, Utilities earned 50.5% while Internet lost -74.5% and in 2004 Energy Services gained 34.5% while Semiconductors lost -21.6%.
In any given year, being in the right sector vs. the wrong sector made double digit percentage differences in the profit/loss outcome. Therefore, it becomes immediately obvious that a sector rotation strategy that puts you in high performing sectors will have considerably better outcomes than one that focuses on the worst sectors or even across an average of all sectors.
As market leadership rotates from one sector to another, a good sector rotation trading system can place us in those sectors that are market leaders and so allow us to profit no matter what conditions the general markets find themselves in.
During bull market years, one can make more money than the averages by focusing on the strongest sectors, but surprisingly, one can even profit in bear market years because as we say, "there's always a bull market somewhere."
Even during the dark years of the 2000-2002 bear market when most investors took double digit losses approaching or even exceeding 50%, investors who focused on Utilities, Real Estate and Precious Metals enjoyed double digit returns.
Here are examples of specific results and why sector rotation can super charge your portfolio.
Year: 2000
Home Construction: +70.3%
Oil: + 64.3%
Utilities: +53.1%
S&P 500 -10.1%
Year: 2002
Energy: +44.3%
Oil: +44.0%
Commodity Tracking Index: +32.0%
S&P 500: -23.2%
Year: 2001
South Korea: +44.6%
Home Construction: +37.2%
Mexico: +14%
S&P 500: -13%
And this is why "the smart money" has gravitated towards sector rotation. Because there isn't just "one market" but rather a wide variety of "sub-markets" some of which will always be in significant up trends.
Sector rotation trading strategies allow the investor to identify and profit from sectors that are outperforming the general market and so are a valuable addition to any investor's portfolio.
(There is risk of loss in all investing activity and the Disclosure Statement presented at http://www.wallstreetsectorselector.com applies to all material in this report.)
John Nyaradi is President of Ridgeline Media Group, LLC, owner of Wall Street Sector Selector. Wall Street Sector Selector specializes in ETF trading using sector rotation and trades in both up and down markets utilizing iShares and ProShares Exchange Traded Funds. Nyaradi can be reached at http://www.wall-street-sector-selector.com
expert: John Nyaradi
How To Make Your First Million
The question most people want to know about money and wealth is:
‘How do I create wealth? How can I become rich?’
The simplest answer to this question is twofold:
Spend less than you earn, or make more money than you spend. Simple, and the added good news is you can choose to either spend less than you earn, or make more money than you spend, or decide to do both. Whichever you choose will naturally create a surplus for you that will inevitably make you rich, even if you do nothing else.
Most people however find this a most boring way of creating wealth, and either never start or find it too boring to continue. This is often due to lack of information or education about what to do with the surplus money that is created.
In fact, the magic difference to where you are now and having enough money and wealth to meet your every need is in the word INVESTING! Investing your surplus money is the key to wealth. Working harder will not make you wealthy! Making more money will not make you wealthy!
You have to learn how to invest your money to become wealthy. First, create a surplus. Then invest the surplus.
One of the most important resources we have as human beings is our time. When we have both time and money, we can create the lifestyle of our dreams. Unfortunately, we have been conditioned into trading one for the other. When we continually work hard to earn more money, we trade our time for money thereby giving up, or deferring our lifestyle.
When we learn how to invest our surplus money, we start putting out our money to work for us, as opposed to us constantly working for our money. Over time, thanks to compound interest, the income from your investments will increase thereby giving you the freedom to work, or not to.
There are a number of different investment asset classes you can choose to invest in. You are better off choosing two, or three at the most. But start learning about one to start with until you have mastered it and have a good grounding in it. Then focus on another asset class. The reason for doing this is to ensure that you have a solid foundation for your wealth. By so doing, you also create multiple streams of income and your income is not dependent on just one source.
Learning about how best to invest your money can be a lot of fun, and definitely beats simply leaving your surplus cash in a savings account.
Following are a number of asset classes you can choose from.
Stocks and Shares: income or capital, domestic or international
Property / Real estate
Bonds: corporate or government, high, medium or low yield
Cash: money markets
Natural resources: oil, timber, minerals
Precious metals: Gold, silver, platinum
Luxury collectibles: fine wine, art, classic automobiles
Foreign currency
Businesses
One of reasons why you need two or three different asset classes is that the best performing asset classes vary from year to year and is not easily predictable. Hence, having a mixture of different investments will help you meet your medium to long-term goals and reduce your overall risks in terms of the variability of returns for a given level of expected return.
I am a big fan of ‘The Three Pillars Of Wealth’, namely:
Stocks and Shares: income or capital, domestic or international
Property / Real estate
Businesses
You do not need a Harvard degree to master the basics of any of these. That’s why I focus my wealth mentoring on these three core areas.
Do not be deterred by small beginnings with your investments. I started investing with £100 per month and many people have started with less. Focus more on taking action, and starting early. Whichever asset class you choose to start investing your money in to create wealth, the one thing that is for sure is: The sooner you start the better off you will be in the long run.
The one thing most investors say to themselves, once they see their investment returns compound year after year is, ‘I wish I’d started sooner.’
Do not wait any longer. Start small, if you have to but start now!
About the Author
Wealth and prosperity mentor Margaret Ntifo specialises in empowering women take control of their financial destiny by creating diversified investment portfolios …easily, and effortlessly.
For more tips and wealth-building strategies, including a FREE 7-Day e-course visit: Money, Wealth & Prosperity TIPS.
You may freely distribute this article in its entirety providing this copyright notice remains intact.
Further information contact: Margaret Ntifo
Copyright 2006: All Rights Reserved
expert: Margaret Ntifo
‘How do I create wealth? How can I become rich?’
The simplest answer to this question is twofold:
Spend less than you earn, or make more money than you spend. Simple, and the added good news is you can choose to either spend less than you earn, or make more money than you spend, or decide to do both. Whichever you choose will naturally create a surplus for you that will inevitably make you rich, even if you do nothing else.
Most people however find this a most boring way of creating wealth, and either never start or find it too boring to continue. This is often due to lack of information or education about what to do with the surplus money that is created.
In fact, the magic difference to where you are now and having enough money and wealth to meet your every need is in the word INVESTING! Investing your surplus money is the key to wealth. Working harder will not make you wealthy! Making more money will not make you wealthy!
You have to learn how to invest your money to become wealthy. First, create a surplus. Then invest the surplus.
One of the most important resources we have as human beings is our time. When we have both time and money, we can create the lifestyle of our dreams. Unfortunately, we have been conditioned into trading one for the other. When we continually work hard to earn more money, we trade our time for money thereby giving up, or deferring our lifestyle.
When we learn how to invest our surplus money, we start putting out our money to work for us, as opposed to us constantly working for our money. Over time, thanks to compound interest, the income from your investments will increase thereby giving you the freedom to work, or not to.
There are a number of different investment asset classes you can choose to invest in. You are better off choosing two, or three at the most. But start learning about one to start with until you have mastered it and have a good grounding in it. Then focus on another asset class. The reason for doing this is to ensure that you have a solid foundation for your wealth. By so doing, you also create multiple streams of income and your income is not dependent on just one source.
Learning about how best to invest your money can be a lot of fun, and definitely beats simply leaving your surplus cash in a savings account.
Following are a number of asset classes you can choose from.
Stocks and Shares: income or capital, domestic or international
Property / Real estate
Bonds: corporate or government, high, medium or low yield
Cash: money markets
Natural resources: oil, timber, minerals
Precious metals: Gold, silver, platinum
Luxury collectibles: fine wine, art, classic automobiles
Foreign currency
Businesses
One of reasons why you need two or three different asset classes is that the best performing asset classes vary from year to year and is not easily predictable. Hence, having a mixture of different investments will help you meet your medium to long-term goals and reduce your overall risks in terms of the variability of returns for a given level of expected return.
I am a big fan of ‘The Three Pillars Of Wealth’, namely:
Stocks and Shares: income or capital, domestic or international
Property / Real estate
Businesses
You do not need a Harvard degree to master the basics of any of these. That’s why I focus my wealth mentoring on these three core areas.
Do not be deterred by small beginnings with your investments. I started investing with £100 per month and many people have started with less. Focus more on taking action, and starting early. Whichever asset class you choose to start investing your money in to create wealth, the one thing that is for sure is: The sooner you start the better off you will be in the long run.
The one thing most investors say to themselves, once they see their investment returns compound year after year is, ‘I wish I’d started sooner.’
Do not wait any longer. Start small, if you have to but start now!
About the Author
Wealth and prosperity mentor Margaret Ntifo specialises in empowering women take control of their financial destiny by creating diversified investment portfolios …easily, and effortlessly.
For more tips and wealth-building strategies, including a FREE 7-Day e-course visit: Money, Wealth & Prosperity TIPS.
You may freely distribute this article in its entirety providing this copyright notice remains intact.
Further information contact: Margaret Ntifo
Copyright 2006: All Rights Reserved
expert: Margaret Ntifo
A Third Uranium Mine in Namibia?
The excitement Paladin Resources Limited (TSE: PDN) has been quietly generating through the uranium mining sector puts African uranium mining squarely into the spotlight. The country of Namibia, bordering South Africa, Botswana, Angola and the South Atlantic Ocean, is already one of the world’s key uranium producers – supplying global utilities with between six and eight percent of the uranium oxide of the world’s newly mined supply to fuel their nuclear reactors. In an historic development, two sales contracts were recently announced for the purchase of uranium from Paladin’s Langer Heinrich uranium project before the mine has been commissioned (scheduled for opening in September 2006). Both contracts announced eight days apart in late January of this year were each for the delivery of more than 2 million pounds of U3O8 between 2007 and 2012. The company’s news release of January 27th named an unspecified U.S. utility as one of Paladin’s new customers.
Namibia is a uranium-friendly mining country. In October, Mined and Energy Minister Erkki Nghimtina told the country’s National Assembly, “Namibia should consider exploiting its uranium ore reserves in the light of rising world uranium prices.” The country has already been doing so, through Rio Tinto Group’s Rossing uranium mine for the past 25 years, which provides jobs to more than 800 employees. With the addition of the Langer Heinrich, more uranium will be mined.
The Rossing is one of the largest open pit uranium mines in the world and with solid reserves. According to the company’s website, this mine “currently produces about 7.7 percent of the world’s uranium.” The Rossing uranium deposit is an intrusive deposit, with intrusive rocks in this category which include alaskite, granite, pegmatite and monzonites. Around the world similar type deposits include South Africa’s Palabora and Greenland’s Ilimausaq. In South Australia, a similar intrusive deposit – Radium Hill – was mined from 1954-1962.
Paladin’s success story has spurred another junior uranium company, Forsys Metals (TSX: FSY) to press forward with its advanced stage exploration uranium project in Namibia’s Erongo region. Last May, a bottom-fishing investor might have easily bought Paladin Resources shares for under C$1/share (the low was $C0.86). Recently, those shares traded as high as C$3.30/share – a 300 percent (or more) gain in less than twelve months. How does Forsys Metals stack up against the giant Rossing uranium mine and Paladin’s burgeoning Langer Heinrich? Forsys Metals shares today are in the same trading one might have found Paladin Resources less than a year ago. Forsys has initiated a pre-feasibility study on the company’s Valencia uranium deposit, which should boost investor interest if the company makes positive strides toward achieving that target.
Forsys Metal’s Valencia Uranium Deposit
Forsys Metal’s Valencia uranium deposit is located 35 kilometers along geological strike from the Rossing uranium mine and approximately 40 kilometers north of the Langer Heinrich deposit. “This is a granitic uranium deposit (uranium mineralization in granite), that is geologically similar to the Rossing,” said Duane Parnham, Chairman Chief Executive of Forsys Metals. “We’ve completed a National Instrument 43-101 compliant technical report verifying the historical work of Goldfields Namibia between 1973 and 1986. It outlines a historical resource of greater than 20 million pounds of U3O8.” Parnham explained the mineralization is exposed on the surface and the deposit remains open for further expansion. “The Valencia is also a deposit we feel can be moved rather quickly into a production scenario,” Parnham pointed out. “The deposit is amenable to conventional open pit mining methods.”
According to the National Instrument 43-101 technical report filed in October 2005 on the Valencia uranium property by Graham Michael Greenway, a registered geological scientist with South African Council for Natural Scientific Professions, “Uranium mineralization is present at the Valencia Project property as uraninite (UO2) mineralization… Uranium mineralization has been identified over an area of 1,100m north-south by 500m east-west…Uranium mineralization predominantly occurs in the finer-grained alaskite… The uranium mineralization is variably distributed through the alaskite intrusions and in many cases high-grade mineralization is in contact with barren or poorly mineralized alaskite.”
The Valencia project area is situated in the Central Zone of Africa’s Damara Orogenic Belt. This belt belongs to the late Precambrian, early Palezoic and Pan African Mobile Belt system that run across the African continent. Medium to high grades of metamorphism and voluminous granitic intrusions characterize the Central Zone. In a 1992 report entitled Uranium: The Mineral Resources of Namibia, published by the country’s Ministry of Mines and Energy and the Geological Survey, geologists Roesener and Schreuder wrote, “All of the uraniferous granitic occurrences discovered in Namibia are situated in the Central Zone.”
The geology is similar to the Rossing uranium mine, according to Duane Parnham. Greenway suggested geological similarities as well. In his resume, Mr. Greenway disclosed he had completed a Minerals Resource estimate for the Valencia project, while in the employ of Rossing Uranium Ltd. Having graduated from South Africa’s University of Natal, Greenway has worked for 15 years as a geologist, ten of those years spent evaluating and calculating mineral resources. In his conclusion filed in the National Instrument 43-101, Greenway wrote, “The Valencia Uranium Project contains an alaskite hosted uranium deposit similar to other uranium deposits found in the Central Zone of the Damara Orogen. The main zone of mineralization is 520 meters wide, 720 meters long, and 200 meters thick and occurs from surface down to a depth of 360 meters.” Greenway estimated that at a cut-off grade of 017 kg/t U3O8, the currently defined inferred mineral resource at Valencia is 32 million tonnes at a grade of 0.22 kg/t U3O8.
Evaluation
Where water costs are high, uranium mining can become costly and uneconomic. Forsys Metal’s Valencia property is admittedly in a desert region. Distant water would require a pipeline. For example, the current pipeline to the Rossing uranium mine requires 2 million cubic meters of water daily pumped to it. Mr. Parnham does foresee this as a potential hazard, but believes the pipeline to the Rossing mine could be extended to the Valencia deposit, should it become a producing uranium mine. The Langer Heinrich also has a pipeline to pump the precious in order to mine the uranium. However, with that concern, there is the flip side. The Rossing mine reportedly produces uranium at less than $20/pound. Some estimates reach as low as $12/pound, but at a rising spot uranium price seemingly destined to top $40/pound, any production cost under $20/pound, in sufficient quantity, could be bankable. One uranium insider suggested the Rossing may be in the process of expanding its uranium production, because of the soaring spot uranium price, to as much as triple its current capacity.
The problem with water might be solved in the context of Namibia’s energy import climate. Currently, the country reportedly imports about 80 percent of its power from South Africa. The controversial Swakopmund desalination plant, first announced in 1998, might be revived to meet the country’s growing water requirements. The country may need to drill more water wells. In any event, miners can become creatively inventive when faced with environmental concerns in order to produce their commodity. In this case, helping Namibia solve its water issues could very well help that country accelerate its industrial growth strategy.
Based upon the rising monthly value in his company’s potential asset, brought about by soaring spot uranium prices, Parnham doesn’t mince words in spelling out the direction Forsys Metals is heading, “We think we have a situation whereby we can fast-track a pre-feasibility stage by conducting some limited amount of verification drilling and geo-tech drilling, and then make a formal decision to move immediately into a bankable feasibility stage.” How fast can Forsys Metals move forward? In the case of Paladin Resources, they fast-tracked their project forward in less than two years. Will history repeat itself with Forsys Metals? Stay tuned.
COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.
James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com
expert: James Finch
Namibia is a uranium-friendly mining country. In October, Mined and Energy Minister Erkki Nghimtina told the country’s National Assembly, “Namibia should consider exploiting its uranium ore reserves in the light of rising world uranium prices.” The country has already been doing so, through Rio Tinto Group’s Rossing uranium mine for the past 25 years, which provides jobs to more than 800 employees. With the addition of the Langer Heinrich, more uranium will be mined.
The Rossing is one of the largest open pit uranium mines in the world and with solid reserves. According to the company’s website, this mine “currently produces about 7.7 percent of the world’s uranium.” The Rossing uranium deposit is an intrusive deposit, with intrusive rocks in this category which include alaskite, granite, pegmatite and monzonites. Around the world similar type deposits include South Africa’s Palabora and Greenland’s Ilimausaq. In South Australia, a similar intrusive deposit – Radium Hill – was mined from 1954-1962.
Paladin’s success story has spurred another junior uranium company, Forsys Metals (TSX: FSY) to press forward with its advanced stage exploration uranium project in Namibia’s Erongo region. Last May, a bottom-fishing investor might have easily bought Paladin Resources shares for under C$1/share (the low was $C0.86). Recently, those shares traded as high as C$3.30/share – a 300 percent (or more) gain in less than twelve months. How does Forsys Metals stack up against the giant Rossing uranium mine and Paladin’s burgeoning Langer Heinrich? Forsys Metals shares today are in the same trading one might have found Paladin Resources less than a year ago. Forsys has initiated a pre-feasibility study on the company’s Valencia uranium deposit, which should boost investor interest if the company makes positive strides toward achieving that target.
Forsys Metal’s Valencia Uranium Deposit
Forsys Metal’s Valencia uranium deposit is located 35 kilometers along geological strike from the Rossing uranium mine and approximately 40 kilometers north of the Langer Heinrich deposit. “This is a granitic uranium deposit (uranium mineralization in granite), that is geologically similar to the Rossing,” said Duane Parnham, Chairman Chief Executive of Forsys Metals. “We’ve completed a National Instrument 43-101 compliant technical report verifying the historical work of Goldfields Namibia between 1973 and 1986. It outlines a historical resource of greater than 20 million pounds of U3O8.” Parnham explained the mineralization is exposed on the surface and the deposit remains open for further expansion. “The Valencia is also a deposit we feel can be moved rather quickly into a production scenario,” Parnham pointed out. “The deposit is amenable to conventional open pit mining methods.”
According to the National Instrument 43-101 technical report filed in October 2005 on the Valencia uranium property by Graham Michael Greenway, a registered geological scientist with South African Council for Natural Scientific Professions, “Uranium mineralization is present at the Valencia Project property as uraninite (UO2) mineralization… Uranium mineralization has been identified over an area of 1,100m north-south by 500m east-west…Uranium mineralization predominantly occurs in the finer-grained alaskite… The uranium mineralization is variably distributed through the alaskite intrusions and in many cases high-grade mineralization is in contact with barren or poorly mineralized alaskite.”
The Valencia project area is situated in the Central Zone of Africa’s Damara Orogenic Belt. This belt belongs to the late Precambrian, early Palezoic and Pan African Mobile Belt system that run across the African continent. Medium to high grades of metamorphism and voluminous granitic intrusions characterize the Central Zone. In a 1992 report entitled Uranium: The Mineral Resources of Namibia, published by the country’s Ministry of Mines and Energy and the Geological Survey, geologists Roesener and Schreuder wrote, “All of the uraniferous granitic occurrences discovered in Namibia are situated in the Central Zone.”
The geology is similar to the Rossing uranium mine, according to Duane Parnham. Greenway suggested geological similarities as well. In his resume, Mr. Greenway disclosed he had completed a Minerals Resource estimate for the Valencia project, while in the employ of Rossing Uranium Ltd. Having graduated from South Africa’s University of Natal, Greenway has worked for 15 years as a geologist, ten of those years spent evaluating and calculating mineral resources. In his conclusion filed in the National Instrument 43-101, Greenway wrote, “The Valencia Uranium Project contains an alaskite hosted uranium deposit similar to other uranium deposits found in the Central Zone of the Damara Orogen. The main zone of mineralization is 520 meters wide, 720 meters long, and 200 meters thick and occurs from surface down to a depth of 360 meters.” Greenway estimated that at a cut-off grade of 017 kg/t U3O8, the currently defined inferred mineral resource at Valencia is 32 million tonnes at a grade of 0.22 kg/t U3O8.
Evaluation
Where water costs are high, uranium mining can become costly and uneconomic. Forsys Metal’s Valencia property is admittedly in a desert region. Distant water would require a pipeline. For example, the current pipeline to the Rossing uranium mine requires 2 million cubic meters of water daily pumped to it. Mr. Parnham does foresee this as a potential hazard, but believes the pipeline to the Rossing mine could be extended to the Valencia deposit, should it become a producing uranium mine. The Langer Heinrich also has a pipeline to pump the precious in order to mine the uranium. However, with that concern, there is the flip side. The Rossing mine reportedly produces uranium at less than $20/pound. Some estimates reach as low as $12/pound, but at a rising spot uranium price seemingly destined to top $40/pound, any production cost under $20/pound, in sufficient quantity, could be bankable. One uranium insider suggested the Rossing may be in the process of expanding its uranium production, because of the soaring spot uranium price, to as much as triple its current capacity.
The problem with water might be solved in the context of Namibia’s energy import climate. Currently, the country reportedly imports about 80 percent of its power from South Africa. The controversial Swakopmund desalination plant, first announced in 1998, might be revived to meet the country’s growing water requirements. The country may need to drill more water wells. In any event, miners can become creatively inventive when faced with environmental concerns in order to produce their commodity. In this case, helping Namibia solve its water issues could very well help that country accelerate its industrial growth strategy.
Based upon the rising monthly value in his company’s potential asset, brought about by soaring spot uranium prices, Parnham doesn’t mince words in spelling out the direction Forsys Metals is heading, “We think we have a situation whereby we can fast-track a pre-feasibility stage by conducting some limited amount of verification drilling and geo-tech drilling, and then make a formal decision to move immediately into a bankable feasibility stage.” How fast can Forsys Metals move forward? In the case of Paladin Resources, they fast-tracked their project forward in less than two years. Will history repeat itself with Forsys Metals? Stay tuned.
COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.
James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com
expert: James Finch
Learn to Invest Money - Protect Your Stocks During Turbulent Times, Part I
This is a special article in response to the global market’s recent correction.
In the U.S., the Dow is down 4% , the Nasdaq about 6%, and the S&P 500 about 5% in a week. European stocks posted their biggest drop since May 2003, and the FTSE 100 in the UK had its biggest 2 day loss in 3 years. On the other hand, in Asia, as of May 11th, the HK Hang Seng index was up 22%, the South Korean index up 55%, the Australian markets up 31%, and China was up 50% before these markets also corrected with the global market correction in the past 7 days.
In addition, the U.S. is allocating $2 billion very soon to shore up its borders, major conflict still is going on in Iraq and Afghanistan, and Venezuela has increased the top royalty rates on oil to 33% from 16.67% after raising this rate from just 1% in October, 2004. In Bolivia, Evo Morales has followed his friend Chavez’s lead, and nationalized his country’s oil and natural gas resources. In Mexico, political unrest, according to subcomandante Marcos, is the worst since 1994 as it nears its next Presidential election. In Iran, the threat of nuclear confrontation with Israel and the United States looms, and returning to the U.S., record trade deficits that won’t turn around any time soon, a falling dollar, and another bad expected hurricane season (due to global warming) is what lies ahead.
So What is an Investor to Do?
Well, sad to say, but I don’t believe the worst is over. The temporary bounce we received mid-week was not the bounce I believe that has yet to come. I still believe that we will see a sharp, steep bounce sometime soon in response to the oversold market. But following that, I still believe that we may see the worst to come. Why? Just read the paragraph above. So in response, I have been shifting significant portions of my client’s into several areas for protection. If you had remained fully invested in these markets before they started tanking I would not recommend panicking and selling out now.
The biggest mistake individual investors make is panicking on market corrections and then buying back in after the market bounces back significantly. That’s the worst thing you could do. Sell low and buy high, but yet millions of investors will make that mistake in response to this weeks actions. But yet if you are mainly invested in Europe and the U.S., you need to rebalance your portfolio now because you will be punished for such short sightedness in the remainder of 2006. In fact, if you liquidated a good deal of assets before the plunge, I would look to buy partial (but not full) positions in some stocks now as a good deal of stocks are on sale right now. It pays to be brave when others are afraid (I think Warren Buffet said that).
Recently a new client transferred over a large portfolio and I immediately liquidated as much as I could, luckily liquidating before the second big drop in the global markets this week. His previous advisor did not own a single stock on the Brazilian, Canadian, London, Australian, Chinese, Mexican stock market. Not even one ADR either. Every single stock he owned was listed on the NYSE or S&P 500. These are the types of portfolios that will get punished over the remainder of the year. I recently read an article about a big producer at another American firm that recently shifted 70% of all his client’s assets into China, but all through Chinese mutual funds. I hate mutual funds, and the thought of owning mutual funds in emerging markets (but that’s an article for another time). People should always own stocks, not mutual funds. Mutual funds are the lazy way out and you’ll get punished for being lazy. It’s just not the way to benefit from these rapid growth markets.
So where should your money go? Due to all the political unrest, I’m looking at the defense sector. Due to continued globalization and the threat of new epidemics, I’m also looking at the healthcare and pharmaceutical sector. And due to all the geopolitical unrest, I’m looking at precious metals. Geographically, I’m looking for continuing opportunities in China of course, as well as some in Brazil, Australia, the U.K. and Canada. And the only U.S. companies I’d invest in other than the defense sector would be companies that have very wide global expansion initiatives. But I can’t discuss all of these ideas, so I’ll discuss one of my favorites –Precious metals.
PRECIOUS METALS
I’m not really sure but large investment firms by and large seem to ignore year after year, precious metals such as gold, silver, palladium, and others. However, in turbulent times, this asset class is one of the most valuable.
It’s not that the news doesn’t report on it. In fact, every night, in financial news reports, the closing price of commodities including gold is reported. However, at the end of the day, very few people ever seem to benefit from investing in the stocks (and not the commodities themselves) that benefit the most during precious metal bull markets.
LESSON #1: The average person does not understand the upside of investing in metals because it has never properly been explained to them
Many myths surround metals that cloud the truth about their value as an investment vehicle. Several of the most widespread myths include the following:
(1)Gold, silver and metals are risky speculative investments.
(2)The best way to buy gold and silver is to physically own the commodity.
(3)Gold is only an investment accessible to the extremely rich.
The definition of speculation according to Webster is the following: “the assumption of unusual business risk in hopes of obtaining commensurate gain”. Speculation is one of the most incorrectly used terms in investing. Investors in general stay away from trying to profit from bull markets in precious metals because of its speculative stigma. However, what is never explained to most investors is that the great majority of risk can be mitigated by employing intelligent analysis and intelligent buying and selling strategies.
Therefore, these investment opportunities should not be rated speculative but more accurately explained as moderate risk, high return opportunities. If you don’t perform intelligent analysis and intelligent buying and selling strategies, then investing in large company stocks, typically described as the “safest” of all investments, can become highly speculative as well. Large companies such as energy conglomerate Enron went belly up and investors lost every penny they had invested in this company. Stocks and bonds invested in “safe” companies such as Ford and Hyundai became risky this year when accounting scandals were uncovered that placed these company’s credit ratings on shaky ground.
Bonds are always described by financial consultants as “safe” investments and financial consultants will buy bonds for the overwhelming majority of their clients if they are over 60 years of age. But right now, bonds are probably one of the riskiest investments you could own. Bond prices go down as interest rates climb higher. Most likely interest rates will head higher from here, so that means the face value of bonds will decline. Bond prices are linked to U.S. dollars. The dollar is incredibly weak now and will possibly even become significantly weaker. And then there is credit risk. Accounting scandals are uncovered everyday.
And in case you’ve forgotten the “high quality” accompanies accused and investigated for fraudulent activity, in 2001 and 2002 alone, these companies included Adelphia, AOL Time Warner, Arthur Anderson, Bristol-Myers Squibb, Citigroup, ImClone, General Electric, JP Morgan, Lucent, Parmalat, Freddie Mac, Duke Energy, Dynergy, Enron, Global Crossing, Halliburton, K-Mart, Merck, Qwest Communications, Reliant Energy, Tyco, Worldcom, and Xerox to name a few. All were accused of falsifying their financials to make revenues or cash flows look better than they actually were. More recently, Ford, AIG, and Hyundai come to mind.
Think about how many more people would invest in an opportunity if they knew it was a moderate risk, high return opportunity versus a high risk, high return opportunity. To give you an example of exactly what I mean, let’s consider the following situation.
Opportunity A: Invest $10,000 in company ABC. Risk of investment: Low. Maximum upside: $1,000. Maximum downside: Capped at $1,500 by using a stop-loss of 15% (means that the stock automatically sells if it loses 15%).
Opportunity B: Invest $10,000 in a gold mining company. Risk of investment: Above average. Maximum upside: $25,000 to $100,000. Maximum downside: Capped at $4,000 by using a stop loss of 40%.
With Opportunity B, a greater downside risk exists but it also possesses a much much greater potential upside. Now even if we factor in the greater risk of Opportunity B, estimating that the downside loss scenario is twice as likely to happen (40%) when compared to Opportunity A (20%), the risk-adjusted numbers now look like this.
Risk-adjusted loss, Opportunity A: $1,500 * 20% = $300
Risk-adjusted loss, Opportunity B: $4,000 * 40% = $1,600
So on a risk-adjusted basis, for an additional risk of $1,300, you gain upside of $24,000 to $99,000 on potential return. Most people, if presented with an investment correctly in this manner, would take advantage of several Opportunity B type investments because of its much better risk/ reward equation. It wouldn’t be wise to engage in many opportunities like this, but several wagers such as these are more likely to pay off than not.
Myth (2) is also a reason most average investors don’t invest in gold and precious metals. Many people believe that one must physically buy gold and silver bullions to benefit from rising gold and silver prices and don’t want to deal with the hassle of safekeeping and buying bullions. However, now there are gold and silver ETFs (Exchange traded funds) that basically mimic the price of gold and silver. But even so, I still don’t believe it’s the best way to benefit from the uncertainty in the markets and in the geo-political sphere.
Owning gold and silver coins, rare coins that are in demand, is much better than owning physical gold or silver or the ETFs, because rare coins always appreciate in price over time and are often worth many many more times the cost of the actual gold and silver in the coins. So a gold coin that is worth $2,000 in underlying gold may sell for $8,000 or $10,000. This probably is the single best way to capitalize on precious metal bull markets, NOT buying actual gold or silver or the gold or silver ETFs. The second best way is to buy gold mining companies. Gold and silver mining companies often appreciate many more times the cost of their underlying asset during precious metal bull markets so are often a much better alternative to profit from a bull market in metals.
In the second part of this article, I’ll review the final two lessons about investing in precious metals.
© 2006 Global Market Opportunities
(May 18, 2006)
This article may be freely reprinted on another website as long as it is not modified, changed, or altered in any way and as long as the below author byline is included along with the active hyperlinks below:
J.S. Kim is the Managing Director of SmartKnowledgeU™ and editor of the SmartKnowledgeU™ investment newsletters. He is the inventor of the revolutionary SmartKnowledgeU™ investment strategies that are designed to grant the average investor a very high probability of earning 25% or more returns annually from his or her investment portfolio.
To learn how to build wealth from the coming investment crisis, click the following link, Use advanced wealth planning techniques to get rich!
Learn more about our investment newsletters here.
Visit our blog "The Underground Investor" for much more commentary on global markets.
expert: J.S.Kim
In the U.S., the Dow is down 4% , the Nasdaq about 6%, and the S&P 500 about 5% in a week. European stocks posted their biggest drop since May 2003, and the FTSE 100 in the UK had its biggest 2 day loss in 3 years. On the other hand, in Asia, as of May 11th, the HK Hang Seng index was up 22%, the South Korean index up 55%, the Australian markets up 31%, and China was up 50% before these markets also corrected with the global market correction in the past 7 days.
In addition, the U.S. is allocating $2 billion very soon to shore up its borders, major conflict still is going on in Iraq and Afghanistan, and Venezuela has increased the top royalty rates on oil to 33% from 16.67% after raising this rate from just 1% in October, 2004. In Bolivia, Evo Morales has followed his friend Chavez’s lead, and nationalized his country’s oil and natural gas resources. In Mexico, political unrest, according to subcomandante Marcos, is the worst since 1994 as it nears its next Presidential election. In Iran, the threat of nuclear confrontation with Israel and the United States looms, and returning to the U.S., record trade deficits that won’t turn around any time soon, a falling dollar, and another bad expected hurricane season (due to global warming) is what lies ahead.
So What is an Investor to Do?
Well, sad to say, but I don’t believe the worst is over. The temporary bounce we received mid-week was not the bounce I believe that has yet to come. I still believe that we will see a sharp, steep bounce sometime soon in response to the oversold market. But following that, I still believe that we may see the worst to come. Why? Just read the paragraph above. So in response, I have been shifting significant portions of my client’s into several areas for protection. If you had remained fully invested in these markets before they started tanking I would not recommend panicking and selling out now.
The biggest mistake individual investors make is panicking on market corrections and then buying back in after the market bounces back significantly. That’s the worst thing you could do. Sell low and buy high, but yet millions of investors will make that mistake in response to this weeks actions. But yet if you are mainly invested in Europe and the U.S., you need to rebalance your portfolio now because you will be punished for such short sightedness in the remainder of 2006. In fact, if you liquidated a good deal of assets before the plunge, I would look to buy partial (but not full) positions in some stocks now as a good deal of stocks are on sale right now. It pays to be brave when others are afraid (I think Warren Buffet said that).
Recently a new client transferred over a large portfolio and I immediately liquidated as much as I could, luckily liquidating before the second big drop in the global markets this week. His previous advisor did not own a single stock on the Brazilian, Canadian, London, Australian, Chinese, Mexican stock market. Not even one ADR either. Every single stock he owned was listed on the NYSE or S&P 500. These are the types of portfolios that will get punished over the remainder of the year. I recently read an article about a big producer at another American firm that recently shifted 70% of all his client’s assets into China, but all through Chinese mutual funds. I hate mutual funds, and the thought of owning mutual funds in emerging markets (but that’s an article for another time). People should always own stocks, not mutual funds. Mutual funds are the lazy way out and you’ll get punished for being lazy. It’s just not the way to benefit from these rapid growth markets.
So where should your money go? Due to all the political unrest, I’m looking at the defense sector. Due to continued globalization and the threat of new epidemics, I’m also looking at the healthcare and pharmaceutical sector. And due to all the geopolitical unrest, I’m looking at precious metals. Geographically, I’m looking for continuing opportunities in China of course, as well as some in Brazil, Australia, the U.K. and Canada. And the only U.S. companies I’d invest in other than the defense sector would be companies that have very wide global expansion initiatives. But I can’t discuss all of these ideas, so I’ll discuss one of my favorites –Precious metals.
PRECIOUS METALS
I’m not really sure but large investment firms by and large seem to ignore year after year, precious metals such as gold, silver, palladium, and others. However, in turbulent times, this asset class is one of the most valuable.
It’s not that the news doesn’t report on it. In fact, every night, in financial news reports, the closing price of commodities including gold is reported. However, at the end of the day, very few people ever seem to benefit from investing in the stocks (and not the commodities themselves) that benefit the most during precious metal bull markets.
LESSON #1: The average person does not understand the upside of investing in metals because it has never properly been explained to them
Many myths surround metals that cloud the truth about their value as an investment vehicle. Several of the most widespread myths include the following:
(1)Gold, silver and metals are risky speculative investments.
(2)The best way to buy gold and silver is to physically own the commodity.
(3)Gold is only an investment accessible to the extremely rich.
The definition of speculation according to Webster is the following: “the assumption of unusual business risk in hopes of obtaining commensurate gain”. Speculation is one of the most incorrectly used terms in investing. Investors in general stay away from trying to profit from bull markets in precious metals because of its speculative stigma. However, what is never explained to most investors is that the great majority of risk can be mitigated by employing intelligent analysis and intelligent buying and selling strategies.
Therefore, these investment opportunities should not be rated speculative but more accurately explained as moderate risk, high return opportunities. If you don’t perform intelligent analysis and intelligent buying and selling strategies, then investing in large company stocks, typically described as the “safest” of all investments, can become highly speculative as well. Large companies such as energy conglomerate Enron went belly up and investors lost every penny they had invested in this company. Stocks and bonds invested in “safe” companies such as Ford and Hyundai became risky this year when accounting scandals were uncovered that placed these company’s credit ratings on shaky ground.
Bonds are always described by financial consultants as “safe” investments and financial consultants will buy bonds for the overwhelming majority of their clients if they are over 60 years of age. But right now, bonds are probably one of the riskiest investments you could own. Bond prices go down as interest rates climb higher. Most likely interest rates will head higher from here, so that means the face value of bonds will decline. Bond prices are linked to U.S. dollars. The dollar is incredibly weak now and will possibly even become significantly weaker. And then there is credit risk. Accounting scandals are uncovered everyday.
And in case you’ve forgotten the “high quality” accompanies accused and investigated for fraudulent activity, in 2001 and 2002 alone, these companies included Adelphia, AOL Time Warner, Arthur Anderson, Bristol-Myers Squibb, Citigroup, ImClone, General Electric, JP Morgan, Lucent, Parmalat, Freddie Mac, Duke Energy, Dynergy, Enron, Global Crossing, Halliburton, K-Mart, Merck, Qwest Communications, Reliant Energy, Tyco, Worldcom, and Xerox to name a few. All were accused of falsifying their financials to make revenues or cash flows look better than they actually were. More recently, Ford, AIG, and Hyundai come to mind.
Think about how many more people would invest in an opportunity if they knew it was a moderate risk, high return opportunity versus a high risk, high return opportunity. To give you an example of exactly what I mean, let’s consider the following situation.
Opportunity A: Invest $10,000 in company ABC. Risk of investment: Low. Maximum upside: $1,000. Maximum downside: Capped at $1,500 by using a stop-loss of 15% (means that the stock automatically sells if it loses 15%).
Opportunity B: Invest $10,000 in a gold mining company. Risk of investment: Above average. Maximum upside: $25,000 to $100,000. Maximum downside: Capped at $4,000 by using a stop loss of 40%.
With Opportunity B, a greater downside risk exists but it also possesses a much much greater potential upside. Now even if we factor in the greater risk of Opportunity B, estimating that the downside loss scenario is twice as likely to happen (40%) when compared to Opportunity A (20%), the risk-adjusted numbers now look like this.
Risk-adjusted loss, Opportunity A: $1,500 * 20% = $300
Risk-adjusted loss, Opportunity B: $4,000 * 40% = $1,600
So on a risk-adjusted basis, for an additional risk of $1,300, you gain upside of $24,000 to $99,000 on potential return. Most people, if presented with an investment correctly in this manner, would take advantage of several Opportunity B type investments because of its much better risk/ reward equation. It wouldn’t be wise to engage in many opportunities like this, but several wagers such as these are more likely to pay off than not.
Myth (2) is also a reason most average investors don’t invest in gold and precious metals. Many people believe that one must physically buy gold and silver bullions to benefit from rising gold and silver prices and don’t want to deal with the hassle of safekeeping and buying bullions. However, now there are gold and silver ETFs (Exchange traded funds) that basically mimic the price of gold and silver. But even so, I still don’t believe it’s the best way to benefit from the uncertainty in the markets and in the geo-political sphere.
Owning gold and silver coins, rare coins that are in demand, is much better than owning physical gold or silver or the ETFs, because rare coins always appreciate in price over time and are often worth many many more times the cost of the actual gold and silver in the coins. So a gold coin that is worth $2,000 in underlying gold may sell for $8,000 or $10,000. This probably is the single best way to capitalize on precious metal bull markets, NOT buying actual gold or silver or the gold or silver ETFs. The second best way is to buy gold mining companies. Gold and silver mining companies often appreciate many more times the cost of their underlying asset during precious metal bull markets so are often a much better alternative to profit from a bull market in metals.
In the second part of this article, I’ll review the final two lessons about investing in precious metals.
© 2006 Global Market Opportunities
(May 18, 2006)
This article may be freely reprinted on another website as long as it is not modified, changed, or altered in any way and as long as the below author byline is included along with the active hyperlinks below:
J.S. Kim is the Managing Director of SmartKnowledgeU™ and editor of the SmartKnowledgeU™ investment newsletters. He is the inventor of the revolutionary SmartKnowledgeU™ investment strategies that are designed to grant the average investor a very high probability of earning 25% or more returns annually from his or her investment portfolio.
To learn how to build wealth from the coming investment crisis, click the following link, Use advanced wealth planning techniques to get rich!
Learn more about our investment newsletters here.
Visit our blog "The Underground Investor" for much more commentary on global markets.
expert: J.S.Kim
Hi-Yo, Silver Fund!
"Stay long precious metals" ...
I'm beginning to think that's Graeme Irvine's mantra.
He's the business columnist on Longer Life's Bourse page, and I'll leave it to you to discover his reasons for this four-word chant. Amidst Graeme's siren calls, I've taken notice of his recent daily listings of silver transfers. It seems that HSBC-Hong Kong is in the process of accumulating a substantially high percentage of the current market inventory. The range is something like 60%, an achievement I find as breathtaking as it is intriguing.
Why would that much of the world's investment-grade silver be moved to one depository? So far, I've not been able to find anyone willing to provide an answer. The accumulation is public knowledge, so I'm not suspecting a conspiracy.
I think most investors recall the Hunt brothers' clumsy attempt to corner the silver market three decades ago --- driving their Texan empire from billionaire to bankrupt within eight years --- and wouldn't think of trying to duplicate that stunt.
Super-investor Warren Buffet is, of course, much more sophisticated. His acquisition of 130million ounces of silver approximately nine years ago was made in tranches calculated to coincide with the market rather than drive it. All outward appearances indicate that he has no clandestine intentions; instead, he's simply substantiating his confidence in the metal and possible lack thereof in the long-term strength of the dollar.
Perhaps the HSBC-Hong Kong hoarding is a result of an announcement made in June 2005 by the United Kingdom's Barclay's Bank in which they filed their intent with the USA's Securities & Exchange Commission to establish an Exchange Trading Fund ('ETF') for silver. Specifically, the applicant is a Barclay's subsidiary, iShares Silver Trust, and the process gained momentum in January 2006 when the SEC approved their listing on the American Stock Exchange.
The Silver ETF is meeting with strong resistance, most notably by the Silver Users Association (SUA), who represent entities who make, sell and distribute products related to silver. Their complaint is that in order to support the ETF, so much silver would have to be taken out of the marketplace and held in reserve that its membership would be burdened by the metal's higher cost. As the SUA membership processes 80% of all silver produced in the USA, they represent a significant voice in this matter.
Ted Butler is one of the most respected silver analysts in the world. His opinion is that, no matter what the outcome of the Barclay's application, the entire episode is a positive development for silver investors.
First, let him explain how Exchange Trading Funds for commodities operate, and then describe how the Barclay's proposal is being positioned:
"In order to establish a commodity ETF, a financial institution buys and stores a quantity of the commodity in question and then issues shares of common stock at a fixed unit of conversion to represent fractional ownership of that commodity. In the case of silver, Barclays would buy the metal, in industry standard 1000oz bars, have them stored in London and elsewhere, and issue common stock shares in a ratio of one share of stock for every ten ounces of silver. The shares would then be traded on a recognized stock exchange, hence the name, exchange traded fund. In the case of the Barclay's Silver ETF ... they’ve even decided on the stock symbol, SLV. The amount of silver bought and stored would increase and decrease depending upon the investment demand for the shares, similar to how the gold ETFs currently function."
The practicalities of a silver ETF include:
- Stock certificates are certainly easier for the investor to store than the metal itself, and
- The 'common stock' format allows more categories of investors the eligibility to participate.
What is interesting about the Barclay's proposal is that its goal is to put 130million ounces of silver into reserve, the exact level of Warren Buffet's holdings. Could they be using that precedent as a model? Burton notes that even though Buffet was careful not to disrupt the market, the price of silver still doubled during that accumulation. Furthermore, Burton says, "I see nothing in the Barclays prospectus suggesting such buying restraint, either in time or price."
So, Butler reasons, this makes the situation most favorable for involved investors:
"This silver ETF announcement is a true win-win for silver investors. (If) their silver ETF becomes effective, the impact on the price of silver will be great. That’s win number one, obvious and straightforward.
"But if ... this ETF never sees the light of day, that will be a big win as well for silver investors. Why? Because it will prove for all to see just how critical the supply/demand and inventory situation is in silver. If the government says no way to this ETF, it will be for one reason only – there is not enough real silver in the world to fund it."
Either way, it's a development worth watching. Graeme lists the Comex figures daily at the end of his column and always mentions when another allotment of silver moves to HSBC-Hong Kong. The growth of those figures could well be the 'tracer' of things to come.
Stay long precious metals.
Copyright 2006 – The Longer Life Group
J Square Humboldt is the featured columnist at the Longer Life website, which is dedicated to providing information, strategies, analysis and commentary designed to improve the quality of living. His page can be found at http://longerlifegroup.com/cyberiter.html and his observations are published three times per week.
expert: J Square Humboldt
I'm beginning to think that's Graeme Irvine's mantra.
He's the business columnist on Longer Life's Bourse page, and I'll leave it to you to discover his reasons for this four-word chant. Amidst Graeme's siren calls, I've taken notice of his recent daily listings of silver transfers. It seems that HSBC-Hong Kong is in the process of accumulating a substantially high percentage of the current market inventory. The range is something like 60%, an achievement I find as breathtaking as it is intriguing.
Why would that much of the world's investment-grade silver be moved to one depository? So far, I've not been able to find anyone willing to provide an answer. The accumulation is public knowledge, so I'm not suspecting a conspiracy.
I think most investors recall the Hunt brothers' clumsy attempt to corner the silver market three decades ago --- driving their Texan empire from billionaire to bankrupt within eight years --- and wouldn't think of trying to duplicate that stunt.
Super-investor Warren Buffet is, of course, much more sophisticated. His acquisition of 130million ounces of silver approximately nine years ago was made in tranches calculated to coincide with the market rather than drive it. All outward appearances indicate that he has no clandestine intentions; instead, he's simply substantiating his confidence in the metal and possible lack thereof in the long-term strength of the dollar.
Perhaps the HSBC-Hong Kong hoarding is a result of an announcement made in June 2005 by the United Kingdom's Barclay's Bank in which they filed their intent with the USA's Securities & Exchange Commission to establish an Exchange Trading Fund ('ETF') for silver. Specifically, the applicant is a Barclay's subsidiary, iShares Silver Trust, and the process gained momentum in January 2006 when the SEC approved their listing on the American Stock Exchange.
The Silver ETF is meeting with strong resistance, most notably by the Silver Users Association (SUA), who represent entities who make, sell and distribute products related to silver. Their complaint is that in order to support the ETF, so much silver would have to be taken out of the marketplace and held in reserve that its membership would be burdened by the metal's higher cost. As the SUA membership processes 80% of all silver produced in the USA, they represent a significant voice in this matter.
Ted Butler is one of the most respected silver analysts in the world. His opinion is that, no matter what the outcome of the Barclay's application, the entire episode is a positive development for silver investors.
First, let him explain how Exchange Trading Funds for commodities operate, and then describe how the Barclay's proposal is being positioned:
"In order to establish a commodity ETF, a financial institution buys and stores a quantity of the commodity in question and then issues shares of common stock at a fixed unit of conversion to represent fractional ownership of that commodity. In the case of silver, Barclays would buy the metal, in industry standard 1000oz bars, have them stored in London and elsewhere, and issue common stock shares in a ratio of one share of stock for every ten ounces of silver. The shares would then be traded on a recognized stock exchange, hence the name, exchange traded fund. In the case of the Barclay's Silver ETF ... they’ve even decided on the stock symbol, SLV. The amount of silver bought and stored would increase and decrease depending upon the investment demand for the shares, similar to how the gold ETFs currently function."
The practicalities of a silver ETF include:
- Stock certificates are certainly easier for the investor to store than the metal itself, and
- The 'common stock' format allows more categories of investors the eligibility to participate.
What is interesting about the Barclay's proposal is that its goal is to put 130million ounces of silver into reserve, the exact level of Warren Buffet's holdings. Could they be using that precedent as a model? Burton notes that even though Buffet was careful not to disrupt the market, the price of silver still doubled during that accumulation. Furthermore, Burton says, "I see nothing in the Barclays prospectus suggesting such buying restraint, either in time or price."
So, Butler reasons, this makes the situation most favorable for involved investors:
"This silver ETF announcement is a true win-win for silver investors. (If) their silver ETF becomes effective, the impact on the price of silver will be great. That’s win number one, obvious and straightforward.
"But if ... this ETF never sees the light of day, that will be a big win as well for silver investors. Why? Because it will prove for all to see just how critical the supply/demand and inventory situation is in silver. If the government says no way to this ETF, it will be for one reason only – there is not enough real silver in the world to fund it."
Either way, it's a development worth watching. Graeme lists the Comex figures daily at the end of his column and always mentions when another allotment of silver moves to HSBC-Hong Kong. The growth of those figures could well be the 'tracer' of things to come.
Stay long precious metals.
Copyright 2006 – The Longer Life Group
J Square Humboldt is the featured columnist at the Longer Life website, which is dedicated to providing information, strategies, analysis and commentary designed to improve the quality of living. His page can be found at http://longerlifegroup.com/cyberiter.html and his observations are published three times per week.
expert: J Square Humboldt
Five Good Reasons to Invest in Gold
Financial markets have always been uncertain; it is the nature of the beast. But in today’s world of globalization, economic health can get more out of whack than ever before. This just might be a good time to smooth out some of that insecurity by investing in gold, also known as the money of last resort. Not only would you protect yourself against the falling dollar, but you could make a hefty profit in precious metals. Here are the best reasons for converting your money into gold:
• Troubled times in the United States’ fiscal gap.
As you read this, the US government is piling on more debt, which at the moment stands at $63 trillion. What does this mean for you? As the Federal Reserve continues to print more money, it will cut into the purchasing power of the dollar, and inflation will spin out of control. This happened to Germany following World War I, when it took a wheelbarrow of German marks to purchase one loaf of bread.
• Troubled times in the macroeconomic investment climate.
Kuwait has just announced that their currency will not be pegged to the dollar. China has sold off at least 1 billion in US Treasury Notes, as Venezuela and the United Arab Emirates replace their dollar reserves with the euro. The signal coming from other governments is a warning sign; our dependence on foreign bond buyers to finance domestic consumption is rapidly coming apart. The United States’ economy is held together with baling wire and duct tape.
• Supply and Demand.
While mining companies continue to extract gold, production cannot keep pace with demand. From 1992 to 2005 world output totaled 1.1 billion ounces. Reserves are barely half that size, and dwindling. Large mining companies must scramble to keep up production, turning to the junior mining segment for exploration and discovery. But between 1985 and 2003 new discoveries had slipped by 30 per cent. Basic economics tells us that when supply cannot meet demand, the value increases.
• Historical value.
Gold cannot be made. It is what it is. That is why the value of gold has been used for over 5,000 years. In his speech, Anthony S. Fell, a leading banker with the Royal Bank of Canada, stated the following:
“To some extent, I regret to say, all paper currencies are becoming somewhat suspect, and accordingly, it is my view that gold bullion, rather than being the barbarous relic described by John Maynard Keynes, may well become the asset of choice for many investors over the coming decade…notwithstanding the modest rise in gold prices over the past few years, that is where gold bullion is today, and it represents great opportunity.”
• Gold is the great stabilizer for all economies.
Gold inhibits governments from printing money and placing the citizenry in debt. It prevents the devaluation of currency brought about by inflation, and increases the wealth of nations. Gold provides protection from abusive usury, encourages savings, and puts and end to taxation and the exploitation of the world’s population.
Investing in precious metals is the only safe haven against a falling currency. The U.S. Dollar index has fallen 30 per cent since 2001, while gold and silver have more than doubled in value.
Since 1913, when the Federal Reserve became the issuer of American currency, the dollar has lost 98 per cent of its value.
The question arises, should you be investing in paper assets, or gold?
expert: Nancy Ayash
• Troubled times in the United States’ fiscal gap.
As you read this, the US government is piling on more debt, which at the moment stands at $63 trillion. What does this mean for you? As the Federal Reserve continues to print more money, it will cut into the purchasing power of the dollar, and inflation will spin out of control. This happened to Germany following World War I, when it took a wheelbarrow of German marks to purchase one loaf of bread.
• Troubled times in the macroeconomic investment climate.
Kuwait has just announced that their currency will not be pegged to the dollar. China has sold off at least 1 billion in US Treasury Notes, as Venezuela and the United Arab Emirates replace their dollar reserves with the euro. The signal coming from other governments is a warning sign; our dependence on foreign bond buyers to finance domestic consumption is rapidly coming apart. The United States’ economy is held together with baling wire and duct tape.
• Supply and Demand.
While mining companies continue to extract gold, production cannot keep pace with demand. From 1992 to 2005 world output totaled 1.1 billion ounces. Reserves are barely half that size, and dwindling. Large mining companies must scramble to keep up production, turning to the junior mining segment for exploration and discovery. But between 1985 and 2003 new discoveries had slipped by 30 per cent. Basic economics tells us that when supply cannot meet demand, the value increases.
• Historical value.
Gold cannot be made. It is what it is. That is why the value of gold has been used for over 5,000 years. In his speech, Anthony S. Fell, a leading banker with the Royal Bank of Canada, stated the following:
“To some extent, I regret to say, all paper currencies are becoming somewhat suspect, and accordingly, it is my view that gold bullion, rather than being the barbarous relic described by John Maynard Keynes, may well become the asset of choice for many investors over the coming decade…notwithstanding the modest rise in gold prices over the past few years, that is where gold bullion is today, and it represents great opportunity.”
• Gold is the great stabilizer for all economies.
Gold inhibits governments from printing money and placing the citizenry in debt. It prevents the devaluation of currency brought about by inflation, and increases the wealth of nations. Gold provides protection from abusive usury, encourages savings, and puts and end to taxation and the exploitation of the world’s population.
Investing in precious metals is the only safe haven against a falling currency. The U.S. Dollar index has fallen 30 per cent since 2001, while gold and silver have more than doubled in value.
Since 1913, when the Federal Reserve became the issuer of American currency, the dollar has lost 98 per cent of its value.
The question arises, should you be investing in paper assets, or gold?
expert: Nancy Ayash
Learn to Invest Money - Protect Your Stocks During Turbulent Times, Part II
This is a special article in response to the global market’s recent correction.
In the U.S., the Dow is down 4% , the Nasdaq about 6%, and the S&P 500 about 5% in a week. European stocks posted their biggest drop since May 2003, and the FTSE 100 in the UK had its biggest 2 day loss in 3 years. On the other hand, in Asia, as of May 11th, the HK Hang Seng index was up 22%, the South Korean index up 55%, the Australian markets up 31%, and China was up 50% before these markets also corrected with the global market correction in the past 7 days.
In addition, the U.S. is allocating $2 billion very soon to shore up its borders, major conflict still is going on in Iraq and Afghanistan, and Venezuela has increased the top royalty rates on oil to 33% from 16.67% after raising this rate from just 1% in October, 2004. In Bolivia, Evo Morales has followed his friend Chavez’s lead, and nationalized his country’s oil and natural gas resources. In Mexico, political unrest, according to subcomandante Marcos, is the worst since 1994 as it nears its next Presidential election. In Iran, the threat of nuclear confrontation with Israel and the United States looms, and returning to the U.S., record trade deficits that won’t turn around any time soon, a falling dollar, and another bad expected hurricane season (due to global warming) is what lies ahead.
So What is an Investor to Do?
In Part I of this article you learned the first lesson about hedging against turbulent markets by holding stocks in the precious metals sector. In Part II, I'll teach you the final two lessons.
LESSON #2: An examination of facts will remove much of the “speculative” cloud that hangs over investments in precious metals.
When financial consultants discuss the diversification of your stock portfolio, they always discuss standard industries like Transportation, Agriculture, Pharmaceuticals, Technology, Retail, Manufacturing, Energy & Utilities and so on. But they never discuss metals as an asset class.
Perhaps one reason they don’t is because of its label as a “speculative” investment as we have already discussed. Secondly, like every other asset, precious metals go through cycles and longer more drawn out cycles than the sectors people typically look at it in the stock market. For example I can only recall two great bull markets for gold and silver in my lifetime, including the one we are in the middle of right now. The last one was when gold rose in price from about $100 an ounce in 1976 to $850 an ounce in 1980 and silver peaked at about $50 an ounce that same year. Over the next 21 years, the metal markets were in decline. Gold declined from its peak of $850 to a low price of about $250 and silver slid from its high of around $50 to $4.
If we take the rate of gold and silver in 1980 and adjust those prices to today’s dollars for inflation, gold’s peak price was over $2,000 and silver was over $100. Looking at these figures, it is easy to see that it is not far-fetched for gold and silver to increase much higher than their current highs in April of 2006, although we will undoubtedly see one or two big pullbacks in price before it climbs higher. As of now, we are most likely in the second “consolidation” phase of the precious metal bull run before prices mount another run.
The reason that this lesson is so important is that some of the largest gains you will ever make from stock investing will come from investing in the gold exploration and development companies during bull runs in precious metals.
LESSON #3: The average person does not understand the upside or downside of investing in precious metal stocks because it has never properly been explained to them.
Lesson #1 is so critical that it is also the point of lesson #3. Every high school and university should have classes on how to benefit from not only precious metal bull markets like silver, gold, and palladium but how to benefit from global demand from commodities in general such as oil, natural gas, cotton, corn, sugar, uranium, steel and coal as well. But back to precious metals.
Occasionally, certain global conditions create a “perfect storm”. War, the threat of more war, developing countries asserting their independence, huge trade deficits in the largest global economy, and a weak U.S. dollar may cause cause great volatility and depression in the markets.
Most people either keep hoping for markets to rise again and keep losing money or pull their money out and hold it in cash (a situation that still leads to a loss of money because with inflation, currency always loses value over time). But what most people don’t realize is that when domestic currencies and domestic stocks are sinking, that precious metals often will rise considerably and that considerable gains can be earned by investing in the stocks that will benefit from this overlooked sector. Again, note that I do not recommend an investment in precious metals themselves, but in the companies that will benefit from the increasing value of these metals.
To illustrate what I mean, let me ask you a simple question. Do you know who Bill Gates and Warren Buffet are? Now let me ask you another question. Do you know who Ian Tellfer is? Probably not, right? But you should. Because he is like the Bill Gates of the precious metals world. And there are a handful of other people with Ian Telfer’s reputation in the mining industry. In fact, I discovered another person like Ian that currently holds an approximately $90 million stake in his own company’s shares. Combined with his reputation in the industry, that’s a good enough information for me to bet on his company’s success. Have you heard of Barrick Gold Corporation? If you asked 100 random people to name the world’s biggest gold producer, 90% or more probably could not. And it’s Barrick (though I don’t like Barrick as a stock to buy now for numerous reasons).
In 2006, the world’s central banks held about 31,000 tons of gold worth over half a trillion dollars. So this is no small industry that we are talking about. Yet nobody ever looks at this industry as an asset class like they do small cap stocks and large cap stocks. Also this asset class has a few huge players and hundreds of smaller players. And most people do not know about the smaller players because some 60% of gold mining companies are listed on the Canadian stock exchanges and not in the U.S. So while there is tremendous upside to investing in gold mining companies during precious metal bull markets there are also lots of land mines to navigate through.
Many companies that used to explore for different minerals all of a sudden change their name to include “Gold” in some way in their name in an attempt to sell more stock. Furthermore, many companies jump into the game with less than experienced personnel and technical experience in gold exploration or development and will lose tons of money. That’s why it is critical to understand the people who run the gold mining and precious metal mining companies that you buy. Even more so than with other types of companies. Gold mining stocks often jump on news of geographical surveys that show that the land they own is rich in gold deposits. But many companies will take the best drill samples from their findings and infer that all of the land they hold is of the same high grade, mineral rich content when this is far from the truth. That’s why you need to research the people running the company, see how long they’ve been in the business, discover their past successes and discover if their press releases have reasonable expectations of being reliable.
In the gold mining business, companies often also explore in difficult political environments such as Russia, Mongolia, Bolivia, Argentina, Africa, and sovereign Indian tribal grounds in Canada that make mining permits extremely difficult to secure. You need to be aware of the management team in place at these companies to gauge whether or not these companies have good chances of securing these permits or not (if these companies own mining rights in some of these “politically-difficult” geographic regions). In addition, the term “world-class gold deposits” is often abused in this industry in an attempt to pump up stock prices. As of May, 2006, there is no standard that regulates what this term means, so again, one must be very wary of press releases that state “ABC Gold company has secured rights to 500,000 acres of world-class gold deposits” because your interpretation of that statement may be drastically different than reality. So as you can see, this is not an easy sector to invest in and one that must be intensely researched before making decisions to invest in these companies.
A general rule that one can abide by, however, is to find out who the other “Bill Gates” of the mining industries are in addition to Ian Telfer. And if you find the companies that they advise and run, it will always be a safer bet to buy these types of companies. But while this asset class must be deeply researched, it is also one that historically has produced some of the largest returns an investor is likely to see during his or her lifetime during precious metal bull market runs. For this reason alone, despite the difficulties of investing in this asset class, it is one you should not ignore.
Let’s look and one last statistic to drive that last point home. In 2000, in what would be the first of the three worst years in the U.S. stock market since the Great Depression, only 1% of the total amount of money invested in the U.S. equity market was invested in gold stocks. That is not a misprint. 1%! Again part of this reason for this ridiculously low percentage is that most financial consultants never look to invest abroad or explain foreign stocks as risky, so therefore are not qualified to suggest foreign stocks to their clients. However, the true risk for the remainder of this year will be to not consider precious metals and to not consider global markets.
A FINAL WORD
So precious metals is one arena to definitely consider investing in right now. But this consideration comes with a heavy warning. This is a very complex industry to understand, and the smaller exploration companies are the ones that will move the highest but are also the most difficult to analyze. So if you enter, only do so with someone that you trust has the knowledge to do so. Or another novel idea. Perform the research yourself.
© 2006 Global Market Opportunities
(May 18, 2006)
This article may be freely reprinted on another website as long as it is not modified, changed, or altered in any way and as long as the below author byline is included along with the active hyperlinks below:
J.S. Kim is the Managing Director of SmartKnowledgeU™ and editor of the SmartKnowledgeU™ investment newsletters. He is the inventor of the revolutionary SmartKnowledgeU™ investment strategies that are designed to grant the average investor a very high probability of earning 25% or more returns annually from his or her investment portfolio.
To learn how to build wealth from the coming investment crisis, click the following link, Use advanced wealth planning techniques to get rich!
Learn more about our investment newsletters here.
Visit our blog "The Underground Investor" for much more commentary on global markets.
expert: J.S. Kim
In the U.S., the Dow is down 4% , the Nasdaq about 6%, and the S&P 500 about 5% in a week. European stocks posted their biggest drop since May 2003, and the FTSE 100 in the UK had its biggest 2 day loss in 3 years. On the other hand, in Asia, as of May 11th, the HK Hang Seng index was up 22%, the South Korean index up 55%, the Australian markets up 31%, and China was up 50% before these markets also corrected with the global market correction in the past 7 days.
In addition, the U.S. is allocating $2 billion very soon to shore up its borders, major conflict still is going on in Iraq and Afghanistan, and Venezuela has increased the top royalty rates on oil to 33% from 16.67% after raising this rate from just 1% in October, 2004. In Bolivia, Evo Morales has followed his friend Chavez’s lead, and nationalized his country’s oil and natural gas resources. In Mexico, political unrest, according to subcomandante Marcos, is the worst since 1994 as it nears its next Presidential election. In Iran, the threat of nuclear confrontation with Israel and the United States looms, and returning to the U.S., record trade deficits that won’t turn around any time soon, a falling dollar, and another bad expected hurricane season (due to global warming) is what lies ahead.
So What is an Investor to Do?
In Part I of this article you learned the first lesson about hedging against turbulent markets by holding stocks in the precious metals sector. In Part II, I'll teach you the final two lessons.
LESSON #2: An examination of facts will remove much of the “speculative” cloud that hangs over investments in precious metals.
When financial consultants discuss the diversification of your stock portfolio, they always discuss standard industries like Transportation, Agriculture, Pharmaceuticals, Technology, Retail, Manufacturing, Energy & Utilities and so on. But they never discuss metals as an asset class.
Perhaps one reason they don’t is because of its label as a “speculative” investment as we have already discussed. Secondly, like every other asset, precious metals go through cycles and longer more drawn out cycles than the sectors people typically look at it in the stock market. For example I can only recall two great bull markets for gold and silver in my lifetime, including the one we are in the middle of right now. The last one was when gold rose in price from about $100 an ounce in 1976 to $850 an ounce in 1980 and silver peaked at about $50 an ounce that same year. Over the next 21 years, the metal markets were in decline. Gold declined from its peak of $850 to a low price of about $250 and silver slid from its high of around $50 to $4.
If we take the rate of gold and silver in 1980 and adjust those prices to today’s dollars for inflation, gold’s peak price was over $2,000 and silver was over $100. Looking at these figures, it is easy to see that it is not far-fetched for gold and silver to increase much higher than their current highs in April of 2006, although we will undoubtedly see one or two big pullbacks in price before it climbs higher. As of now, we are most likely in the second “consolidation” phase of the precious metal bull run before prices mount another run.
The reason that this lesson is so important is that some of the largest gains you will ever make from stock investing will come from investing in the gold exploration and development companies during bull runs in precious metals.
LESSON #3: The average person does not understand the upside or downside of investing in precious metal stocks because it has never properly been explained to them.
Lesson #1 is so critical that it is also the point of lesson #3. Every high school and university should have classes on how to benefit from not only precious metal bull markets like silver, gold, and palladium but how to benefit from global demand from commodities in general such as oil, natural gas, cotton, corn, sugar, uranium, steel and coal as well. But back to precious metals.
Occasionally, certain global conditions create a “perfect storm”. War, the threat of more war, developing countries asserting their independence, huge trade deficits in the largest global economy, and a weak U.S. dollar may cause cause great volatility and depression in the markets.
Most people either keep hoping for markets to rise again and keep losing money or pull their money out and hold it in cash (a situation that still leads to a loss of money because with inflation, currency always loses value over time). But what most people don’t realize is that when domestic currencies and domestic stocks are sinking, that precious metals often will rise considerably and that considerable gains can be earned by investing in the stocks that will benefit from this overlooked sector. Again, note that I do not recommend an investment in precious metals themselves, but in the companies that will benefit from the increasing value of these metals.
To illustrate what I mean, let me ask you a simple question. Do you know who Bill Gates and Warren Buffet are? Now let me ask you another question. Do you know who Ian Tellfer is? Probably not, right? But you should. Because he is like the Bill Gates of the precious metals world. And there are a handful of other people with Ian Telfer’s reputation in the mining industry. In fact, I discovered another person like Ian that currently holds an approximately $90 million stake in his own company’s shares. Combined with his reputation in the industry, that’s a good enough information for me to bet on his company’s success. Have you heard of Barrick Gold Corporation? If you asked 100 random people to name the world’s biggest gold producer, 90% or more probably could not. And it’s Barrick (though I don’t like Barrick as a stock to buy now for numerous reasons).
In 2006, the world’s central banks held about 31,000 tons of gold worth over half a trillion dollars. So this is no small industry that we are talking about. Yet nobody ever looks at this industry as an asset class like they do small cap stocks and large cap stocks. Also this asset class has a few huge players and hundreds of smaller players. And most people do not know about the smaller players because some 60% of gold mining companies are listed on the Canadian stock exchanges and not in the U.S. So while there is tremendous upside to investing in gold mining companies during precious metal bull markets there are also lots of land mines to navigate through.
Many companies that used to explore for different minerals all of a sudden change their name to include “Gold” in some way in their name in an attempt to sell more stock. Furthermore, many companies jump into the game with less than experienced personnel and technical experience in gold exploration or development and will lose tons of money. That’s why it is critical to understand the people who run the gold mining and precious metal mining companies that you buy. Even more so than with other types of companies. Gold mining stocks often jump on news of geographical surveys that show that the land they own is rich in gold deposits. But many companies will take the best drill samples from their findings and infer that all of the land they hold is of the same high grade, mineral rich content when this is far from the truth. That’s why you need to research the people running the company, see how long they’ve been in the business, discover their past successes and discover if their press releases have reasonable expectations of being reliable.
In the gold mining business, companies often also explore in difficult political environments such as Russia, Mongolia, Bolivia, Argentina, Africa, and sovereign Indian tribal grounds in Canada that make mining permits extremely difficult to secure. You need to be aware of the management team in place at these companies to gauge whether or not these companies have good chances of securing these permits or not (if these companies own mining rights in some of these “politically-difficult” geographic regions). In addition, the term “world-class gold deposits” is often abused in this industry in an attempt to pump up stock prices. As of May, 2006, there is no standard that regulates what this term means, so again, one must be very wary of press releases that state “ABC Gold company has secured rights to 500,000 acres of world-class gold deposits” because your interpretation of that statement may be drastically different than reality. So as you can see, this is not an easy sector to invest in and one that must be intensely researched before making decisions to invest in these companies.
A general rule that one can abide by, however, is to find out who the other “Bill Gates” of the mining industries are in addition to Ian Telfer. And if you find the companies that they advise and run, it will always be a safer bet to buy these types of companies. But while this asset class must be deeply researched, it is also one that historically has produced some of the largest returns an investor is likely to see during his or her lifetime during precious metal bull market runs. For this reason alone, despite the difficulties of investing in this asset class, it is one you should not ignore.
Let’s look and one last statistic to drive that last point home. In 2000, in what would be the first of the three worst years in the U.S. stock market since the Great Depression, only 1% of the total amount of money invested in the U.S. equity market was invested in gold stocks. That is not a misprint. 1%! Again part of this reason for this ridiculously low percentage is that most financial consultants never look to invest abroad or explain foreign stocks as risky, so therefore are not qualified to suggest foreign stocks to their clients. However, the true risk for the remainder of this year will be to not consider precious metals and to not consider global markets.
A FINAL WORD
So precious metals is one arena to definitely consider investing in right now. But this consideration comes with a heavy warning. This is a very complex industry to understand, and the smaller exploration companies are the ones that will move the highest but are also the most difficult to analyze. So if you enter, only do so with someone that you trust has the knowledge to do so. Or another novel idea. Perform the research yourself.
© 2006 Global Market Opportunities
(May 18, 2006)
This article may be freely reprinted on another website as long as it is not modified, changed, or altered in any way and as long as the below author byline is included along with the active hyperlinks below:
J.S. Kim is the Managing Director of SmartKnowledgeU™ and editor of the SmartKnowledgeU™ investment newsletters. He is the inventor of the revolutionary SmartKnowledgeU™ investment strategies that are designed to grant the average investor a very high probability of earning 25% or more returns annually from his or her investment portfolio.
To learn how to build wealth from the coming investment crisis, click the following link, Use advanced wealth planning techniques to get rich!
Learn more about our investment newsletters here.
Visit our blog "The Underground Investor" for much more commentary on global markets.
expert: J.S. Kim
The Truth About Platinum
Is platinum a new metal?
After all, in the past, one would associate diamonds with gold. Nowadays, the most expensive fine jewelry designs set diamonds in platinum.
The truth is, platinum has been on this earth for billions of years. This brilliant metal really came from the skies. Meteorites contain platinum and meteorites have been landing on earth for billions of years already.
Kind of romantic if you think about it.
That pure white platinum jewelry could once have been part of a star. Part of a meteorite that travelled through space before it landed in our world.
Ironically, there was a time when platinum was thought to be an inferior metal by people searching for gold. Platinum looks like silver, so in 1590, when the Spanish discovered platinum, they named it platina, which means little silver. The newly rediscovered platinum was thrown back into the river, its value totally misunderstood at that time.
2 centuries later, King Louis XVI of France declared platinum to be the only metal fit for kings. Thus began the love of platinum by the royals. In fact, the late Queen Mother, Queen Elisabeth's crown was made of platinum. Owning a piece of platinum jewelry today gives you something in common with the royals. Both you and the royals wear platinum.
Even Hollywood Royalty appreciates the value of platinum. The King, Elvis Presley exchanged platinum wedding rings with his wife Priscilla. Joe Dimaggio gave Marilyn Monroe 3 carat solitaire diamond platinum engagement ring. Movie legends would set their diamonds in platinum. In fact, diamond platinum engagement rings are the preferred engagement rings of the well heeled.
Platinum is a special metal. It does not fade or tarnish. It does not corrode. In fact, it is so lasting, platinum was used to make the standard kilogram weight. Platinum is eternal. Diamonds are eternal. That is one of the reasons why diamonds and platinum are the perfect match.
Another reason why diamonds an platinum go together is the color of platinum. Platinum is a brilliant white. Diamonds are graded on their color among other factors. The whiter the diamond, the higher its value. When a diamond is set in platinum, the whiteness of the platinum makes the diamond look whiter, brighter, more precious.
Platinum is extremely pliable. It can be drawn into a very fine wire very easily. Yet it is so strong. That means jewellers can create very intricate jewelry pieces with platinum. Jewellers can create fine prongs with platinum with which to hold the diamond, yet these thin prongs are so strong they hold the diamond securely.
Diamonds aside, platinum is the metal of choice for anyone who has sensitive skin. Jewelry rash can occur even with gold jewelry. The impurities in most other metals, including gold, can cause a rash. The rash could even happen years later, after wearing the jewelry daily for long periods of time.
Platinum wearers don't have to worry about jewelry rash. Platinum is 95% pure. Platinum is hypoallergenic, so the best way to deal with a jewelry rash is to switch to platinum.
The problem with platinum is that it is so rare. It is 35 times rarer than gold. There is so little platinum on earth, yet its uses are so wide. Because platinum is compatible with the human body, platinum is used in medicine, to make pace makers, for example. Platinum is also a catalyst and is essential in many chemical processes. Platinum is such a precious metal that during World War II, U.S. banned platinum from being used for any non-military purpose. That is why, for so many years, platinum was not used in jewelry making.
Due to its rarity, platinum is an excellent precious metal to invest in. Anything that is so rare and has so many uses would appreciate in price, with time, which makes platinum jewelry a wise investment.
The writer is the webmaster of Platinum Jewelry , where you can buy truly exquisite platinum jewelry online.
expert: Janice Wee
After all, in the past, one would associate diamonds with gold. Nowadays, the most expensive fine jewelry designs set diamonds in platinum.
The truth is, platinum has been on this earth for billions of years. This brilliant metal really came from the skies. Meteorites contain platinum and meteorites have been landing on earth for billions of years already.
Kind of romantic if you think about it.
That pure white platinum jewelry could once have been part of a star. Part of a meteorite that travelled through space before it landed in our world.
Ironically, there was a time when platinum was thought to be an inferior metal by people searching for gold. Platinum looks like silver, so in 1590, when the Spanish discovered platinum, they named it platina, which means little silver. The newly rediscovered platinum was thrown back into the river, its value totally misunderstood at that time.
2 centuries later, King Louis XVI of France declared platinum to be the only metal fit for kings. Thus began the love of platinum by the royals. In fact, the late Queen Mother, Queen Elisabeth's crown was made of platinum. Owning a piece of platinum jewelry today gives you something in common with the royals. Both you and the royals wear platinum.
Even Hollywood Royalty appreciates the value of platinum. The King, Elvis Presley exchanged platinum wedding rings with his wife Priscilla. Joe Dimaggio gave Marilyn Monroe 3 carat solitaire diamond platinum engagement ring. Movie legends would set their diamonds in platinum. In fact, diamond platinum engagement rings are the preferred engagement rings of the well heeled.
Platinum is a special metal. It does not fade or tarnish. It does not corrode. In fact, it is so lasting, platinum was used to make the standard kilogram weight. Platinum is eternal. Diamonds are eternal. That is one of the reasons why diamonds and platinum are the perfect match.
Another reason why diamonds an platinum go together is the color of platinum. Platinum is a brilliant white. Diamonds are graded on their color among other factors. The whiter the diamond, the higher its value. When a diamond is set in platinum, the whiteness of the platinum makes the diamond look whiter, brighter, more precious.
Platinum is extremely pliable. It can be drawn into a very fine wire very easily. Yet it is so strong. That means jewellers can create very intricate jewelry pieces with platinum. Jewellers can create fine prongs with platinum with which to hold the diamond, yet these thin prongs are so strong they hold the diamond securely.
Diamonds aside, platinum is the metal of choice for anyone who has sensitive skin. Jewelry rash can occur even with gold jewelry. The impurities in most other metals, including gold, can cause a rash. The rash could even happen years later, after wearing the jewelry daily for long periods of time.
Platinum wearers don't have to worry about jewelry rash. Platinum is 95% pure. Platinum is hypoallergenic, so the best way to deal with a jewelry rash is to switch to platinum.
The problem with platinum is that it is so rare. It is 35 times rarer than gold. There is so little platinum on earth, yet its uses are so wide. Because platinum is compatible with the human body, platinum is used in medicine, to make pace makers, for example. Platinum is also a catalyst and is essential in many chemical processes. Platinum is such a precious metal that during World War II, U.S. banned platinum from being used for any non-military purpose. That is why, for so many years, platinum was not used in jewelry making.
Due to its rarity, platinum is an excellent precious metal to invest in. Anything that is so rare and has so many uses would appreciate in price, with time, which makes platinum jewelry a wise investment.
The writer is the webmaster of Platinum Jewelry , where you can buy truly exquisite platinum jewelry online.
expert: Janice Wee
Platinum And Its Uses
Platinum has been making its way into American culture as the use of it in jewelry has grown substantially in the past ten years. If you have priced jewelry recently you know this precious white metal is even more costly than gold. So what is platinum and how long has it been around?
Platinum is a member of the 'platinum metals' family, along with ruthenium, rhodium, palladium, osmium, and iridium. Platinum jewelry dates back to Egyptian tombs in 1200 BC where it was imported from Nubia. In 700 BC, the high priestess Shepenupet was buried in a sarcophagus decorated in gold and platinum hieroglyphics. Platinum was also found in South America, dating back to 100 BC; the Incas created ceremonial jewelry from both gold and platinum.
In 1751, Theophil Scheffer, a Swedish scientist, recognized its unique properties and rarity and declared it a precious metal.
The metal started to gain popularity in industrial use because of its strength and that it was chemically inert. Soon, the metal was being used in gun parts, sophisticated batteries and fuel cells, in neurosurgical and dental apparatus and most importantly as an auto catalyst, converting harmful emissions into carbon dioxide and water.
Because of the metal's ability to help the environment with its emission in catalytic converters, it soon became dubbed the 'environmental metal.' And with the growing concern around the environment and emissions, the demand for the metal continues to grow.
Although there have been many uses for platinum, mining the needed amount to meet demand has been difficult. Statistics state that between 5 and 6 million ounces of new platinum are reaching the world market each year, which is less than 5% of gold production. Much of the platinum that is mined comes from South Africa and Russia.
In the late 1990s, when platinum traded at a price close to gold, the U.S. Mint added Platinum Eagles to complement its Gold Eagles and Silver Eagles. Canada also produced a Platinum Maple Leaf and Australia minted the Platinum Koalas. The launch of the Platinum Eagle brought a near doubling in investment demand and the coin quickly became the most popular platinum coin in the world. Proof Platinum American Eagles, when first released sold out.
In 1999, the Chinese platinum jewelry market was also booming. The metal also became the most requested in the Japanese bridal market and later skyrocketed in North America.
Currently, platinum is also being used in electronic devices like iPods and computer hard discs. Asian manufacturers are using the metal to create flat-panel glass in computer and television screens.
With the strong demand for platinum, investors and consumers alike have driven up the price to almost double that of gold. With supply low and demand high, it seems the value of platinum won't end anytime soon.
BullionDirect is a leading online source to buy and sell precious metals, including gold, silver, platinum, and palladium coins and bars. For more information please visit www.bulliondirect.com.
expert: Josh White
Platinum is a member of the 'platinum metals' family, along with ruthenium, rhodium, palladium, osmium, and iridium. Platinum jewelry dates back to Egyptian tombs in 1200 BC where it was imported from Nubia. In 700 BC, the high priestess Shepenupet was buried in a sarcophagus decorated in gold and platinum hieroglyphics. Platinum was also found in South America, dating back to 100 BC; the Incas created ceremonial jewelry from both gold and platinum.
In 1751, Theophil Scheffer, a Swedish scientist, recognized its unique properties and rarity and declared it a precious metal.
The metal started to gain popularity in industrial use because of its strength and that it was chemically inert. Soon, the metal was being used in gun parts, sophisticated batteries and fuel cells, in neurosurgical and dental apparatus and most importantly as an auto catalyst, converting harmful emissions into carbon dioxide and water.
Because of the metal's ability to help the environment with its emission in catalytic converters, it soon became dubbed the 'environmental metal.' And with the growing concern around the environment and emissions, the demand for the metal continues to grow.
Although there have been many uses for platinum, mining the needed amount to meet demand has been difficult. Statistics state that between 5 and 6 million ounces of new platinum are reaching the world market each year, which is less than 5% of gold production. Much of the platinum that is mined comes from South Africa and Russia.
In the late 1990s, when platinum traded at a price close to gold, the U.S. Mint added Platinum Eagles to complement its Gold Eagles and Silver Eagles. Canada also produced a Platinum Maple Leaf and Australia minted the Platinum Koalas. The launch of the Platinum Eagle brought a near doubling in investment demand and the coin quickly became the most popular platinum coin in the world. Proof Platinum American Eagles, when first released sold out.
In 1999, the Chinese platinum jewelry market was also booming. The metal also became the most requested in the Japanese bridal market and later skyrocketed in North America.
Currently, platinum is also being used in electronic devices like iPods and computer hard discs. Asian manufacturers are using the metal to create flat-panel glass in computer and television screens.
With the strong demand for platinum, investors and consumers alike have driven up the price to almost double that of gold. With supply low and demand high, it seems the value of platinum won't end anytime soon.
BullionDirect is a leading online source to buy and sell precious metals, including gold, silver, platinum, and palladium coins and bars. For more information please visit www.bulliondirect.com.
expert: Josh White
2006 Was Huge For Uranium - 2007 Could Be Even Better!
As we enter a new year, we marvel at the mass media for once again missing the boat when it comes to investment news stories for 2006.According to the mass media, the Dow breaking into a new high was the story or the year. The Dow was up 14.7% last year which was an excellent year for the index. But uranium was up almost 100% (97%) last year. We have had a number of readers ask us why we are not more heavily invested in the mainstream markets; our answer is that we prefer 100% gains to 14.7% gains.
Amazing at it may seem, the fact that uranium has jumped up over 600% in 3 years, you would think that the main stream investors and media would take notice. But to date, we have seen very little in the way of coverage of this amazing bull market. The fact that uranium has not had one pull back in this entire run, and there is virtually no media coverage tells us that we are still very early in this bull market.
One of the aspects that we are very excited about is that the stocks have not kept up with the metal price. We are expecting some phenomenal jumps in share prices, maybe very soon, in order for the stocks to catch up to the metal. We have seen some of these stocks move lately, but there is more to come.
Remember that the fundamentals for uranium are still very strong today.
• There currently 445 Nuclear plants operating in the world today. There are 178 more pants under construction, planned or proposed. If all come on line, this would be a 40% increase.
• Nuclear power plants must have uranium in order to operate. Without uranium it is lights out for these Nuclear Plants.
• The cost of uranium in the overall cost of running the nuclear facility, is minimal compared to other fuel sources. As the cost of uranium increases, the impact on the cost of the nuclear plant is minimal. This is not the case with other forms of energy.
• Uranium also has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradable commodity.
• Morgan Stanley documented that “mining fails to keep pace with demand. Uranium mine production in 2003 satisfied only 53% of our estimated demand for uranium. The balance of demand was met from stock depletion and dilution of weapons grade highly enriched uranium.” After the cigar lake flooding, there are no new large supplies of uranium scheduled to come into production until at least 2010.
One possible setback is the announcement that the Department of Energy planned to sell off some of its decommissioned nuclear weapons uranium. Although this suggests that prices could drop, when the announcement was made, the price of uranium went up, not down. Should we get a correction in the uranium prices, which we feel is unlikely, then this would be another excellent buying opportunity. We want to make it very clear to our subscribers, that we are still very bullish of uranium. Until we see the mass media and then the mass investors start to take notice, we will remain bullish. Uranium is still page 16 news, if it gets any at all. Until it works its way to page 1, we are riding this bull market out. Remember our keys to success are maximizing profits and minimizing losses.
For those who have not yet jumped on this band wagon we do not believe that it is too late to make good profits. The fundamentals are still very strong. And until we see this bull market start to get the coverage that it will get, it is still early in this bull market.
Although uranium is far from page 1 news, it is getting some coverage in the media. In a Bloomberg article we see that Merrill Lynch has raised its 2008 uranium price forecast by 78%, due to the Cigar Lake disaster and new demand coming form China and India. “ In their December 8th report, they are now predicting the average price in 2007 to be $75 a pound and $80 in 2008. Merrill Lynch notes that this year uranium had averaged $46 a pound, so their new view is rather impressive for uranium stock holders. “We do not see a major trigger on the horizon that will force spot prices down” says the Merrill Lynch analyst. “
“The delay of Cigar Lake and the immanent arrival of India into the commercial fuel market have created a notable increase in demand.” At the end of November, 28 plants were under construction with a further 62 ordered or planned. India, which runs 16 reactors, is building another 7. Merrill Lynch had expected 2008 prices to decline after averaging $53 in 2007.”
In another article we see that Scotiabank Vice President, Industry and Commodity Market Research, Patricia Mohr has forecast uranium and zinc as her top picks for investors in 2007, with precious metals, particularly silver, expected to benefit from further weakness in the U.S. dollar. In her recently published analysis, Mohr said “uranium was the third-best performing commodity this year “and will likely be the top performer in 2007.” She forecast that spot uranium prices are expected to average US$80 a pound in 2008, possibly ending 2007 close to $90.
“The current upswing in uranium prices represents a ‘secular’ transformational change in global energy markets related partly to a shift by utilities from high-priced fossil fuels-rather than a ‘cyclical’ upswing,” Mohr asserted. “Nuclear energy is used for ‘base load’ electricity generation and will be little affected by an expected modest slowdown in global growth in 2007 (4.7% down from 5.2% in 2006), using ‘purchasing power parity’ estimates.”
This uranium bull market will come to an end and the profits will be tougher to get, but for now we are still very bullish on this market. Things could start moving much quicker as we move forward so we are looking to a great year for uranium in 2007.
To subscribe go to www.thetrendletter.com.
Martin Straith - www.thetrendletter.com.
expert: Martin Straith
Amazing at it may seem, the fact that uranium has jumped up over 600% in 3 years, you would think that the main stream investors and media would take notice. But to date, we have seen very little in the way of coverage of this amazing bull market. The fact that uranium has not had one pull back in this entire run, and there is virtually no media coverage tells us that we are still very early in this bull market.
One of the aspects that we are very excited about is that the stocks have not kept up with the metal price. We are expecting some phenomenal jumps in share prices, maybe very soon, in order for the stocks to catch up to the metal. We have seen some of these stocks move lately, but there is more to come.
Remember that the fundamentals for uranium are still very strong today.
• There currently 445 Nuclear plants operating in the world today. There are 178 more pants under construction, planned or proposed. If all come on line, this would be a 40% increase.
• Nuclear power plants must have uranium in order to operate. Without uranium it is lights out for these Nuclear Plants.
• The cost of uranium in the overall cost of running the nuclear facility, is minimal compared to other fuel sources. As the cost of uranium increases, the impact on the cost of the nuclear plant is minimal. This is not the case with other forms of energy.
• Uranium also has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradable commodity.
• Morgan Stanley documented that “mining fails to keep pace with demand. Uranium mine production in 2003 satisfied only 53% of our estimated demand for uranium. The balance of demand was met from stock depletion and dilution of weapons grade highly enriched uranium.” After the cigar lake flooding, there are no new large supplies of uranium scheduled to come into production until at least 2010.
One possible setback is the announcement that the Department of Energy planned to sell off some of its decommissioned nuclear weapons uranium. Although this suggests that prices could drop, when the announcement was made, the price of uranium went up, not down. Should we get a correction in the uranium prices, which we feel is unlikely, then this would be another excellent buying opportunity. We want to make it very clear to our subscribers, that we are still very bullish of uranium. Until we see the mass media and then the mass investors start to take notice, we will remain bullish. Uranium is still page 16 news, if it gets any at all. Until it works its way to page 1, we are riding this bull market out. Remember our keys to success are maximizing profits and minimizing losses.
For those who have not yet jumped on this band wagon we do not believe that it is too late to make good profits. The fundamentals are still very strong. And until we see this bull market start to get the coverage that it will get, it is still early in this bull market.
Although uranium is far from page 1 news, it is getting some coverage in the media. In a Bloomberg article we see that Merrill Lynch has raised its 2008 uranium price forecast by 78%, due to the Cigar Lake disaster and new demand coming form China and India. “ In their December 8th report, they are now predicting the average price in 2007 to be $75 a pound and $80 in 2008. Merrill Lynch notes that this year uranium had averaged $46 a pound, so their new view is rather impressive for uranium stock holders. “We do not see a major trigger on the horizon that will force spot prices down” says the Merrill Lynch analyst. “
“The delay of Cigar Lake and the immanent arrival of India into the commercial fuel market have created a notable increase in demand.” At the end of November, 28 plants were under construction with a further 62 ordered or planned. India, which runs 16 reactors, is building another 7. Merrill Lynch had expected 2008 prices to decline after averaging $53 in 2007.”
In another article we see that Scotiabank Vice President, Industry and Commodity Market Research, Patricia Mohr has forecast uranium and zinc as her top picks for investors in 2007, with precious metals, particularly silver, expected to benefit from further weakness in the U.S. dollar. In her recently published analysis, Mohr said “uranium was the third-best performing commodity this year “and will likely be the top performer in 2007.” She forecast that spot uranium prices are expected to average US$80 a pound in 2008, possibly ending 2007 close to $90.
“The current upswing in uranium prices represents a ‘secular’ transformational change in global energy markets related partly to a shift by utilities from high-priced fossil fuels-rather than a ‘cyclical’ upswing,” Mohr asserted. “Nuclear energy is used for ‘base load’ electricity generation and will be little affected by an expected modest slowdown in global growth in 2007 (4.7% down from 5.2% in 2006), using ‘purchasing power parity’ estimates.”
This uranium bull market will come to an end and the profits will be tougher to get, but for now we are still very bullish on this market. Things could start moving much quicker as we move forward so we are looking to a great year for uranium in 2007.
To subscribe go to www.thetrendletter.com.
Martin Straith - www.thetrendletter.com.
expert: Martin Straith
Platinum Chains
With gold or silver chains, the clasp often breaks since it is unable to withstand the pressure of normal wear and tear. Platinum jewelry chains provide a solution to this problem. Precious metals always contain other metal alloys to create strength and pliability.
Platinum is almost 95% pure whereas eighteen karat gold is 75% pure. Platinum is alloyed with five to ten percent of iridium or ruthenium, both precious metals in the platinum group, making it extremely tough. Platinum jewelry chains are very popular with men as well as with women.
Platinum chains are also used in the health care industry because of their advantages over other inert metals. Flexible platinum chain implants produce better results with fewer complications in surgeries compared to standard rigid gold implants. Platinum chains and wires are not only used in the health care sector but also in the industrial sector because of their high tensile strength, malleability, and anti-oxidation properties.
Another important feature of platinum is its high melting point, which makes it ideal for use in industries where metals have to undergo extreme temperatures on an everyday basis. However, platinum chains are usually used in making jewelry because the metal does not corrode and can be worn anywhere without worrying about wear and tear. Another important property of this metal is that it is soft compared to other precious metals such as gold and silver. This means that it can be molded into any shape and can endure rough use.
Platinum chains are a little heavier than other precious metals, such as gold and silver. However, other advantages overshadow any drawbacks that these chains possess. Platinum jewelry and chains are becoming popular, and the price of this metal is definitely increasing and will most probably continue to escalate. Therefore, investment in platinum jewelry is a good option, compared to investments in gold or silver.
Platinum provides detailed information on Platinum, Platinum Wedding Rings, Platinum Engagement Rings, Platinum Jewelry and more. Platinum is affiliated with Mens Platinum Wedding Rings.
expert: Damian Sofsian
Platinum is almost 95% pure whereas eighteen karat gold is 75% pure. Platinum is alloyed with five to ten percent of iridium or ruthenium, both precious metals in the platinum group, making it extremely tough. Platinum jewelry chains are very popular with men as well as with women.
Platinum chains are also used in the health care industry because of their advantages over other inert metals. Flexible platinum chain implants produce better results with fewer complications in surgeries compared to standard rigid gold implants. Platinum chains and wires are not only used in the health care sector but also in the industrial sector because of their high tensile strength, malleability, and anti-oxidation properties.
Another important feature of platinum is its high melting point, which makes it ideal for use in industries where metals have to undergo extreme temperatures on an everyday basis. However, platinum chains are usually used in making jewelry because the metal does not corrode and can be worn anywhere without worrying about wear and tear. Another important property of this metal is that it is soft compared to other precious metals such as gold and silver. This means that it can be molded into any shape and can endure rough use.
Platinum chains are a little heavier than other precious metals, such as gold and silver. However, other advantages overshadow any drawbacks that these chains possess. Platinum jewelry and chains are becoming popular, and the price of this metal is definitely increasing and will most probably continue to escalate. Therefore, investment in platinum jewelry is a good option, compared to investments in gold or silver.
Platinum provides detailed information on Platinum, Platinum Wedding Rings, Platinum Engagement Rings, Platinum Jewelry and more. Platinum is affiliated with Mens Platinum Wedding Rings.
expert: Damian Sofsian
10 Simple Tips For Attaining Wealth
What with the millions of words printed every day about "How To Achieve Success," why aren't there more new millionaires.
Basically, it's simply because the people reading this "How-To" information don't understand what they read, or else just don't have the drive it takes to put what they've read into action. In truth, it would seem that everyone wants to "find out how to become rich," but the number of people with the drive it takes to "work a plan," is few and far between.
The Basics to Getting Rich can be stated simply as follows:
1. You must control your investment. This is the key to building a fortune from small capital. You have to have the ability and knowledge to make the right moves at the right time, and above all, the innate talent it takes to always land on your feet and never be wiped out, regardless of the setbacks you may encounter.
2. You must know how and where to buy for next to nothing - or produce a product from scratch - and sell at a tremendous profit. With this ability, you can start with $100 or less, and sell it to someone else for much more than you paid for it. Then do it again, and keep on doing it until you have enough money to make substantial investments in other area where your money will grow and prosper.
3. You must buy things that appreciate in value. In other words, learn to buy things that will grow in value as time goes on. Things such as collectibles, land, precious metals and stones. Think of the multiplication factor: You pay $10 for a copyright, sell 500 copies and you're off to a small fortune.
4. You've got to be choosy. Buy the original or pick a limited field. For instance, if you buy written material, buy form the author; or if you're into stamps or coins, work with just one country or type of coins/stamps.
5. You must become an expert in your field of selling - know all there is to know about it. It takes time, effort, and energy, but the financial rewards are worth it.
6. You must know how to work the tax shelters. In the confiscatory tax economy we operate in today, anyone attempting to make important money has to operate with every tax break he can get. There are many of them, and they can be applied in different ways. Make friends with a good tax accountant; he'll be able to give you many angles that you've probably never heard of. Be sure you take every advantage of capital gains, investment credits, take part of your rent or house payment as an office expense, as well as your car - get all you can. It's legal, and it's necessary if you're going to build your capital.
7. You have to set goals and dedicate yourself to attaining those goals. In just about any buy/sell program, you can set a rate of say 20% net profit on each transaction, and work a five-time-a-year turnover. This will double your capital each year. Now the net profit means just that - what is yours after all expenses and taxes are paid - so you'll have to get about 35 to 40% markup on each cycle.
If you've done your homework and are really an expert in your field, you'll often be able to make profits of 200% and more on a single transaction, because real buys will always show up for the person with cash in hand. If you set a goal such as this, and follow this system starting with $100, in 10-years you'll have over $50,000 in cash or it's equivalent.
8. You have to learn to exercise patience. This is the greatest attribute of a good hunter. In your field you'll be looking for bargains that can quickly be resold for a substantial profit. You've got to learn the sources of the items you want to sell, how to spot the bargains, and then have the persistence to allow your investment to pay off for you.
9. You have to learn what to do with your riches. When your capital has grown beyond the needs of your operation, put it to work. Get it into other investments that will produce more capital and even more income. Pyramiding your investments will bring you all the money you can use.
10. You have to learn to keep your mouth shut! The man who has found a method of making money, who understands what it can mean, keeps his mouth shut about it. That's why it's so ridiculous to assume that anyone would sell you a sure thing gambling system for a couple of dollars. If it was a sure thing, he'd guard it with his life. The thing is, keep your mouth shut and you'll save yourself a lot of grief as well as competition.
Copyright 2004 by DeAnna Spencer
DeAnna Spencer is a virtual assistant that helps entrepreneurs run a successful business by providing affordable administrative help. She also publishes a blog for small business owners. Visit this small business resource today.
expert: DeAnna Spencer
Basically, it's simply because the people reading this "How-To" information don't understand what they read, or else just don't have the drive it takes to put what they've read into action. In truth, it would seem that everyone wants to "find out how to become rich," but the number of people with the drive it takes to "work a plan," is few and far between.
The Basics to Getting Rich can be stated simply as follows:
1. You must control your investment. This is the key to building a fortune from small capital. You have to have the ability and knowledge to make the right moves at the right time, and above all, the innate talent it takes to always land on your feet and never be wiped out, regardless of the setbacks you may encounter.
2. You must know how and where to buy for next to nothing - or produce a product from scratch - and sell at a tremendous profit. With this ability, you can start with $100 or less, and sell it to someone else for much more than you paid for it. Then do it again, and keep on doing it until you have enough money to make substantial investments in other area where your money will grow and prosper.
3. You must buy things that appreciate in value. In other words, learn to buy things that will grow in value as time goes on. Things such as collectibles, land, precious metals and stones. Think of the multiplication factor: You pay $10 for a copyright, sell 500 copies and you're off to a small fortune.
4. You've got to be choosy. Buy the original or pick a limited field. For instance, if you buy written material, buy form the author; or if you're into stamps or coins, work with just one country or type of coins/stamps.
5. You must become an expert in your field of selling - know all there is to know about it. It takes time, effort, and energy, but the financial rewards are worth it.
6. You must know how to work the tax shelters. In the confiscatory tax economy we operate in today, anyone attempting to make important money has to operate with every tax break he can get. There are many of them, and they can be applied in different ways. Make friends with a good tax accountant; he'll be able to give you many angles that you've probably never heard of. Be sure you take every advantage of capital gains, investment credits, take part of your rent or house payment as an office expense, as well as your car - get all you can. It's legal, and it's necessary if you're going to build your capital.
7. You have to set goals and dedicate yourself to attaining those goals. In just about any buy/sell program, you can set a rate of say 20% net profit on each transaction, and work a five-time-a-year turnover. This will double your capital each year. Now the net profit means just that - what is yours after all expenses and taxes are paid - so you'll have to get about 35 to 40% markup on each cycle.
If you've done your homework and are really an expert in your field, you'll often be able to make profits of 200% and more on a single transaction, because real buys will always show up for the person with cash in hand. If you set a goal such as this, and follow this system starting with $100, in 10-years you'll have over $50,000 in cash or it's equivalent.
8. You have to learn to exercise patience. This is the greatest attribute of a good hunter. In your field you'll be looking for bargains that can quickly be resold for a substantial profit. You've got to learn the sources of the items you want to sell, how to spot the bargains, and then have the persistence to allow your investment to pay off for you.
9. You have to learn what to do with your riches. When your capital has grown beyond the needs of your operation, put it to work. Get it into other investments that will produce more capital and even more income. Pyramiding your investments will bring you all the money you can use.
10. You have to learn to keep your mouth shut! The man who has found a method of making money, who understands what it can mean, keeps his mouth shut about it. That's why it's so ridiculous to assume that anyone would sell you a sure thing gambling system for a couple of dollars. If it was a sure thing, he'd guard it with his life. The thing is, keep your mouth shut and you'll save yourself a lot of grief as well as competition.
Copyright 2004 by DeAnna Spencer
DeAnna Spencer is a virtual assistant that helps entrepreneurs run a successful business by providing affordable administrative help. She also publishes a blog for small business owners. Visit this small business resource today.
expert: DeAnna Spencer
Dow Jones Precious Metals Index-Make Great Money With The Precious Metals Index
Ever wondered how people are making money on the Dow Jones precious metals index? The Dow Jones Precious metal index has always been the deciding factor for the performance of metal index across the globe. The Dow Jones Precious Metals Index represents the performance of United States trading stocks of companies engaged in the business of gold, silver and platinum group metals.
One can trade these metal stocks once they get included in the Dow Jones precious metals index. The criteria for metal stocks to get listed on the index are: 1) it must pass the screens design to eliminate least liquid stocks. 2) It must be a U.S. listed stock or an ADR and lastly, the listed company must qualify as a gold mining sub sector or precious metal sub sector of the ICB.
The index is based on market capitalization. Every company listed is represented by a symbol and the symbol becomes more popular in the trading world.
Investing in the precious metal index is a costly affair but it could pay off heavily if you are able to seize the opportunity of a lower rate as the premiums would be less too. The index charts depicts the index performance and it is available on daily, weekly, monthly and yearly basis.
The Dow Jones precious metals index measure the performance of precious metals mining industry, gold producing companies, and silver and platinum group metals whose shares are available to U.S. citizens to trade. What can you do if you do not have the big money to invest on gold or platinum?
Several sector mutual funds run on metal index buying and selling metal stocks. Invest in such mutual funds and you don’t have to worry about the heavy metal price, king size premiums and losses as the fund manager worries about that.
Remember, the precious metals index offers some serious growth potential, but only if you are an educated investor and know what you’re doing. Unfortunately, all too many investors jump into an investment without having any clue about how to make money. Follow these tips, and you will make some great money with the Dow Jones precious metal index.
For more info on how to buy stocks, and tips for investing in the stock market, visit http://www.stock-investing-tips.com, a popular site that teaches how to make a fortune from your investments.
expert: Josh Neumann
One can trade these metal stocks once they get included in the Dow Jones precious metals index. The criteria for metal stocks to get listed on the index are: 1) it must pass the screens design to eliminate least liquid stocks. 2) It must be a U.S. listed stock or an ADR and lastly, the listed company must qualify as a gold mining sub sector or precious metal sub sector of the ICB.
The index is based on market capitalization. Every company listed is represented by a symbol and the symbol becomes more popular in the trading world.
Investing in the precious metal index is a costly affair but it could pay off heavily if you are able to seize the opportunity of a lower rate as the premiums would be less too. The index charts depicts the index performance and it is available on daily, weekly, monthly and yearly basis.
The Dow Jones precious metals index measure the performance of precious metals mining industry, gold producing companies, and silver and platinum group metals whose shares are available to U.S. citizens to trade. What can you do if you do not have the big money to invest on gold or platinum?
Several sector mutual funds run on metal index buying and selling metal stocks. Invest in such mutual funds and you don’t have to worry about the heavy metal price, king size premiums and losses as the fund manager worries about that.
Remember, the precious metals index offers some serious growth potential, but only if you are an educated investor and know what you’re doing. Unfortunately, all too many investors jump into an investment without having any clue about how to make money. Follow these tips, and you will make some great money with the Dow Jones precious metal index.
For more info on how to buy stocks, and tips for investing in the stock market, visit http://www.stock-investing-tips.com, a popular site that teaches how to make a fortune from your investments.
expert: Josh Neumann
Investing - Enjoy the Precious Metals Commodities Ride
Our rather pessimistic articles of late on the housing bubble, the ominous warnings from a long list of financial experts and their suggestions on how to best weather the impending financial hurricane have been refuted by none other than the well read author of our "Crazy Man" articles (see "A Crazy Man's Rant or Right On? You be the Judge" and "Crazy Man's Rant - He's Crazy Like a Fox!") who sees things completely differently. Who is right - the eternal optimist with a different take on the economic environment or the big bad bears? Below are his comments.
"I have been beset, of late, by a number of anomalies in what I read and know about the economy and how they translate into an imminent housing collapse and how those linkages to other major segments of the economy would cause general economic bedlam.
Be that as it may, I am convinced that we are in the early stages of a multi-year secular commodities bull market.
I am equally convinced of "peak oil" and the merits of energy investments whether they be for reasons of supply, geopolitical or for environmental reasons.
I am also convinced of the large and continuing incremental demand for base metals and other commodities by the growing economies of Asia centered around China and India.
And, finally, I am totally convinced that this demand for base metals and other commodities will continue to escalate even if recession becomes the order of the day in the United States and other developed western economies because of the explosion of savings and demand by the growing middle class of Asia.
I am puzzled, however, as to why you are so convinced that housing demand and prices are on the brink of tanking.
As I see it the recent increase in short term interest rates are not that unsettling (John Mauldin, in his most recent article entitled 'When Will the Fed Stop?' supports my contention making the point that from an historical basis the Fed funds rate is not that high given the fact that from 1946 through 2000 the median fed fund rate was over 6% and yet the U.S. economy grew rapidly during that period) and the almost permanently static longer term interest rates continue to make housing a tremendously affordable proposition. In addition, institutional lenders continue to bend over backwards to accommodate buyers.
Your "Our Worst Nightmare" articles on the housing market (see "Our Worst Nightmare - The Puncture of the Current US Housing Bubble" and "Our Worst Nightmare - The Bubble Has Burst") are sensationalist and misleading. Housing is a hard commodity. It is real, concrete, can be seen and used. Compared to paper representing bonds and equity shares, it is tangible just as all other commodities are. So if we are really in a commodity secular bull cycle, why should we despair over the suggested imminent collapse of the housing market? Where is the nightmare? Moreover, if the FED continues to be accommodative in terms of money supply, interest rates and credit generally, why should the buoyant housing market fall apart prompting all the other elements of the economy dependent upon it to do the same? Again I ask: where is the nightmare?
As I see it, official employment figures indicate a strong economy and the CPI index is not in the least inflationary. Also, surveys of consumer and producer confidence stand almost at multi-year highs. Knowing that Robert Prechter preaches that public attitudes and social mood lead to behavior and activity - not the other way around as we almost all believe - this public optimism bodes well for a continuation of the current economic reality. With an always accommodating FED policy of M3 annual growth in the money supply of almost ten percent, all should be sweetness and light for continuing consumer led demand and economic growth. As I see it, all your 'ominous warnings and dire predictions' are also way off base and are alarmist at best.
You go on and on in your "Ominous Warnings and Dire Predictions" articles (see "Ominous Warnings and Dire Predictions of the World's Financial Experts Part 1 and 2 of a 6 part series) about all kinds of things but:
a) fail to address why so many people are so optimistic given the obvious inflationary consequences of growth in the money supply, bubble-like housing prices and a loss of affordability because of rising house prices.
b) fail to express concern that official numbers relating to the Consumer Price Index, unemployment, GDP and other measures of economic reality are largely bogus and
c) fail, most importantly, to mention the unfunded liabilities of Social Security IOU's, Medicaid, Medicare and its new drug plan, Freddie and Fannie Mae and the Pension Guaranty Corporation which purportedly backstops underfunded private and public sector defined benefit pension plans.
Now I may be talking out of both sides of my mouth here but I also feel strongly that this lengthening list of economic fundamentals are, indeed, alarming and can not continue indefinitely without a blow up. Politicians and central bankers along with their cheerleaders in the brokerage, banking and mutual fund industries, assisted by a largely ignorant and culpable popular news media, will, however, do their best to leave the toiling masses largely ignorant of economic realities for as long as possible.
Inevitably though, when the 'dam breaks' or the 'deck of cards' collapses, it will be quick and calamitous in its magnitude and impact. That is why I am well positioned in precious metals (gold and silver bullion, mining company shares and some well placed long term precious metals warrants to reap the major benefits of leverage these assets continue to give my portfolio) but somewhat less so in base metals and energy. That is my comfort zone which allows me to sleep soundly because it is the best way to protect my hard earned equity and prosper from the fallout of the coming financial collapse. The only thing I do not know is the extent of this future financial dislocation or its timing. What the heck, life wouldn't be very interesting if we could predict the future with absolute certainty, now would it?
For what it is worth, and I have been laughing all the way to the bank of late, I believe we are in a genuine commodities bull market and, as such, see no need to spend much time paying attention to the daily ebbs and flows of the market for these investments. I have done my research and analysis and taken a position. I periodically review the performance of my investments, fine tune them on occasion and then get on with my life confident that the markets will develop as we know they are destined to with our assets safe and growing. If there is a fiscal hurricane approaching as you suggest I am confident my portfolio is secure. (See "Warning! Fiscal Hurricane Approaching! Is Your Portfolio Secure?").
Call this the standard 'buy and hold' approach if you will, but it isn't. Traditional buy and hold investing makes a fetish out of percentage asset allocation between market sectors, stocks and bonds, picking individual stock winners and pruning losers all in the name of 'balance and diversification.' Lighten up and enjoy the commodities ride."
The bottom line conclusion appears to be for investors to strategically position themselves in a wide variety of assets including precious metals, mining shares and long-term warrants.
Dudley Baker is the owner/editor of Precious Metals Warrants http://www.preciousmetalswarrants.com a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders.
expert: Dudley Baker
"I have been beset, of late, by a number of anomalies in what I read and know about the economy and how they translate into an imminent housing collapse and how those linkages to other major segments of the economy would cause general economic bedlam.
Be that as it may, I am convinced that we are in the early stages of a multi-year secular commodities bull market.
I am equally convinced of "peak oil" and the merits of energy investments whether they be for reasons of supply, geopolitical or for environmental reasons.
I am also convinced of the large and continuing incremental demand for base metals and other commodities by the growing economies of Asia centered around China and India.
And, finally, I am totally convinced that this demand for base metals and other commodities will continue to escalate even if recession becomes the order of the day in the United States and other developed western economies because of the explosion of savings and demand by the growing middle class of Asia.
I am puzzled, however, as to why you are so convinced that housing demand and prices are on the brink of tanking.
As I see it the recent increase in short term interest rates are not that unsettling (John Mauldin, in his most recent article entitled 'When Will the Fed Stop?' supports my contention making the point that from an historical basis the Fed funds rate is not that high given the fact that from 1946 through 2000 the median fed fund rate was over 6% and yet the U.S. economy grew rapidly during that period) and the almost permanently static longer term interest rates continue to make housing a tremendously affordable proposition. In addition, institutional lenders continue to bend over backwards to accommodate buyers.
Your "Our Worst Nightmare" articles on the housing market (see "Our Worst Nightmare - The Puncture of the Current US Housing Bubble" and "Our Worst Nightmare - The Bubble Has Burst") are sensationalist and misleading. Housing is a hard commodity. It is real, concrete, can be seen and used. Compared to paper representing bonds and equity shares, it is tangible just as all other commodities are. So if we are really in a commodity secular bull cycle, why should we despair over the suggested imminent collapse of the housing market? Where is the nightmare? Moreover, if the FED continues to be accommodative in terms of money supply, interest rates and credit generally, why should the buoyant housing market fall apart prompting all the other elements of the economy dependent upon it to do the same? Again I ask: where is the nightmare?
As I see it, official employment figures indicate a strong economy and the CPI index is not in the least inflationary. Also, surveys of consumer and producer confidence stand almost at multi-year highs. Knowing that Robert Prechter preaches that public attitudes and social mood lead to behavior and activity - not the other way around as we almost all believe - this public optimism bodes well for a continuation of the current economic reality. With an always accommodating FED policy of M3 annual growth in the money supply of almost ten percent, all should be sweetness and light for continuing consumer led demand and economic growth. As I see it, all your 'ominous warnings and dire predictions' are also way off base and are alarmist at best.
You go on and on in your "Ominous Warnings and Dire Predictions" articles (see "Ominous Warnings and Dire Predictions of the World's Financial Experts Part 1 and 2 of a 6 part series) about all kinds of things but:
a) fail to address why so many people are so optimistic given the obvious inflationary consequences of growth in the money supply, bubble-like housing prices and a loss of affordability because of rising house prices.
b) fail to express concern that official numbers relating to the Consumer Price Index, unemployment, GDP and other measures of economic reality are largely bogus and
c) fail, most importantly, to mention the unfunded liabilities of Social Security IOU's, Medicaid, Medicare and its new drug plan, Freddie and Fannie Mae and the Pension Guaranty Corporation which purportedly backstops underfunded private and public sector defined benefit pension plans.
Now I may be talking out of both sides of my mouth here but I also feel strongly that this lengthening list of economic fundamentals are, indeed, alarming and can not continue indefinitely without a blow up. Politicians and central bankers along with their cheerleaders in the brokerage, banking and mutual fund industries, assisted by a largely ignorant and culpable popular news media, will, however, do their best to leave the toiling masses largely ignorant of economic realities for as long as possible.
Inevitably though, when the 'dam breaks' or the 'deck of cards' collapses, it will be quick and calamitous in its magnitude and impact. That is why I am well positioned in precious metals (gold and silver bullion, mining company shares and some well placed long term precious metals warrants to reap the major benefits of leverage these assets continue to give my portfolio) but somewhat less so in base metals and energy. That is my comfort zone which allows me to sleep soundly because it is the best way to protect my hard earned equity and prosper from the fallout of the coming financial collapse. The only thing I do not know is the extent of this future financial dislocation or its timing. What the heck, life wouldn't be very interesting if we could predict the future with absolute certainty, now would it?
For what it is worth, and I have been laughing all the way to the bank of late, I believe we are in a genuine commodities bull market and, as such, see no need to spend much time paying attention to the daily ebbs and flows of the market for these investments. I have done my research and analysis and taken a position. I periodically review the performance of my investments, fine tune them on occasion and then get on with my life confident that the markets will develop as we know they are destined to with our assets safe and growing. If there is a fiscal hurricane approaching as you suggest I am confident my portfolio is secure. (See "Warning! Fiscal Hurricane Approaching! Is Your Portfolio Secure?").
Call this the standard 'buy and hold' approach if you will, but it isn't. Traditional buy and hold investing makes a fetish out of percentage asset allocation between market sectors, stocks and bonds, picking individual stock winners and pruning losers all in the name of 'balance and diversification.' Lighten up and enjoy the commodities ride."
The bottom line conclusion appears to be for investors to strategically position themselves in a wide variety of assets including precious metals, mining shares and long-term warrants.
Dudley Baker is the owner/editor of Precious Metals Warrants http://www.preciousmetalswarrants.com a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders.
expert: Dudley Baker
Surprise-Energy, Precious Metals And Base Metals Will Be In Demand In The Coming Years
Today, Morgan Stanley put out a number of comprehensive analyses discussing the demand for commodities and the outlook for some mining companies. In short, they remain bullish on many, but not all base metals and energy commodities, and the main reason is demand from China.
Those of you who have followed us for the last several years should know that this is an old theme for us, but one which is gaining more and more currency with investors globally. When big firms with a global following are pushing 75 page research reports to their wealthy clients about the demand from China and India for base metals and energy, you know a lot of buying will follow in these areas.
By the way, they raised their price objective for gold and the platinum group metals for 2007 and 2008 as well. We believe a large part of the increased demand for precious metals will come from the increased purchases by Chinese and other Asians [especially Indians] as they grow in wealth.
All of this continues to argue for a long-term increase in the huge quantity of assets, which will be invested in these areas in coming years. By these areas, we mean precious metals, energy and base metals.
Once the freight train of big money gets rolling into an investment theme, it is hard to stop.
These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions.
The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country.
Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned.
Guild’s current and past market commentaries are protected by copyright. Apart from any use permitted under the Copyright Act, you must not copy, frame, modify, transmit or distribute the market commentaries, without seeking the prior consent of Guild.
Monty Guild founded Guild Investment Management in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. For more information on global investment opportunities visit http://www.howtoinvestglobally.com For more information on Guild investment management services visit http://www.guildinvestment.com Guild Investment Management, Inc., is a registered investment advisor. All material presented herein is believed to be reliable. Investment recommendations and opinions expressed in these reports may change without prior notice. You can also read our past periodic market and economic commentary articles by going to the Commentary Archive on our web site http://www.guildinvestment.com
expert: Monty Guild
Those of you who have followed us for the last several years should know that this is an old theme for us, but one which is gaining more and more currency with investors globally. When big firms with a global following are pushing 75 page research reports to their wealthy clients about the demand from China and India for base metals and energy, you know a lot of buying will follow in these areas.
By the way, they raised their price objective for gold and the platinum group metals for 2007 and 2008 as well. We believe a large part of the increased demand for precious metals will come from the increased purchases by Chinese and other Asians [especially Indians] as they grow in wealth.
All of this continues to argue for a long-term increase in the huge quantity of assets, which will be invested in these areas in coming years. By these areas, we mean precious metals, energy and base metals.
Once the freight train of big money gets rolling into an investment theme, it is hard to stop.
These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions.
The information in this article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Guild Investment Management to any registration requirement within such jurisdiction or country.
Any opinions expressed herein, are subject to change without notice. In addition, there are many market, currency, economic, political, business, technological and other risks that are beyond our control. We make reasonable efforts to provide accurate content in these articles; however, some content and some of the assumptions, formulas, algorithms and other data that impact the content may be inaccurate, outdated, or otherwise inappropriate. In addition, we may have conflicts of interest with respect to any investments mentioned. Our principals and our clients may hold positions in investments mentioned on the site or we may take positions contrary to investments mentioned.
Guild’s current and past market commentaries are protected by copyright. Apart from any use permitted under the Copyright Act, you must not copy, frame, modify, transmit or distribute the market commentaries, without seeking the prior consent of Guild.
Monty Guild founded Guild Investment Management in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. For more information on global investment opportunities visit http://www.howtoinvestglobally.com For more information on Guild investment management services visit http://www.guildinvestment.com Guild Investment Management, Inc., is a registered investment advisor. All material presented herein is believed to be reliable. Investment recommendations and opinions expressed in these reports may change without prior notice. You can also read our past periodic market and economic commentary articles by going to the Commentary Archive on our web site http://www.guildinvestment.com
expert: Monty Guild
Is It True that Regular Index Investing Performs Good Results with Low Risk?
There are many mutual funds and ETF on the market. But only a few performs results as good as s&p 500 or better. Well known that s&p 500 performs good results in long terms. But how can we convert these good results into money? We can buy index fund shares.
Index Funds seek investment results that correspond with the total return of the some market index (for example s&p 500). Investing into index funds gives chance that the result of this investment will be close to result of the index.
As we see, we receive good result doing nothing. It's main advantages of investing into index funds.
This investment strategy works better for long term. It means that you have to invest your money into index funds for 5 years or longer. Most of people have no much money for big one time investment. But we can invest small amount of dollars every month.
We have tested performance for 5-years regular investment into three indexes (S&P500, S&P Mid Caps 400, S&P Small Caps 600). The result of testing shows that every month investing small amounts of dollar gives good results. Statistic shows that you will receive profit from 26% to 28.50% of initial investment into S&P 500 with 80% probability.
We must note that investing into indexes isn't risk-free investment. There are results with loosing in our testing. The poorest result is loosing about 33% of initial investment into S&P 500.
Diversification is the best way to reduce risk. Investing into 2-3 different indexes can reduce risk significantly. Best results are given by investing into indexes with different types of assets (bond index and share index) or different classes of assets (small caps, mid caps, big caps).
Alexander Korablev is head of FPLab Team
http://Fplab.com has trainings and courses catalog for traders and investors.
expert: Alexander Korablev
Index Funds seek investment results that correspond with the total return of the some market index (for example s&p 500). Investing into index funds gives chance that the result of this investment will be close to result of the index.
As we see, we receive good result doing nothing. It's main advantages of investing into index funds.
This investment strategy works better for long term. It means that you have to invest your money into index funds for 5 years or longer. Most of people have no much money for big one time investment. But we can invest small amount of dollars every month.
We have tested performance for 5-years regular investment into three indexes (S&P500, S&P Mid Caps 400, S&P Small Caps 600). The result of testing shows that every month investing small amounts of dollar gives good results. Statistic shows that you will receive profit from 26% to 28.50% of initial investment into S&P 500 with 80% probability.
We must note that investing into indexes isn't risk-free investment. There are results with loosing in our testing. The poorest result is loosing about 33% of initial investment into S&P 500.
Diversification is the best way to reduce risk. Investing into 2-3 different indexes can reduce risk significantly. Best results are given by investing into indexes with different types of assets (bond index and share index) or different classes of assets (small caps, mid caps, big caps).
Alexander Korablev is head of FPLab Team
http://Fplab.com has trainings and courses catalog for traders and investors.
expert: Alexander Korablev
Why Is Eric Sprott Bullish on Uranium?
Eric Sprott may be Canada's answer to Warren Buffet. He's got the Midas Touch and currently manages more than $3 billion. We talk to Eric Sprott about uranium and why is bullish on nuclear energy.
Interviewer:
Uranium had been inching higher from 2001 until a year ago. Since then, it has soared up the price chart. What is a realistic price for uranium and how high can you envision it reaching?
Eric Sprott:
There is obviously a shortage between current mine production and current uranium consumption. In order to correct that imbalance, it would have to be economic to open up new deposits. I’m not suggesting that it (uranium) has to go to $100 to become economic. I don’t think that’s true. Probably at $50, it becomes very economic. The reality is that we’ve been so slow in getting started that I think the whole nuclear industry will ultimately prove to be the key energy source of the future. With demand today at 170 million (pounds), who knows? It might be 300 million pounds in twenty years. The argument in the article we wrote is that based on the previous peaks, prices if you put a normal inflation rate on it, it would equate to something like $100. So, it’s not that far fetched that we might get there.
Interviewer:
If it takes four or five years, or up to a decade, to get a nuclear reactor going, why are the Chinese building so many so quickly?
Eric Sprott:
Because they’ve been doing it right. One of the nice things about a centrally organized government is they deal with big issues. Obviously, China has a big issue in energy. If you were sitting over there, you would realize, ‘My god, we’re starting to import two million barrels of oil. We used to export coal and now we don’t export coal. What are we going to do if our growth rate continues to grow at eight or nine percent per year? How much power are we going to need? And where is it all going to come from when there are already shortages of the two most commonly used energy sources in the country?' The option you fall back on is, ‘Well, let’s go nuclear. We have to go into all of them.’ And of course, now they’re predicting two nuclear reactors every year for the next ten years. Who knows? Maybe five years from now, that will be four reactors every year. Perhaps when we all realize the extent of the energy shortage.
Interviewer:
How is this going to be sold to North America and Europe in the wake of Three Mile Island and Chernobyl?
Eric Sprott:
The way things might change is now that we have $50 oil, and the price is almost going up in an unlimited fashion. Now that we’ve got coal at double and uranium that’s gone up, people might finally realize there is not an infinite supply of certain things that we rely on. And that we might have to take a more pragmatic view of the nuclear option. I’m sure that is exactly what certain countries, including Japan, China and France, have done. The other thing is that there is a new reactor where you can’t have a meltdown. I’m not technically strong enough to explain it. The uranium is in graphite spheres, and they won’t melt down unless temperatures reach 2000 degrees. The highest it ever goes to is 1600 degrees so it’s just not going to melt down.
It doesn’t matter if things are out of control. They won’t break down. If that kind of assurance were accepted by the public – if someone could prove that that was the case – I think the nuclear option would be an incredibly viable option. Another thing that would make people think differently would be having brownouts for a while, or hyperinflation because of the shortage of coal, natural gas, and diesel fuel. If we had brownouts for a while, and of course they have brownouts in China, which is probably why they are proactive in moving nuclear along.
Interviewer:
How realistic is the global energy crisis moving toward a Hubbert’s Peak, an energy scenario from the year 1970?
Eric Sprott:
My view is that it seems very realistic. I think it is very important that we do go back to 1970. Look at the fact that Hubbert said in 1956 that 1970 will forever peak out (in terms of energy production). Lo and behold, it peaked out! It almost goes down every week in the United States. Almost every week, there is a little less production. This is now with very high oil prices. It looks like his theory, for the geographical area called the United States, worked. Do we think it is going to work in the world? I tend to believe it is. I believe there are projections for Great Britain, which I think are at about 4.2 million barrels/day right now, that in ten years from now, will be down to 700,000. That’s what happens when fields go into decline. They go down, and you can not resuscitate them. Everyone who studies the topic knows that no significant discoveries have been made since the 1960s.
What I mean by significant are giant oil fields – like Ghawar. For example, people now consider a 100-million barrel field a big deal, and 500 million is great. Well, one hundred million is like 1.2 days of world’s supply, and 500 million is eight days supply. You have got to find a lot of those every year. We don’t find them. We have hardly found anything. The Caspian Sea? I am guessing it is 500 to 700 million. It’s the one thing we point to, the thing in the Caspian Sea, which we have been pointing to for the last three years. Let’s say it is 800 million barrels, it is ten days’ supply. It’s nothing.
Interviewer:
There have been some pretty incredible estimates as to how high oil can go. The highest we’re read of stands at $182 for a barrel of oil and $15 per gallon of gasoline. Your comments?
Eric Sprott:
When you get into any commodity, where there is a bonafide shortage, there is no limit on the price. There is hardly any limit on the price. Because that last guy still wants that last barrel of oil. I always say, when a commodity is starting to break loose, ‘Never put a ceiling on it because you never know where it is going to go.’ You look at what is going on in the world oil situation. If I was (in charge of ) certain countries, I would probably be changing what I’m doing. You can see China going throughout the world signing agreements with countries to assure oil supplies. It’s a government mandate to go out and secure their supplies. I think people at the government level realize, ‘We have issues here that we have to solve. If we don’t have assurance of supply, what happens?’ One thing about Hubbert’s Peak that most people don’t go to is the economic impact. Forget the price of oil. What if we produce 83 million barrels today, and in 25 years we have 55 million barrels? What is the world going to do? Do we just have to shut down economies because we don’t have a replacement for hydrocarbons?
Interviewer:
Do you think the world governments are prepared for this?
Eric Sprott:
Not at all. They show no interest. In fact, I would say one of the real problems with the democratic process is, unfortunately, too much time is spent thinking about politics. Hardly any time is spent planning for the future.
Interviewer:
On uranium, you recommended a number of uranium companies in your special report. Cameco (NYSE: CCJ) seems to be the one many recommend. Other uranium companies seem to be in the exploration or the more speculative category, and now have some momentum because of the bull market in uranium. How strong are the fundamentals in those companies?
Eric Sprott:
I think the fundamentals for some of the companies are spectacular, quite frankly. It’s interesting for us because we had the same thing happen in gold, when the price of gold was $250. We tried to imagine what we should buy if, and when, gold went to $400, which we thought it would, or $500 or higher. The real opportunity always lay in, ‘We’ll find someone who has a large resource that is uneconomic today, but if you move the price up, it becomes quite economic.’ I would say Strathmore Minerals (TSX-V: STM). They have a large resource already identified. In fact, they are acquiring properties all the time that were identified years and years ago. Yet, at $20/pound uranium, they probably don’t make any sense. But, at $40/pound uranium, they are likely to make tremendous economic sense. Of course, the value of the shares can almost – not go up exponentially – but they can go up a lot.
You finally tip over that breakeven level, and everything after that is profit. We had an analogy like that in gold area, where one guy went out and bought all these deposits that would make sense at $400 gold. The stock has been a tremendous winner. I think it is up 500 percent. I think the same can happen in uranium. That’s why we go to Strathmore and UEX (TSX: UEX).
Interviewer:
How do you feel about precious metals?
Eric Sprott:
We feel pretty good about precious metals. We’ve been pretty bullish for quite a while now. We have liked the fundamentals for gold for a long time for any one of ten different reasons. The one reason I fall back on, that gives me tremendous comfort, is the fact the world consumes 4,000 tons of gold per year, but mine production is 2,500. Anybody who uses any bit of logic knows, in due course, the price will go up to reflect the imbalance between demand and supply. I don’t care how much gold Central Banks sell, ultimately they are going to have no gold. I think people realize that Central Banks have made a big mistake selling their gold.
Interviewer:
The China card keeps driving global commodities as they bring their country more technology. How do you feel about the base metals?
Eric Sprott:
We haven’t really gotten involved in the base metals. One of the reason we haven’t gone there is we have believed we are in a secular bear market, and there could be a financial implosion. In that kind of scenario the base metals don’t do well. But the precious metals can provide safety. That’s the distinguishing mark we make between the two. On the China thesis, the demand for all of these things would go up. Our problem is we still expect some fallout in the financial arena, which ultimately would even affect China. We feel more comfortable with the precious metals, and we feel more comfortable with energy. Simply, energy demand in an economic implosion is pretty inelastic. It doesn’t fall off the table. Demand for zinc, lead, copper, and aluminum can fall quite precipitously if there was an economic slowdown.
Interviewer:
Are you expecting an economic slowdown?
Eric Sprott:
Absolutely, yes. We might be in it now. There are certainly lots of signs that there is not much robustness in the U.S. economy. I have some very strong views as to what should ultimately happen in the U.S. My views are predicated on the fact that the government reports a deficit of $400 billion, but there are also government reports that suggest, on a GAAP accounting basis, that the true deficit in 2003 was $3.4 trillion. We can all ignore it, and everyone has ignored it. But, the reality is that the liabilities are accruing for Social Security and Medicare in the U.S. at a tremendous rate. There has been no provision for it. There was a paper released by the U.S. Treasury Department about a year ago that said the present value of their obligations, that are not funded, is $44 trillion. Again, we can choose to believe it or not believe it. I happen to believe it. I made the point that politicians are in it to be re-elected, and they are not dealing with the real issue.
The real issue is they are making promises to their citizens that they can’t keep. And they’re not going to keep them. I would hate to be a retired person or a young person in the U.S. Somebody is going to have to bear the brunt of all these funding issues that haven’t been taken care of. Beginning in 2008, the baby boomers start collecting these things. That’s a real cash problem. Before, it was just a bookkeeping problem. You’ll have a huge influx of people collecting their Social Security and getting free Medicare. It’s got to be funded. Anyone who’s looked at the problem has agreed that no one has done anything about funding it. You have to cut what your promises were, which is what all the European governments are now trying to do. They’re all cutting back on the pension. Most companies are cutting back on them because they can’t fund them. The trend is in place here: What we thought we were going to get, we’re not going to get it. Am I bearish? Gosh, we’ve had forty years of living off of savings that were supposed to be saved to provide this future. It was all spent. Everyone just chooses to ignore it.
COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.
James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com
expert=James_Finch
Interviewer:
Uranium had been inching higher from 2001 until a year ago. Since then, it has soared up the price chart. What is a realistic price for uranium and how high can you envision it reaching?
Eric Sprott:
There is obviously a shortage between current mine production and current uranium consumption. In order to correct that imbalance, it would have to be economic to open up new deposits. I’m not suggesting that it (uranium) has to go to $100 to become economic. I don’t think that’s true. Probably at $50, it becomes very economic. The reality is that we’ve been so slow in getting started that I think the whole nuclear industry will ultimately prove to be the key energy source of the future. With demand today at 170 million (pounds), who knows? It might be 300 million pounds in twenty years. The argument in the article we wrote is that based on the previous peaks, prices if you put a normal inflation rate on it, it would equate to something like $100. So, it’s not that far fetched that we might get there.
Interviewer:
If it takes four or five years, or up to a decade, to get a nuclear reactor going, why are the Chinese building so many so quickly?
Eric Sprott:
Because they’ve been doing it right. One of the nice things about a centrally organized government is they deal with big issues. Obviously, China has a big issue in energy. If you were sitting over there, you would realize, ‘My god, we’re starting to import two million barrels of oil. We used to export coal and now we don’t export coal. What are we going to do if our growth rate continues to grow at eight or nine percent per year? How much power are we going to need? And where is it all going to come from when there are already shortages of the two most commonly used energy sources in the country?' The option you fall back on is, ‘Well, let’s go nuclear. We have to go into all of them.’ And of course, now they’re predicting two nuclear reactors every year for the next ten years. Who knows? Maybe five years from now, that will be four reactors every year. Perhaps when we all realize the extent of the energy shortage.
Interviewer:
How is this going to be sold to North America and Europe in the wake of Three Mile Island and Chernobyl?
Eric Sprott:
The way things might change is now that we have $50 oil, and the price is almost going up in an unlimited fashion. Now that we’ve got coal at double and uranium that’s gone up, people might finally realize there is not an infinite supply of certain things that we rely on. And that we might have to take a more pragmatic view of the nuclear option. I’m sure that is exactly what certain countries, including Japan, China and France, have done. The other thing is that there is a new reactor where you can’t have a meltdown. I’m not technically strong enough to explain it. The uranium is in graphite spheres, and they won’t melt down unless temperatures reach 2000 degrees. The highest it ever goes to is 1600 degrees so it’s just not going to melt down.
It doesn’t matter if things are out of control. They won’t break down. If that kind of assurance were accepted by the public – if someone could prove that that was the case – I think the nuclear option would be an incredibly viable option. Another thing that would make people think differently would be having brownouts for a while, or hyperinflation because of the shortage of coal, natural gas, and diesel fuel. If we had brownouts for a while, and of course they have brownouts in China, which is probably why they are proactive in moving nuclear along.
Interviewer:
How realistic is the global energy crisis moving toward a Hubbert’s Peak, an energy scenario from the year 1970?
Eric Sprott:
My view is that it seems very realistic. I think it is very important that we do go back to 1970. Look at the fact that Hubbert said in 1956 that 1970 will forever peak out (in terms of energy production). Lo and behold, it peaked out! It almost goes down every week in the United States. Almost every week, there is a little less production. This is now with very high oil prices. It looks like his theory, for the geographical area called the United States, worked. Do we think it is going to work in the world? I tend to believe it is. I believe there are projections for Great Britain, which I think are at about 4.2 million barrels/day right now, that in ten years from now, will be down to 700,000. That’s what happens when fields go into decline. They go down, and you can not resuscitate them. Everyone who studies the topic knows that no significant discoveries have been made since the 1960s.
What I mean by significant are giant oil fields – like Ghawar. For example, people now consider a 100-million barrel field a big deal, and 500 million is great. Well, one hundred million is like 1.2 days of world’s supply, and 500 million is eight days supply. You have got to find a lot of those every year. We don’t find them. We have hardly found anything. The Caspian Sea? I am guessing it is 500 to 700 million. It’s the one thing we point to, the thing in the Caspian Sea, which we have been pointing to for the last three years. Let’s say it is 800 million barrels, it is ten days’ supply. It’s nothing.
Interviewer:
There have been some pretty incredible estimates as to how high oil can go. The highest we’re read of stands at $182 for a barrel of oil and $15 per gallon of gasoline. Your comments?
Eric Sprott:
When you get into any commodity, where there is a bonafide shortage, there is no limit on the price. There is hardly any limit on the price. Because that last guy still wants that last barrel of oil. I always say, when a commodity is starting to break loose, ‘Never put a ceiling on it because you never know where it is going to go.’ You look at what is going on in the world oil situation. If I was (in charge of ) certain countries, I would probably be changing what I’m doing. You can see China going throughout the world signing agreements with countries to assure oil supplies. It’s a government mandate to go out and secure their supplies. I think people at the government level realize, ‘We have issues here that we have to solve. If we don’t have assurance of supply, what happens?’ One thing about Hubbert’s Peak that most people don’t go to is the economic impact. Forget the price of oil. What if we produce 83 million barrels today, and in 25 years we have 55 million barrels? What is the world going to do? Do we just have to shut down economies because we don’t have a replacement for hydrocarbons?
Interviewer:
Do you think the world governments are prepared for this?
Eric Sprott:
Not at all. They show no interest. In fact, I would say one of the real problems with the democratic process is, unfortunately, too much time is spent thinking about politics. Hardly any time is spent planning for the future.
Interviewer:
On uranium, you recommended a number of uranium companies in your special report. Cameco (NYSE: CCJ) seems to be the one many recommend. Other uranium companies seem to be in the exploration or the more speculative category, and now have some momentum because of the bull market in uranium. How strong are the fundamentals in those companies?
Eric Sprott:
I think the fundamentals for some of the companies are spectacular, quite frankly. It’s interesting for us because we had the same thing happen in gold, when the price of gold was $250. We tried to imagine what we should buy if, and when, gold went to $400, which we thought it would, or $500 or higher. The real opportunity always lay in, ‘We’ll find someone who has a large resource that is uneconomic today, but if you move the price up, it becomes quite economic.’ I would say Strathmore Minerals (TSX-V: STM). They have a large resource already identified. In fact, they are acquiring properties all the time that were identified years and years ago. Yet, at $20/pound uranium, they probably don’t make any sense. But, at $40/pound uranium, they are likely to make tremendous economic sense. Of course, the value of the shares can almost – not go up exponentially – but they can go up a lot.
You finally tip over that breakeven level, and everything after that is profit. We had an analogy like that in gold area, where one guy went out and bought all these deposits that would make sense at $400 gold. The stock has been a tremendous winner. I think it is up 500 percent. I think the same can happen in uranium. That’s why we go to Strathmore and UEX (TSX: UEX).
Interviewer:
How do you feel about precious metals?
Eric Sprott:
We feel pretty good about precious metals. We’ve been pretty bullish for quite a while now. We have liked the fundamentals for gold for a long time for any one of ten different reasons. The one reason I fall back on, that gives me tremendous comfort, is the fact the world consumes 4,000 tons of gold per year, but mine production is 2,500. Anybody who uses any bit of logic knows, in due course, the price will go up to reflect the imbalance between demand and supply. I don’t care how much gold Central Banks sell, ultimately they are going to have no gold. I think people realize that Central Banks have made a big mistake selling their gold.
Interviewer:
The China card keeps driving global commodities as they bring their country more technology. How do you feel about the base metals?
Eric Sprott:
We haven’t really gotten involved in the base metals. One of the reason we haven’t gone there is we have believed we are in a secular bear market, and there could be a financial implosion. In that kind of scenario the base metals don’t do well. But the precious metals can provide safety. That’s the distinguishing mark we make between the two. On the China thesis, the demand for all of these things would go up. Our problem is we still expect some fallout in the financial arena, which ultimately would even affect China. We feel more comfortable with the precious metals, and we feel more comfortable with energy. Simply, energy demand in an economic implosion is pretty inelastic. It doesn’t fall off the table. Demand for zinc, lead, copper, and aluminum can fall quite precipitously if there was an economic slowdown.
Interviewer:
Are you expecting an economic slowdown?
Eric Sprott:
Absolutely, yes. We might be in it now. There are certainly lots of signs that there is not much robustness in the U.S. economy. I have some very strong views as to what should ultimately happen in the U.S. My views are predicated on the fact that the government reports a deficit of $400 billion, but there are also government reports that suggest, on a GAAP accounting basis, that the true deficit in 2003 was $3.4 trillion. We can all ignore it, and everyone has ignored it. But, the reality is that the liabilities are accruing for Social Security and Medicare in the U.S. at a tremendous rate. There has been no provision for it. There was a paper released by the U.S. Treasury Department about a year ago that said the present value of their obligations, that are not funded, is $44 trillion. Again, we can choose to believe it or not believe it. I happen to believe it. I made the point that politicians are in it to be re-elected, and they are not dealing with the real issue.
The real issue is they are making promises to their citizens that they can’t keep. And they’re not going to keep them. I would hate to be a retired person or a young person in the U.S. Somebody is going to have to bear the brunt of all these funding issues that haven’t been taken care of. Beginning in 2008, the baby boomers start collecting these things. That’s a real cash problem. Before, it was just a bookkeeping problem. You’ll have a huge influx of people collecting their Social Security and getting free Medicare. It’s got to be funded. Anyone who’s looked at the problem has agreed that no one has done anything about funding it. You have to cut what your promises were, which is what all the European governments are now trying to do. They’re all cutting back on the pension. Most companies are cutting back on them because they can’t fund them. The trend is in place here: What we thought we were going to get, we’re not going to get it. Am I bearish? Gosh, we’ve had forty years of living off of savings that were supposed to be saved to provide this future. It was all spent. Everyone just chooses to ignore it.
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James Finch contributes to StockInterview.com and other publications. StockInterview’s “Investing in the Great Uranium Bull Market” has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com
expert=James_Finch
Steep Gold Price Increases Ahead - Experts Foresee $2000 Per Ounce
Many investors are realizing that gold and silver now have an upside potential to appreciate that has not been seen since 1980. Similar to the situation of the late 1970’s, investors are once again seeing gold coins and bullion as an important hedge against the uncertainly of war, inflation and the potential destruction of wealth due to a shaky dollar. Gold’s recent performance is also attracting serious interest from investors because it has outperformed the S&P 500 index for the past five years in a row. Gold and silver prices have moved steadily upward since 2001, as the value of the dollar has weakened. Many experts believe that this is a longer-term rally, which is quite young.
Robert McEwen, chairman and chief executive of a Canada-based gold mining company is very bullish on the future outlook for gold. "I expect it to test $850 by the end of 2008, and by the end of 2010, north of $2,000, possibly $5,000," McEwen stated in a recent interview. Strong gold and commodity prices are spurring investment in the search for new deposits by many mining companies across the world. His company is currently exploring for gold on mineral lands in central Nevada and expects to spend about $50 million to develop the site over the coming years.
Gold is seen as a profitable opportunity by many investors, having risen over 50% during the last two years, from $430 per ounce in May of 2005 to its current spot price of around $660. While McEwen’s price projection is considerably above the current spot gold price, he is not the only industry executive who foresees steeply increasing prices in the near future. The former CEO of a large well known US based gold mining company, Pierre Lassonde, believes gold will reach $750 by Christmas of this year. In spite of the price increases in the past several years, actual production of newly mined gold from most nations continues to decline, as costs rise at existing mines.
In spite of the fact that gold prices have been rising toward their May 2006 peak of $725, they have failed to break above the $700 mark this year, and are still seen as consolidating after the sharp run-up in prices last year. In addition, selling of the gold reserves of certain European nations, most notably Spain, is seen as depressing prices in recent weeks. Silver prices have also remained strong.
Many experts believe that although demand from jewelry makers will likely drop off as gold prices rise, it is likely to be more than made up for by increased purchases from investors who are seeking a liquid investment alternative to the dollar. Investment in gold and silver for both large and small investors has been made considerably easier in recent years with the creation of Exchange Traded Funds – funds whose assets are gold or silver held in storage. That expected increase in investment demand, coupled with the declining value of the dollar, rising costs to mine gold and the geopolitical risks around the globe, should tighten the supply and demand picture for the precious metal providing the driving force to move prices upward in the coming years.
The author is an independent investor and not a consultant, advisor or broker. The information and opinions expressed in this article are presented for educational purposes, and are not intended to be used as investment advice. The reader is strongly urged to fully identify and consider all the risks before making any investment.
For more information on the case for investing in gold can be seen at the authors website at: http://nevada-outback-gems.com/gold_invest/investing_gold_case.htm
Chris’s Web page and BLOG on investing in the gold and the stock Market can be viewed here: http://nevada-outback-gems.com/gold_invest/Investing_Gold.htm
Chris Ralph writes on small scale mining and prospecting for the ICMJ Mining Journal. He has a degree in Mining Engineering from the Mackay School of Mines in Reno, and has worked for precious metal mining companies conducting both surface and underground operations. After working in the mining industry, he has continued his interest in mining as an individual prospector. He can be reached at P.O. Box 3104 Reno, Nevada 89505. His information page on prospecting for gold can be viewed at: http://nevada-outback-gems.com/prospect/chris_prospect.htm
Article Source: http://EzineArticles.com/?expert=Chris_Ralph
Robert McEwen, chairman and chief executive of a Canada-based gold mining company is very bullish on the future outlook for gold. "I expect it to test $850 by the end of 2008, and by the end of 2010, north of $2,000, possibly $5,000," McEwen stated in a recent interview. Strong gold and commodity prices are spurring investment in the search for new deposits by many mining companies across the world. His company is currently exploring for gold on mineral lands in central Nevada and expects to spend about $50 million to develop the site over the coming years.
Gold is seen as a profitable opportunity by many investors, having risen over 50% during the last two years, from $430 per ounce in May of 2005 to its current spot price of around $660. While McEwen’s price projection is considerably above the current spot gold price, he is not the only industry executive who foresees steeply increasing prices in the near future. The former CEO of a large well known US based gold mining company, Pierre Lassonde, believes gold will reach $750 by Christmas of this year. In spite of the price increases in the past several years, actual production of newly mined gold from most nations continues to decline, as costs rise at existing mines.
In spite of the fact that gold prices have been rising toward their May 2006 peak of $725, they have failed to break above the $700 mark this year, and are still seen as consolidating after the sharp run-up in prices last year. In addition, selling of the gold reserves of certain European nations, most notably Spain, is seen as depressing prices in recent weeks. Silver prices have also remained strong.
Many experts believe that although demand from jewelry makers will likely drop off as gold prices rise, it is likely to be more than made up for by increased purchases from investors who are seeking a liquid investment alternative to the dollar. Investment in gold and silver for both large and small investors has been made considerably easier in recent years with the creation of Exchange Traded Funds – funds whose assets are gold or silver held in storage. That expected increase in investment demand, coupled with the declining value of the dollar, rising costs to mine gold and the geopolitical risks around the globe, should tighten the supply and demand picture for the precious metal providing the driving force to move prices upward in the coming years.
The author is an independent investor and not a consultant, advisor or broker. The information and opinions expressed in this article are presented for educational purposes, and are not intended to be used as investment advice. The reader is strongly urged to fully identify and consider all the risks before making any investment.
For more information on the case for investing in gold can be seen at the authors website at: http://nevada-outback-gems.com/gold_invest/investing_gold_case.htm
Chris’s Web page and BLOG on investing in the gold and the stock Market can be viewed here: http://nevada-outback-gems.com/gold_invest/Investing_Gold.htm
Chris Ralph writes on small scale mining and prospecting for the ICMJ Mining Journal. He has a degree in Mining Engineering from the Mackay School of Mines in Reno, and has worked for precious metal mining companies conducting both surface and underground operations. After working in the mining industry, he has continued his interest in mining as an individual prospector. He can be reached at P.O. Box 3104 Reno, Nevada 89505. His information page on prospecting for gold can be viewed at: http://nevada-outback-gems.com/prospect/chris_prospect.htm
Article Source: http://EzineArticles.com/?expert=Chris_Ralph
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