Speaker 1: It's been a long, long, interesting road travel, that's for sure.
But our patience is definitely paying off here now and
it's it's it is a nice feeling. So now you
know our concern is when do we sell and how
much do we sell?
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Terry Lets. Well, what can
you say about these metal markets right now as we speak? Well,
gold thirty five seven and change silver forty one thirty eight.
Silver hasn't been this high? Well, gold is trading in
a record, but silver has not been this high since
twenty eleven. What a year that was. And with us
now is David Earthly. Of course you'll find him at
Junior Minor Junkie dot com. That's Junior m I N
E R Junkie j U n K Y not j
U n K I E. Which is something else all together, David.
I mean I saw you like you were dancing on
your desk when we first started talking here. What can
you say about this market that hasn't already been said.
Speaker 1: Well, I stopped. I stopped dancing on desk quite quick,
quite a while ago. But in my mind, I'm dancing
on my desk. Yes, it's it's happy times for us
here in the sector. For that, we've been waiting for
these happy times for quite a while. I mean last
year we had the gold price go up twenty seven percent,
and then in the end the miners were only up
thirteen percent, providing just a half a percent leverage. So
now we've got the gold stocks catching up to the
gold price. We had the gold price hit an all
time high a thirty five hundred back in April, and
as we speak right here, we got gold futures banging
on the thirty six to fifty door here. So the
gold price had gone sideways throughout the summer while the
gold stocks were catching up big time. Because in that
time we had the miners produce outstanding free cash flow
for two consecutive quarters. When they when they announced blowout
earnings and Q one and Q two that was happening
while the gold price was going sideways. And also their
costs have pretty much remained in place while the gold
price has gone through the ceiling here, So the gold
stocks are catching up to the gold price. And now
the juniors. Last week, a lot of these lagging juniors
are exploding out of these huge multi year bases and
they're catching up with the majors. And at the same time,
we had the silver price at fourteen year highs, trading
over forty dollars for the first time in fourteen years.
But and now the I think December December silver is
over forty two dollars right now as we speak, and
and the next resistance is like fifty bucks. So yeah,
it's happy times here in the sector.
Speaker 3: Yeah. Well, so if you were a subscriber, did Junior
mine a junkie and let's just say, you know somehow
you discovered it two years ago, where would your portfolio
be right now?
Speaker 1: Your portfolio would be about one hundred and thirty five
percent higher, while the while the GDXJ is probably about
eighty percent at higher. So, because what happens when these
bull markets get going in the sector is the juniors
begin to outperform the miners in a big way because
and before then we had the juniors underperforming the miners
while the miners were underperforming goals. So the past few
years have been kind of sparse as far as profits
were concerned, but they were a great time to accumulate
positions in these companies with huge upside potential once the
conditions are in place like right now for them to
go higher. So a lot of patiences is required while
you have all this time to accumulate these companies. And
that's what my subscribers and I have been doing over
the past couple of years. And this year that patience
and that due diligence is paying off in spades.
Speaker 3: So is it too late? Have you missed the party?
Didn't He didn't?
Speaker 1: Well, I mean as far as as far as getting
into the sector at lower risk prices, it's it's later
than it was before. Absolutely, But this this up leg
is getting stretched and we're due for an interim peak.
We might even hit it, might have even hit it
today as far as the GDX and GDXJ is concerned.
The GDX touched got close to its all time high
this morning at sixty six, that's not adjusted for not
adjusted for dividends. But the last time but when it
did hit that sixty six was back in twenty eleven
when the gold price was attempting to run to two
thousand dollars announce I remember. Yeah, So as far as
an interim peak is concerned, we're either added interim peak
or close. So there is some consolidation up ahead, but
as far as the big picture is concerned, we still
have a long way to go, I believe. And also
if you take a look at the gold price that's
getting stretched also, but the golds dice, you're rarely disabled
your internet connection in computer for suspicious activity for I.
Speaker 3: Don't know what the hell that was. Sorry about that,
I'm just making it's okay, Yeah.
Speaker 1: That's okay. So the gold price is breaking out of
this five month symmetrical triangle now and it's target the
symmetrical triangle breakout is like thirty eight fifty to four thousand,
so and I wouldn't be surprised if that's hit pretty
quickly because momentum based traders have come into this market
at the beginning of September year while the stock market
is rolling over, they take a look at the S
and P five hundred rolling over, and if you look
deep into the s and P five hundred, what's the
what's the number one gainer in the s and P.
It's Newmont, It's mol right, and it's the only gold
stock in the S and P five hundred, and it's
doubled its price stock price is doubled. So you're so
you know, imagine you're you're a fund manager, you're coming
back from vacation and you see this and if you
if you you don't have as much gold exposure as
you like, as you'd like, then you're buying Newmont and
you're buying and you're buying some majors. Even though the
price is a bit stretched. It's the gold stocks are
still under value bases the gold price because the stock
market is just now beginning, I believe, is the market
is just now beginning to price in a solid floor
three thousand dollars gold. And these companies are producing gold.
The average all in sustaining cost of producing and now
it's of gold now is between sixteen hundred and sixteen
hundred and fifty dollars. That's huge margins. And yeah, and
Numont just free cash flow alone. In Q one, Neumont
produced a one point five billion in free cash flow,
and then Q two one point seven billion. I mean
that's a run rate, a full year run rate of
over six you know, six and a half billion dollars
of free cash flow. So you take a look at that,
and you take a look at at at the other
sectors in the S and P five hundred, you know
their price to perfection, and they've already gone on these
huge runs sold. The gold stocks still have some catching
up to do, even though we're due for for some
some healthy profit taking here.
Speaker 3: So m and a activity because while it's all Rosie
for the for the new months and the barracks and
the agniko the Agnikos of the world, but they're running
out of gold here, they're producing it way faster than
they could replace it. When does the scramble happen? And
will they avoid the mistakes in the.
Speaker 1: Past or yeah? Absolutely, I mean that's that's what's on
on investors' minds now right. I Mean they're saying, Okay,
you've done a great job showing up your balance sheet.
You've got fantastic balance sheets. Now you're buying back shares,
you know you're paying, you're paying healthy dividends. I mean
when I got into this sector, you know, over twenty
years ago, it was unheard of for a mining stock
to may a dividend. And now they're paying healthy dividends.
They've they've got strong balance sheets, unlike what they had
at the top of the last ball market in twenty eleven.
You know, they didn't really have you know, healthy balance sheets,
and they ended up going out and buying buying low
grade bulk ton ofjounces at top prices, thinking the gold
price was going to continue to move higher forever. And
I think they've they've learned from those mistakes and they
are a lot more cautious and they've been proven to
be so. But if you take a look at what
the juniors are doing now, you know, we're coming up
at these conferences here at Beaver Creek and then followed
by the Denver Gold Forum here next week, and this
is where this is where these guys get together and
they talk about M and A and they need to
replace these ounces now. So I wouldn't be surprised to
see some high profile M and A announcements come out
of these conferences. And you know, once it starts to happen,
it's snowballs, and then I also would be surprised that
you know that we we see an announcement of of
of a junior being taken over by a major and
then we get into a bidding more. That's what we
really want to see. That'll really get the M and
A juices flowing and it will get sector investors even
more excited.
Speaker 3: And there's so few high quality juniors out there that
the silver, especially silver, you know, yeah, totally so, so
when it does hit, it's going to hit big, and
it's going to hit hard. Where do you want to
be when this happens.
Speaker 1: He's come off the board. You know, we we saw Gattos,
We saw Silvercrest taken over by Cordeline, So you know,
they understand that that that that primary silver projects, especially
high grade primary silver projects are rare. So I think
they're gonna they're gonna be going down the food chain
and be taken over some of these some of these
juniors that are de risking, these these projects that are
yet to be in the finance stage. So I think
that's that's in our future where where these majors start
to go down the food chain, and they're going to
take a chance and go in and buy them out a little, right,
they're getting a lot higher.
Speaker 3: So, uh, what about the fact that the US government
is poised supposedly to put silver and copper and potash
on the critical Minerals list. That seems to have been
the spark, the catalyst that set off silver at this
point further.
Speaker 1: Right, and Saudi Arabia getting into silver as well. I mean,
that's that was that was huge news.
Speaker 3: Yeah, so we were ahead of them all, you and
I David Right.
Speaker 1: It's been a long, long, interesting road travel, that's for sure.
But our patients is definitely paying off here now. And
it's it's it's it is a nice feeling. So so
now you know, our concern is when do we sell
and how much do we sell? Right? So, I mean
you have to have before you buy anything, you have
to have a sell strategy. So and that's especially the
case in these junior stocks because they're you know, they're
like lit matches. They don't they they have these huge,
huge runs, and it's always best to say take a
little take a little money, take a little profit off
the table, and you know, get your original investment out
of it at some point it's it's easier to hold
it for the long haul. So you know, depending on
you know, depending on what your financial situation is, depending
on the size of your portfolio. Everyone's got their own
sell strategies, but you have to have a cell strategy
in place because you don't want to you know, you
don't want to end up having emotions, you know, run
your you're buying or you're selling. You wanted to make
informed decisions on buying and especially selling. You know, you
have a target when am I going to take some profits?
Because the ultimate goal when you get into a junior
is for a takeover, right, I mean, that's the great
thing about these things is you get into something you
know it looks as you're holding it. The company's doing
all the right things, raising money at the right time,
keeping the share, keeping the shareccount low, putting out you know,
positive economic studies, and it looks like the company, Wow,
this is I've got a good one year. It looks
like it's going to get taken out. Okay, at what
point am I going to take out my original investment
and hold the rest for a buyout? And then hopefully
that buyout comes a lot farther down the road while
the stock goes up on its own before it gets
taken out of a higher premium.
Speaker 3: Yeah. Yeah, so the old saying you never go broke
on Wall Street taking a profit, right.
Speaker 1: Right, that's right. You know, bulls make bulls make money,
Bears make money, but biggs get slaughtered, especially in this sector.
If you if you're you know, I've learned, you know
I've I've had so many profits that I that I
that I've left on the table, but they were all
they were all good learning experiences, right, I mean, what
happened here? Why did I Why did I end up
not taking more profit in this stock? This is why
I'll make sure it doesn't happen again. You take all
these life lessons in this second, you apply them to
your cell strategy. It's because it's a it's a it's
a it's an ongoing it's an ongoing lesson. You know,
there's so many lessons that you learn in these You
never know anything. Something always comes up to where wow,
I didn't even think of that as far as a
reason for a stock selling off or whatever. So you know,
no matter how fantastic a project looks, anything could happen.
So you want to have you want to have some
you want to take a little bit of profit on
the way, for sure.
Speaker 3: How many times in your career here was a later
career in your life, have you seen a stock that
you thought was absolutely amazing, that it was, you were
going to retire on it, and some reason unbeknownst to
you but well known to the insiders, it blows up.
Speaker 1: Yeah, I mean, I don't have enough fingers. I don't
have enough fingers to count how many times that's happened,
you know. So, and that's what draws us to this sector,
right It's it's literally like the wild wild West, you know.
You could you could pick a stock that you say
to yourself, my god, this is the one, this is
the one I should really load up on. And I
learned a long time ago never put any more than
five percent of your investment capital into one stock. Is
Anything could happen. Anything could happen at any time, and
it might not. It's usually not the fault of the
management of the company. It could be the jurisdiction therein.
You know, something happens with the government and they decide
to do something in the mining sector that just takes
you by surprise, and no matter how fantastic your project is,
it's screwed because they change the law. So anything metal urgies,
you know, some metal urgy out of the blue, could happen,
you know anything, And I'm not a geologist, so it's
it's it's behooved me to to find out, you know,
to basically hone your cell strategy to where you're in
a you're in a good place when we're when we're
in a place right where in a place like we're
at like right now, where we're seeing we're seeing all
these profits coming into our portfolio rapidly. So you got
to have that planted place because you don't, like I said,
you don't want to have emotions make the decision for you.
Speaker 3: Okay, so is it a good idea to sell half
when you got one hundred percent run?
Speaker 1: My strategy is, well, first of all, I don't get
into any junior unless I see at least three times
upside potential. So based on that, when a stock triples,
that's when I take my original investment off the table,
and I've got twenty positions in my junior minor junkie
real money portfolio right now. That that my subscribers all
also follow Four of them now have tripled, and we've
taken our original investment. Out of four of them, there's
two others that are close to doing the same and
several others that are not far away. So once that happens,
you know. And I also learned that I always take
my profit completely out of the portfolio, right, I mean,
I've got so much money invested in these things that
I don't want to reinvest profit, so I take the
profit out at the end of each year.
Speaker 3: Okay, Well, that is some sage advice for those of
you out there who haven't really experienced as many cycles
as David and I have, and who think there's this
sure thing, this miner that they're doing a deep sea
mining in the Pacific and hoping to find Limuria, the
continent of Limuria while they're at it, and nothing can
possibly go wrong. But this is the riskiest business in
the world, and like you said, perfectly honest management, it's
not a lifestyle company, which you should always avoid. And
all of a sudden and that's why diversify. Don't put
it all there, David, how do we get your.
Speaker 1: Publication, juniorminor Junkie dot com with a Y j U
n k Y. That's my website, and I also write
a column on Kitko. Comes out on Fridays every usually
every usually every Friday, but in the summer I've been
taking a lot of Fridays off. But you can find
me at Kitko and you can find me on my
website at Junior Minor Junkie dot com.
Speaker 3: All right, great the links in the show notes of
this interview on Financial Survival Network dot com. But I
really moved that over to substack. Got tired of the
website grind. Substack does all that stuff for me. You
can get virtually everything for free. If you want to
give me money, I'll take it, but you don't have to.
But there's some specials that you want to subscribe for
and questions comments kl at Carrie lets dot com. David,
we'll talk to you again, hopefully in a month and
more good news.
Speaker 1: Thanks again for having me on carry look forward to
speaking to you again.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network
Speaker 1: Now more than ever