Big Money Moving Into Mining Shares

With the recent move up in the prices of the precious metals, it looks like Big Money may be moving into the mining shares.  In just the last few weeks many of the gold and silver stocks are up 20-40%.

According to Gene Arensberg at GotGoldReport.com:

In case one might have wondered if we can point to evidence of strong positive money flow into the miners, well, take a look below.  We just don’t see this kind of powerful chart action all that often.  It most definitely suggests a flood of funds into the miners which itself suggests that Big Money suspects a bottom has been made.  We’ll see soon enough.

Mining Shares GotGoldReprot

I have to say, sentiment in the mining shares is at an all-time low.  While I realize Jim Willie and many other analysts such as Andy Hoffman do not like the mining shares (for justifiable reasons), I believe we will still see huge gains in some of these mining companies in the future.

When the revaluation of the precious metals finally arrives and the prices of gold and silver shoot up higher, the public will finally wake up.  Unfortunately, physical metal will be hard to come by.  Thus, the mining shares will be the next best thing.

That being said, the mining shares are not for gambling, but rather a place to invest “Surplus Capital” after an individual has a nest egg of physical bullion as well as emergency preparations to be sustainable in case of a disruption in the supply chain system.

It is hard to know how things unfold in the future.   Many think BAU- Business As Usual will continue for quite some time, however I believe the U.S. Dollar and broader stock markets will run into trouble sooner than later.

You should only invest in mining shares with surplus capital that you can stand to lose.  I know some individuals who are heavily invested in the mining shares with very little held in physical metals or bulk stock supplies.  This is not a wise investment strategy.

Lastly, while peak oil will put a cap on global GDP growth, I believe the primary gold and silver miners will prosper for quite some time.  I will be writing more on this issues in upcoming articles and Reports.

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11 Comments on "Big Money Moving Into Mining Shares"

  1. Silver Curious | June 19, 2014 at 1:32 pm |

    I picked up some mining shares recently …. but I keep the majority of my precious metals allocation in Bullion.

  2. I hold the bulk of my allocation in bullion but I am waiting for Steves paid report before moving into the mining shares. I believe that most (if not all) newsletters cannot be trusted when it comes to mining shares.

    I still can’t make up my mind whether I should purchase more PMs or put some into shares for a change…

    • Silver Curious | June 19, 2014 at 3:46 pm |

      Personally, I wouldn’t buy mining stocks as a long-term investment … there are too many risks hidden deep in these companies, and when problems bubble up to the surface; the selling occurs by insiders before these problems become public knowledge leaving retail as the bag-holder.

      IMO, mining shares are only good for short-term technical trades, as the pitiful dividends the mining shares pay are not enough to offset the risk of holding the high risk dilution prone mining shares for very long.

    • It’s a rare place in time where the shares have been so oversold in relation to AU/AG. Buy the shares now.

      “Never take counsel of your fears.”

      Stonewall Jackson

  3. youse pays your money….and youse takes your chances…..shares are for leverage….bullion is for keeps….imho

  4. I don’t buy individual mining companies. Instead I own GDXJ and GDX along with lots of PSLV and PHYS. The ETFs work for me with less risk. Certainly I will miss the huge returns of a mine rocketing higher, but so far I love my entry point, the movements on a day like today and the cover of owning a basket of stocks, small and large.

    Tas

  5. A little diversification is ok. But remember, just one bloody strike or a nationalisation can fuck up your ‘investment’. Trying to get out when the paper starts burning, good luck. Shares, on paper, is just a promise, like many other paper promises.

    • This is a good point. As someone looking into MAYBE putting some money into shares it got me thinking about it a quite a bit lately.

      Many shares may be 3, 5, 10 or more baggers but I thought to myself:

      Why bother with shares when physical silver could go up 5, 10 or more times??

      Is there any point in bothering with the mining shares (and all its risks) when physical silver already has so much leverage and the possibility to go much higher?

  6. BetterThanNoSN | June 23, 2014 at 4:33 pm |

    I’m in all of those positions Tas. Another strategy i’m employing is i have big positions in NUGT and JNUG. 3X of GDX/GDXJ. Already up 30% on both of these and will bleed money out of them over time to buy more PHYS, PSLV, SPPP.

  7. Brian Scrocca | June 28, 2014 at 2:45 pm |

    Has anyone considered looking back at the last two bull markets in Gold/ commodities? Respectively I’m talking 1930’s & 1980. Mining shares were one if greatest investment choices. Homestake Mining ring a bell? In the 80’s mining shares boomed into the late 80’s. Economies do not recover with paper mache. They grow being built with metals of all kinds. Mining companies don’t just mine Gold. Other important metals come from these companies like nickel,copper,tungsten,cobalt to name a few. If there is ever going to be a true economic recovery ,there built with metals. This is where true value will be found ,not in those stocks who have shown to be fluffed up with stock buy backs. If we move to a cashless society physical bullion will be relegated to the black market. Not saying to not own it,but if one is a true believer in gold & silvers bright future,then why not miners that are well managed,no debt,43-101 compliment etc. Just like any stock you need to research that company. If miners are not doing well,then where will your hold come from? The Comex? Lol!

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