Golden Minerals Company

Good stuff form Coach - finger crossed also fully loaded..

Hi Bill!
My usual response to the market action this summer has been to turn off the computer and find something else to do, most of the time. I am also happy to be quietly adding to my juniors on stink bids that get filled during trading lows as a result of the poor sentiment and overall weakness for much of the sector. We can be rightly pissed off that the crooks seem to have their way, the complete failure of the regulators to do their jobs, the lack of insight and awareness on the part of the major media, and the ongoing shell game that amounts to business as usual at the COMEX and LBMA. But if we are sincere in our expectations of much higher metals prices in the future, then these takedowns and the ongoing intervention in the free markets do represent great opportunities to buy cheap.

For the last few years, nearly every purchase of silver or gold bullion I have made has been the highest price I have ever paid. And, in hindsight, each of those purchases has turned out to be cheap. I still own every ounce I ever bought.

Most of the PM juniors I own however are a different story. Very few of them are trading today at levels higher than a couple of years ago. This despite the majority of these companies having been very successful to build additional shareholder value. Most of the Mexico producers in my PF are reporting record quarterly production, and many are now profitable after several years of hard work. Yet they are often much cheaper today and I am therefore happy to add to my positions.

I do think we are going to see the mother of all bull markets for these stocks. They are off the lows and have consolidated the issued paper and strong gains from earlier in the cycle, but the big moves lie ahead. To me this episode is very similar to the market climate back in 2000-2002. Those who were aggressive buyers in those years captured huge gains when the market started to heat up. And even then, we never really got to a speculative mania stage. Just the inflow of a small new pool of money was enough to launch stocks several hundred percent. How much higher can this sector go once we get a true sector rotation and the retail investors get interested? How much more cash will flow in when the clueless media finally wakes up to the PM bull market?

Right now the overall sentiment level stinks. The hit count for my website is way down, and I hear from several publications that subscriptions are also down. Trading volumes for the juniors themselves are way down. Even though the companies are enjoying record production and metals prices not dreamed of in years past, the average retail investor could not care less. This is therefore the ultimate buyer's market. I do not pretend to know how much longer these conditions can continue, but I am very confident that the sentiment will be resolved as it always has in the past: with a speculative mania that delivers parabolic gains for the strongest stocks.

Lots of people talk a good game when it comes to being contrarian, but few investors are able to walk the walk. Have you been a buyer or a seller of PM stocks during the last few months? Do you fidget nervously with each severe takedown in the metals? Do you believe the nonsense that appears almost daily in the commentary on the precious metals presented by the mainstream media? It is the attitude and behaviour during times of weakness that define smart money. I am happy to let the majority of market participants scramble for the last 15% of a major move as a cycle matures. The real money is made stepping up with conviction during intervals of fear, panic, or uncertainty.

Forgive me if I am not wringing my hands in anger when the same ole crooks pull the same ole tricks this summer. All propaganda and posturing aside, I think the mania stage for the metals is inevitable, and I plan to be fully loaded and leveraged before that phase kicks in. There is nothing new under the sun and for everything there is a season. The season to cash in on the PM stocks is coming.
Cheers!
MexicoMike