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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Canuck Dave who wrote (7160)	1/30/2003 2:46:56 PM
From: loantech	Read Replies (1) \| Respond to of 39344

CD, I added CDU yesterday and now we got the rally when you sold. LOL. I think trading the silver stocks is pretty tricky so I am buying and holding on the CDU. Own any RDU? I added it today. Tom

To: Canuck Dave who wrote (7160)	1/30/2003 2:51:07 PM
From: ralfph	Respond to of 39344

A little blurb from Jim P TEP ONE Here’s how to play their game. First, find a stock you believe in -- especially if it is a junior. Make sure it is a credible junior. Look for large reserves that have been verified by a credible engineering company. Some juniors I know of are nothing more than a Potemkin village; heavily promoted and publicized with very little reserves. If they do have reserves, they become recoverable only under higher gold prices. You want to avoid owning these shares until the third phase of the gold bull market when John Q jumps on board. John Q will be buying anything the investment bankers sell them. STEP TWO Once you find a company you believe in, go to their web site and download their financials. Look at how management has run the company. Pay special attention to the reserves added each year. If possible, break it down to reserves per share. Then look at debt. In the case of juniors, avoid all companies with a heavy debt burden. Being debt-free gives a junior a greater chance of survival. In the exploration business, you don’t want to have the threat of a debt burden put the company into bankruptcy. Next, look at the shareholder dilution. What has management done for the shareholders in creating value? Value is accomplished by adding more ounces of reserves to the balance sheet per each dollar of equity. Also look at total shares outstanding on a fully diluted basis and the float and short interest. STEP THREE Once you have found a good company, then look at a chart of its stock. Pay particular attention to volume. Most juniors and second-tiered gold companies are thinly traded. It doesn’t take much to move the price of the stock. What you want to look for is the average trading volume of the shares. This becomes important when you begin your accumulation of the stock. Finally, find out the short position and how large it is to the average daily trading of the shares. I prefer to buy when the short position is huge. My orders are easier to fill since short sellers want to keep the price of the shares down. Once you begin building your position, move to STEP FOUR STEP FOUR Hold your position and don’t panic when shares prices correct. Instead, use those times to add to positions, especially when short positions build. There is a huge supply deficit that is going to have to be filled. The majors have stopped exploring for gold and the only way they are going to replace their reserves is through acquisitions. Your liquidity will come through a buyout. Think like Warren Buffett. Buy a good company at a good price, then have the good sense to hold on until your beliefs are recognized by the investment public or a major or second-tiered gold producer who will be looking out for smart acquisitions. Not bad advice CKG may fit the outline As to the stock companies not following gold. THATS BECAUSE ALL THE PEOPLE WHO FOLLOW THE GOLDS ARE ON BOARD. We have spent our cash. The new investors will not be on board for awhile yet. The new investors will arrive about the time we start thinking that the stuff is overpriced. Where is that ? 350 gold was the average price over the last 20 years . What with inflation and such to be factored in gold has along way to go yet. Remember when it was hard to get the urge buy ELD at 22 cents and all the folks who trashed the company ? That was PM guys talking to PM guys.I find it a little hard to buy the stock today at 2 bucks .I think this pretty much sums up the whole sector. Things have not changed much. Look at who is posting. Most of us have been following the PM market for years .All gold has done is creep off its bottom. This is kinda like a long distance race. The whole PM sector is just one runner (Who stepped behind the bushes for a puke ) we can see that he is back in the race . But no one else really cares...... Just wait until he is at the front of the pack. Then things will get interesting. back to work ralfph