On the Road to Riches via Gold, Silver, and the PM Markets

Seacoast Consulting is a bit of a unique site. In many ways, it’s an educational one but it exists primarily to assist both the neophytes and the experienced investor understand the nuances of the junior gold market which is a complex and uniquely idiosyncratic arena in which to invest your speculative funds. In order to acquire that understanding we have to repeatedly revisit the basics of these markets. It’s also an “idea” site with specific recommendations for a conceptual portfolio.

We will soon be highlighting specific companies for your review.

Leverage and timing are the keys to the junior mining sector. But you have to understand that it is a high risk, high reward venue. Leverage is the reason why we have the high risk because frequently one is investing in mining shares selling for pennies. Hence, we have the leverage. By the same token, if those junior mining companies discover a valuable mineral deposit, one could become considerably wealthier when those penny shares double or go to “ten baggers.” Hence the high reward. However, the risks can be minimized while maximizing the possible rewards.

On the road to riches it is imperative that we understand some of the “highway markers”.

Leverage, Timing, Knowledge, and Patience

These are a few of the keys to being a successful investor in quality junior mining companies along with the belief that we are in the mother of all bull markets in gold and silver. These are a few of those highway markers.

There are many ways to invest in gold and silver. First and foremost, I advise folks to acquire a position in the physical metals. After that, and only after that should we explore the junior mining companies, the senior mining companies, futures, options, and other exotic investment vehicles.

However I must say that I don’t believe that the neophytes or newcomers to this community should be involved in any type of options or futures trading. However, if you do feel compelled, look to Roger Wiegand or Enrico Orlandini for guidance. Before putting real money on the line, you might consider “Paper Trading” for a while.

A Recommendation for Physical Purchases

If there is but one company I would recommend for your purchases of physical metals, it would be Camino Coin in Burlingame, California. Ask for George or Parker and mention my name. I believe you will be well satisfied; especially if you take the time to shop around. Consider one ounce American gold coins and pre-1964 Silver Coins for purchase. Stay away from numismatics and whatever you do stay away from all magazine ads and specials being promoted by “The Frontier American Mint” or some other equally patriotic sounding entity. Numismatics are really a niche within a niche and it takes experience and expertise to be successful to be successful in that niche.

The phone number of Camino Company is 1.800.348.8001 or 1.650.348.3000. They ship all over the US in well packed, well concealed packages. They ship as Camino Company and none other than Ron Paul helped in setting up this company with his friend Burt Blumert, who can be found working on Ron Paul’s campaign and working with Lew Rockwell.com.

We are a small community about to get much larger.

I would like to bring up one side note here, and that is we are but an infinitesimally small number of investors involved in this gold and silver market at this point in time. I think this is especially true in the United States. However, when the issues become clear, the dust settles, we discover whether we are in an inflationary or a deflationary environment, and when the general tenor of the market is truly understood, gold and silver will reign supreme. Investors will flock to these markets. I firmly believe that the junior mining companies of any substance will trade like the dot-coms traded back in 2000. There is one problem and that is that quality is not going to be the main ingredient in whether investors become involved in Company A. or company B. We will have what is known as momentum investing; something almost akin to day trading. This is not a good thing. We want to become involved in companies that have the big five: experienced management, quality projects, the ability to fund, the willingness to promote, and integrity. I’ve been preaching this for close to five years now and I don’t see that I will be changing my tune any time soon.

Before I can start recommending gold and silver companies, for my own portfolio (of course), we have to understand the US and how it interacts with the world at large; especially in this geopolitical environment. We have to understand several major areas of geopolitics and finance; all with the post script: what are they doing and where are they going?

1. The US Dollar

2. Inflation or Deflation

3. Gold, Silver, and the Precious Metals Complex:

4. The US Stock Market

5. The US Economy

6. The Global Economy

7. The Junior Mining Sector

8. The Global Investing Sentiment vis a vis the US Middle Class

9. The War or Conflict Factor vis a vis the Infamous Military Industrial Complex.

10. Where we are individually with our own personal finances.

These are the top ten critical areas that need our understanding if and when we invest in the Junior Mining Complex (JMC). They would certainly impact our decision in terms of whether we buy and sell, or preferably buy and hold gold and silver or their equivalents.

I would like nothing more than to rattle off a list of junior mining companies or gold companies that are going to make us tons of money. There is a possibility, a very good possibility, that we might just be able to isolate some big winners. But before we list all of these companies, many of which have been written up previously, I feel we really need to understand the basics. The only problem is that the basics are constantly changing and therefore we must constantly change in order to stay current.

For instance, when was the last time you heard about gold or silver being written about in the general financial press?

Why are the Juniors not moving?

The gold market has been hovering around $800 an ounce with the universal question being why are most of the Juniors not moving? I would answer that by saying this has been a stealth market in gold and silver. That is to say most individuals are not aware of the positive moves gold and silver have been making. It’s very interesting that when gold rises by $25 an ounce in a session, there is no mention of it. However, when gold goes down $25 an ounce there is a cacophony on CNBC.

Wall Street, the government, and the powers that be do not want you to know how to protect your assets. More importantly, the government needs to protect their assets and their main asset is the US dollar. The US dollar is the common stock of America if you will.

Never forget that gold and hard assets will always compete with fiat paper. If you can get that into your thinking, I was going to say to your head but that is not very polite, you will have learned an enormous lesson. That lesson is simply that the government has its own agenda and its agenda is not the same as the average working person in this country. The government needs to maintain its currency and Wall Street needs to sell its paper, i.e., stocks and bonds.

Whose Special Interests are winning the Game of Transparency?

You will often hear me say things along the lines of I appreciate the principles upon which this country was founded. Inherent within that comment is simply the fact that I don’t agree with the way the country is being run, nor has been run, over the past 20 or 30 years. Our actual participation in our government is becoming less and less and our voices are becoming fainter and fainter as the rich and powerful interests become ever more affluent and able to generate their own agendas at the expense of the working man. These are facts that we must understand. Again, paper money vis-à-vis the US dollar, the Euro, even the Swiss franc, are all interwoven in a web of promises, “I owe yous”, and “we’ll make this up later”. Well guess what, later has come.

Guys like Jim Sinclair have been pounding the drum about protecting ourselves as have been guys like Bill Murphy from the LeMetropole Cafe, and Jim Willie of the Golden Jackass Website. Under our Writers and Analysts Menu on our site, www.seacoast-consulting.com we have listed some fine letters and websites where you can acquire a great benefit. Listen to them. I am but a messenger. I don’t hold a candle to them when it comes to their analytical capabilities. But I know good thinking when I read or hear it.

I will tell you this, most of the avenues of information that you require in order to become better investors are listed on our site. It takes time and a certain amount of money to subscribe to these letters but in the overall scheme of things, if you have assets, you’ll want to protect them. Incidentally, your family is an asset.

There is no better way of protecting your assets than gold and silver along with shares in quality junior mining companies. The junior mining companies are so important because they offer leverage. It’s not necessary, not even recommended to put a majority of your finances or investing capital into these companies. But there is time to avail yourselves of some incredible opportunities.

The path to riches runs through your own mind. Your mind is your most valuable mine! On every level: intellectually, metaphysically, and emotionally you hold the keys to your own successful financial. An no, it is not too late to become involved.

Until next time,

D. Stewart Armstrong

Consultant to the Junior Mining Community

Posted by D.Stewart Armstrong in Articles