A Message From John Doody
I’VE NEVER MADE THIS CALL… UNTIL TODAY
September 9th, 2019
The September GSA-10 issue includes an update on the Top 10 port- folio… data on all GSA covered gold stocks… and profiles of all eight royalty companies in our coverage universe: Franco-Nevada, Osisko Gold Royalty, Royal Gold, Sandstorm Gold, Wheaton Precious Metals, EMX Royalty, Maverix, and Metalla. Last month… I went out on a limb and did something I’ve almost never done in the more than 25 years I’ve been publishing Gold Stock Analyst.
On August 21, I predicted gold would hit $2,500 an ounce.
If you’ve only recently begun reading GSA-Pro, please understand… I never predict gold’s price… After all, our track record proves that we can find winners even when the metal’s price is flat.
But the current conditions are perfect for a big bull market, and I expect the past to once again repeat. In fact, past data suggest gold will run up to $2,500 an ounce before we’re done.
This gold bull market began just over a year ago, on August 17, 2018, after the metal bottomed at $1,178 an ounce. From then on, it’s been a profitable ride higher to $1,507 an ounce on September 6, 2019 – a gain of 28%.
HOW I MADE $1,020,740 IN 18 YEARS, WITH MINING STOCKS, USING THE GSA-15 JOHN DOODY METHOD.
That’s great, but the GSA Top 10 stock portfolio has performed far better, up more than 75% over the same period.
Gold has further to run, as its sanctuary status remains intact and the underlying drivers for a higher price continue in place:
1. The inversion gap between the yields of the 10-year and three- month Treasurys has widened to negative 0.5% (see graphic), a record since the gold bull market of 2006 to 2007. (Remember, long- term interest rates are almost always higher than short-term ones. Six of the seven inversions since Nixon freed the gold price in 1971 led to bull markets. The seventh was stymied by the Fed jacking up rates to 16%.
2. The worldwide economic chaos continues, between the U.S.-China trade war… weak U.S. jobs data… Brexit… and an export-driven Ger- many leading a European slowdown.
3. The U.S. dollar has been in an uptrend over the same period. The U.S. Dollar Index (DXY) hit its low on September 20, 2018, at 93.91. It has lurched higher since then, closing at 98.39 on Friday. Gold and the dollar don’t historically march together… But they do now, as investors view both as safe havens from economic chaos.
We expect them to part ways soon. The coming 2020 election will see interparty warfare and stock market uncertainty over the November outcome. This will hurt the dollar and leave gold as the favored safe haven.
That’s why late last month, I made my prediction on gold prices. And it’s also why, for the second month in a row, I’m raising the target prices for all the stocks in our Top 10.
A MESSAGE FROM JOHN DOODY
When we published last month’s issue, gold was dancing around $1,500 an ounce. We used that price to reset target prices for the Top 10. It was the first time we upped the baseline gold price for our assessments in a couple years.
Now, with gold better established above $1,500, we’re doing it again. We are comfortable with our “$100 above spot price” rule to set tar- gets. So this month, we’re adjusting operating cash flow (“OCF”) forecasts and our target prices based on $1,600-an-ounce gold.
Recall that we then multiply each miner’s OCF by the industry’s aver- age multiple (with several exceptions) to estimate future stock prices. Until this month, we have used a 6 times multiplier. But as the chart on page 4 shows, the average OCF multiple since 2008 has increased to 6.4 times. We will now use that as the OCF multiple to set target prices.
As We Publish, Is History Rhyming?
This past week, as expected, we saw the Federal Reserve cut its benchmark Fed Funds rate by one-quarter of a percentage point to a range of 1.75% to 2%. But that was not the highlight of the week.
Instead, other action taken by the Fed had seasoned market watch- ers like myself wondering if we were seeing a ‘Mark Twain moment.’ I am referring to a famous quote, often attributed to Mark Twain: “His- tory doesn’t repeat itself, but it often rhymes.”
The ‘rhyme’ occurred when the Federal Reserve was forced into tak- ing action that it had not done since the financial crisis over a decade ago (2008). Let me explain…
The Fed Injects Liquidity Into the Financial System
The cost of borrowing cash overnight for banks via repurchasing agreements, known as repos, surged on Tuesday morning to as high as 10%, a more than fourfold increase from Monday morning and well above the Federal Reserve’s Fed Funds benchmark.
This reflected a pretty sizable dislocation between funding needs and actual funding in a vital portion of the U.S. money market system. Repos are vital to the financial system because they give companies access to cash overnight using U.S. Treasuries as collateral.
This caused the Federal Reserve Bank of New York to inject $75 bil- lion into the U.S. financial system on Wednesday, which followed a $53 billion injection on Tuesday. On Thursday, the Fed had to inject a further $75 billion into the system.
So why did this happen?
Complacent stock market participants say that it was just technical. Banks reserves above legally required amounts have been declining since the Fed ended its bond-buying program (QE) in 2014, reducing the amount of cash they are willing to lend through repo operations.
Also, the system came under additional stress companies pulled cash out to pay tax bills. More money left the system as investors settled Treasury purchases after a flurry of recent issuance.
I have no doubt these technical reasons were partially to blame for the Fed’s forced intervention into the market. But everyone, includ- ing the banks, knew all about these factors.
So, as usual, there are likely other factors at play that the authorities don’t want the public to know because panic may ensue.
I spoke to some friends that have been in the bond trading business for over 30 years, and they filled me in on some of the other likely sources of the money market turmoil.
The two most prominent rumors both were related to oil and the attack last weekend on a major Saudi Arabia oil facility. One rumor is that a major reinsurer took a substantial financial hit thanks to that attack. The other is that several large hedge funds – heavily short oil – may now be going under, again thanks to that attack.
The Return of QE
Even if the rumors are not true, the ructions in the U.S. money mar- ket system tells me that quantitative easing (QE) will likely be coming back in the relatively near future.
At the very least, the upward pressure on overnight market rates is saying that there are not enough bank reserves in the system, which has shrunk to $1.4 trillion today from $2.9 trillion in 2014.
The current figure of $1.4 trillion in reserves appears large, but it really is not once regulatory, and liquidity requirements (about $1 trillion worth) are calculated for banks. So, banks have little spare cash to deploy when financing conditions deteriorate like they have this past week.
The solution to this problem that many are pointing to is for the Fed to expand its balance sheet once again. In other words, more QE.
Analysts at Bank of America Merrill Lynch said: ”The Fed will likely need to purchase $250 billion in assets in the secondary market to return to an ‘abundant’ reserve level plus a buffer, and will need to continue outright purchases of ~$150 billion/year to maintain this reserve level. In sum, Fed purchases could be $400 billion in the next year.”
While the resumption of QE will be music to the ears of the stock market, it will also sound a similar tune in the precious metals market.
Gold, in particular, will benefit. Here is an interesting bit of informa- tion I want to leave you with that I found in a recent tweet from Char- lie Bilello, director of research at Pension Partners:
• In the past 20 years, gold has returned more than 485%. That is more than the return from Warren Buffett’s (who dislikes gold) Berkshire Hathaway of 426%.
That only reinforces my view that gold is a good insurance policy to have to protect your financial assets since it does best in times of tur- moil and ‘rhyming.
The above “citing” (encompassing Chapter 1) was taken from Gold Stock Trader, September 21 2019
After the devastating crash of 2000, Monica, my wife, and I began to look to other investment sectors, besides the general market and technology stocks. Heading into 1999, our trading account stood at almost $2 million, half of that profit. By February of 2000, our account stood at $1 million, as a result not getting out before the tech bubble burst.
The Fed, in Mid 2000, gave a signal that in order to revitalize the econ- omy, it would have to lower interest rates to levels not seen before. It was hoped that this would entice investors back into the stock and real estate markets. What eventually happened was the formation of a real estate & stock market bubble. Yes, another bubble. But this time we were prepared for it.
It didn’t take a crystal ball to foresee that not only would a real estate bubble come to fruition, but eventually, a precious metals bubble too. Aware of this, we started buying physical gold and silver in 2001; gold at $250, and silver at $5. In 2003, we started buying real estate, and needless to say, did well (as we sold or rentals at the high in 2006). Why? To buy more physical precious metals, and mining stocks, of course. Our timing could not have been better. As interest rates fell, property and precious metals rose (and the mining stocks followed).
The theme of this book is making money, lots of money, with mining stocks. It’ll be short and sweet. We will mention the method that we have used since 2001, the record, and how we tweaked our methodology, by adding a “timer” to the mix.
What we are about to tell you in the next few chapters is all you will need to set your investment account on “auto pilot”. Will the 1,295% results that we got from 2001 to September, 2019 repeat? We think so, but as an adviser, I must say the magic legal phrase: “past perfor- mance is no guarantee of future results.”
OK, on to the program I used, still use, plus a little about our new #1 timer of the year, Mark Leibovit.
In summary, for the next few years, follow us with our weekly newsletter. Watch us invest at Interactive Brokers (U.S. or Hong Kong). 100% of our funds will be invested in the Gold Stock Analyst program. As John Doody changes his investment mix, so will we. Enroll in our free newsletter to find out when our timer Mark Leibovit recommends that clients go to cash. Go to firstname.lastname@example.org to subscribe. Or, better still, open an account at Interactive Brokers, and “piggy back” our trades. Call us at 727-564 9416, or Email email@example.com, for the link to be placed under my account.
John Doody And His Amazing Record
In 2001, we started our quest to learn as much as we could about the gold and silver stock sector. One name in particular, kept popping up: that being, John Doody. Having to spend a great deal of time with my clients, I needed a simple, successful program that worked. One that was easy to implement. After reviewing all the experts in the field, the short list was narrowed down to only three: Eric Sprott, Rick Rule, and John Doody. All has outstanding track records, but John Doody’s program was #1, simple to administer, and worked. Boy, did it work, and is still #1 today.
John Doody brings a unique perspective to gold stock analysis. He has a BA in Economics from Columbia, an MBA in Finance from Boston University, where he also did his PhD-Economics course work. Surprisingly, Doody has no formal “rock” studies beyond “Intro- ductory Geology” at Columbia.
An Economics Professor for almost two decades, Doody became interested in gold, due to an innate distrust of politicians, and con- cern over their habit of debasing the currency, via inflationary eco- nomic policies.
As Doody initially studied gold stocks, he had a hard time deciding which to buy. Their share prices, market capitalizations, production and reserve levels were all different, yet each made exactly the same product: Gold.
To solve the dilemma and determine which gold stocks represent the best value at a point in time, Doody popularized a metric called Mar- ket Cap per ounce. This was a method of taking a company’s stock market capitalization (number of shares times stock price) and divid- ing by the ounces Produced per year. This puts all the miners on the same basis, so when buying, you know how much you are pay- ing for each ounce of Production, and each ounce of Reserves. The Market Cap per ounce values are wide-ranging… sometimes justified, and sometimes not. This simply means that “Mr. Market” is inefficient and does not always price a stock correctly, which creates many of the opportunities identified in the GSA newsletters.
A result of this Market Cap metric, Doody’s newsletters cover only producers, or near-producers. Those that have an independent fea- sibility study, validating its reserves are economic to produce. Suc- cess with this method of finding undervalued gold mining stocks led Doody to leave teaching and start Gold Stock Analyst late in 1994 to make his research available to everyone. The results to date have been spectacular. From 2001 to 2019, his GSA top 10 program is up 1,295%, an average gain of 20.3%. When I went to Lehman Brother’s training program back in 1967, I was told that if you could find a mutual fund that grew at 20% a year, your clients would be millionaires in short order. John’s program grew at 20.3% per year, amazing. By the way, Warren Buffets Berkshire Hathaway, during the past 50 years only grew by only 20.1%.
How is Doody doing now?
As of September, 2019, the GSA top 15 stocks were up 38% for the year, hands down, beating the S & P 500, showing a gain of only 4% for the year.
We are throwing a lot of numbers out to you, but the bottom line, both his gold and silver programs are phenomenal performers.
And, the GSA “top 15” results have been audited by the Alpha Perfor- mance Verification folks!
John Doody does not recommend timing your account, and for the most part, we agree with him. But every once in awhile, when Mr. Market (as John calls it), get ahead of itself, we find it prudent to fol- low our market timer, Mark Leibovit move to safety (cash).
These results are so extraordinary, that many did not believe them. So, the Doody organization had every Buy and Sell over that 16 year period examined, and vetted, by an independent auditor, Alpha Performance Verification Services. Alpha Performance Verifica- tion also verifies mutual and hedge funds results, so they knew what they were doing.
The research, analysis and portfolio management methods detailed in GSA’s newsletters, were developed and proven by John Doody. He still applies these same rules for his personal investments, even as he shares them with an ever-growing family of private and profes- sional investors.
To make it onto the GSA “Top 15” list, companies must meet specific conditions:
- They’re must be in or near actual production: The GSA method focuses only on companies that are already pro- ducing gold, or have proven reserves, and are about to commence production.
- They must demonstrate strong technical and business manage- ment capabilities: GSA meticulously studies all relevant aspects of companies under evaluation, including manage- ment teams, production plans and methods, balance sheets and independent analyses of drill results.
- They must be significantly undervalued: For a stock to make it onto the “Top 15”, GSA must conclude that its price has the potential to at least double within three years, based on existing projects, and without any increase in the gold or silver price.
The above “citing” (encompassing Chapter 2) was taken from John Doody’s web- site:http://www.goldstockanalyst.com, http://www.goldstockanalyst.com/why- gold.lasso, Sub title: Philosophy, 2018, John Doody, Author.
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen
Why gold? It’s the most obvious question, but just the first of four questions you should ask, as an investor:
- Why gold
- Why gold stocks?…
- Which stocks?…
- Why now?
- Why Silver?
GSA 15 supplies the answers:
1. Why Gold?
Blame the politicians for continually debasing the U.S. currency. It’s not that gold is “up” so high, it’s that that the U.S. Dollar is “down” so low.
Always running for re-election, politicians try to get nine slices out of an eight-slice pizza. This means they promise voters more benefits than the economy can deliver. And attempting to make good on pledges, they pass annual government budgets with deficits, keep other spending off-budget, and confirm Federal Reserve Chairmenthat see a little inflation as a beneficial lubricant to the economic gears.
Further, wanting re-election means that politicians become slaves to special interest groups and their campaign donations. This means rewarding donors with narrowly defined tax loopholes that cut gov- ernment revenues, and earmark spending to benefit other special interests. Both put a balanced budget further out of reach.
Fiscal policy and monetary policy can both debase the currency. The Treasury issuing bills, notes, and bonds to finance deficits is the same as the Federal Reserve printing money. There is no real difference between a 90-day Treasury bill issued for $1,000, and $1,000 in cur- rency printed by the Federal Reserve. They both can be used to buy that ninth slice of pizza.
What can be done? Complaining about, or to politicians, is a waste of time. It’s their nature to pander to voters and they will never change. The best approach for investors is to recognize the situation, and use it to profit. Over time, most “hard assets” will protect investors from a currency’s loss of purchasing power, simply because their supply, is far more limited than the supply of printed T-bills or Dollars.
But while any hard asset will work in the long term, we favor gold because it is much more liquid than real estate, collectibles, rare art or other investment vehicles.
2. Why gold stocks?
Once one has decided on gold, the next question is the actual invest- ment.
Some might choose gold coins. The safest are those that sell based solely on their gold content, and not rarity, or other qualities, that might cause coins to sell well above their intrinsic gold value. The easiest to buy (or sell) at the lowest premium (or discount) to gold content are the one ounce coins: the American Gold Eagle, the Cana- dian Gold Maple Leaf, and the South African Krugerrand.
Other investors, to avoid dealer markup, shipping, possible sales tax, and coin storage and insurance costs, may choose to buy shares of one of several gold ETFs. Not only are the commissions low, but there are no storage charges and they are SIPC-protected, like all securities in a brokerage account.
But, the gold investment vehicles we favor are gold mining stocks, due to the leverage they offer to gold’s price. This leverage comes from two sources:
- Current production becomes more profitable as gold price increases, thus justifying a higher stock price, and
- Reserves still in the ground become more profitable. With miners often having reserves of ten times the annual pro- duction rate, it’s pretty easy to extrapolate the total profit increase from a rise in gold price.3. Which gold stocks?Investors must choose from two major groups: Explorers, of which probably 1,000 are publicly owned and Producers, of which only about 50 trade in North American stock markets.
To this latter group, we can add near-producers, miners that have taken a deposit through the bankable feasibility stage, and an inde- pendent engineering firm’s analysis. This analysis has shown that:
1) drill holes are spaced close enough to have high confidence about the ore grades in-between the holes, and thus justify the Proven and Probable Reserves (P+P) classification,
2) that the capital investment required to put the site into produc- tion will yield a profit, or economic return. Just as an independent auditor’s sign-off on a company’s financial statement is critical for investors, so too is an independent engineering firm’s sign-off on the deposit’s economics. it’s required by the U.S. SEC, for a miner to be able to call its ounces in the ground. This is called “P+P Reserves”.
GSA only follows producers and near-producers, as they are the only miners with data confirmed by third parties, and thus have solid numbers that can be analyzed.
The gold mining industry is unique. All the miners produce exactly the same final output, ounces of gold. Unlike Coke and Pepsi, they spend nothing trying to tell consumers that their gold is the best. The miners simply accept the current gold price when they sell. With all ounces the same, and selling for the same price, one might think the stock prices would reflect similar valuations for Miner A’s ounces versus Miner B’s ounces. But, in fact, the stock market is not effi- cient and the valuations can vary widely. This gives an opportunity for investors.
Sometimes the different valuations are justified by lower production costs, or the uncertain politics of the nation in which the ounces are located. But sometimes the disparities are not reasonable and the market is being inefficient, and not properly valuing the ounces. These undervalued situations create the opportunities GSA searches for, and are why our portfolio of its “Top 10 Stocks”, has gained an average of over 27.3% per year since 2001 through December 31, 2015.
4. Why now?
The short answer: The “Real Interest Rate.”
New investors interested in gold always fear buying at the top. The negative comments by the know-nothing “talking heads” don’t help (If they’re such gold “experts”, where were their “buys” at $300 per ounce?). GSA has proven we can make money in any gold market by focusing on those miners undervalued versus their peers, based on the “Market Capper ounce” metrics, we use.
But the “newbies” often want the comfort of a single indicator to forecast gold’s future before they climb on board. Our work says the “Real Interest Rate” is the best forecaster. This is the risk-free return on money, adjusted for inflation. We find it by subtracting the CPI from the three-month Treasury yield. When the result is posi- tive, gold is flat. When the result is negative, gold price soars. This is because money loses purchasing power in a negative real-rate envi- ronment and investors seek the protection of “hard assets”.
At the current +1.1% CPI, and a typical 0.1% money market yield, $100 at the start of the year will have only $99 purchasing power at the end.
We see a negative real-rate condition for the next several years as the Fed will be unable to raise interest rates due to the high U.S. unemployment rate. And even when Fed begins raising rates, if it lags the CPI increases as it did in the 1970s, gold will still move higher.
In Doody’s sister publication, GSA-Pro, he covers a universe of 50 gold stocks that have verified reserves and/or production. He evaluates all of these stocks based on current/expected output, reserves, and special situations. From that analysis, he identifies the 10 best stocks to own and set price targets for each. We follow and buy and sell his recommendations within minutes of his texts to us.
5. Why Silver?
In GSA-Silver, he follows a similar approach to covering a universe of around 25 silver producers. GSA-Silver includes a model portfolio of the five top silver miners – his Fave Five.
To get better acquainted with this new addition, Doody’s suggests you read the Gold Stock Analyst Starter’s Guide. This will explain our view of gold and gold stocks as an investment… detail how he ana- lyzes the stocks in his coverage universe… and explain his trading strategy to ensure we maximize your gains from investing in his model portfolio.
COMMON INVESTOR MISTAKES:
Investing in gold and silver stocks is a game of patience and propor- tion. Here are the most common ways investors get it wrong:
1. Too few or too many stocks.
Owning only several gold stocks increases the likelihood that a prob- lem at one will wreck havoc on your portfolio. Don’t try to “swing for the fences with just a couple…” With over 1000 gold and silver stocks existing, you’re too likely to strike out, or be ignored by Mr. Market.
Owning too many gold stocks is a common fault of those that attend gold shows, or subscribe to newsletters with several dozen stocks on their “buy” list. Investors hear or read a good story and buy. Before long they own 20, 30 or more–far too many stocks, which dooms them to simply match Indexes such as the XAU or HIU. Most gold newsletters are guilty of recommending too many stocks, as it increases their chances of a big win, so that they can boast about it. But, it does little good for anyone’s portfolio to own all their recom- mendations, which is why they don’t report total portfolio results, as do mutual funds, and the GSA program.
The beauty of “10” is two-fold:
First, the way numbers work: 10 is large enough that a disaster befalling one, even if it falls 50%, won’t cause much overall damage. On the other hand, when a Top 10 stock doubles, triples, or more, it can have a big impact on your total portfolio’s value. One never knows when Mr. Market will wake up a stock, so having 10, broadens the possibility of a big success. Second, the discipline of 10:
If you find a new stock, and want to buy, sticking to 10 forces you to re-examine the entire portfolio. You must decide if the candidate’s chances are better than the stocks already held. GSA’s track record shows “10 gold stocks” and more recently, those plus the 5 silver stocks, to be about the right number to own. And even if gold will only be a portion of your portfolio, in today’s era of $5 internet com- missions, a $50 total transaction cost, is minor “insurance” to own all of the “Top 10”.
While GSA covers over 60 miners, that doesn’t mean we like them all at the current price. But at a different price, or after an “event,” we might. Already following the stock means that we don’t have to “get up to speed” following events or price changes, and we can immedi- ately advise subscribers to act. And, covering virtually all producers, is how we compile our unique industry-wide database that lets us find the Top 10 Stocks.
2. Assuming that all ounces are equal:
An ounce is an ounce is an ounce… right? WRONG!!! Don’t be con- fused by the various “ounce” totals thrown around by the companies.
The U.S. Security and Exchange Commission (SEC) allows miners to report only one type of ounce totals: Proven and Probable Reserves. These are ounces determined by drill holes spaced close enough, as little as 15 feet apart, to have a high probability that their grade results can be projected over the untested distance between the holes. Plus, the deposit’s economics have been verified by an inde- pendent feasibility study that shows the capital required to build the mine and processing facility will have a positive return. A com- bination of these two criteria qualifies a deposit’s ounces to be “P+P Reserves”.
Other ounce designations… Mineralization, Measured, Indicated, Inferred, Resource, Global Resource, etc… have wider drill spacing so the ounces are less certain to exist and/or the deposit has not been shown to be economic. For example, sea water is known to have mil- lions of ounces of gold… but the grade is so low that it’s not economic to attempt recover
3. Buying entire position at once:
Just because you agree with GSA, that a stock has the long term potential to double, it doesn’t mean that Mr. Market will suddenly see the same upside and start buying right after you’ve bought. It takes time for value to be recognized.
NEVER buy your entire position at once, whether it’s a new stock or establishing a position in the precious metals sector. Scale in—50% of your final investment is the maximum to start. You may well get a chance to buy more, later. If you don’t get this chance, you’ll have a low-cost initial basis and there’s nothing wrong with adding to an already winning position.
The above “citing” (encompassing Chapter 4) was taken from John Doody’s web- site:http://www.goldstockanalyst.com, http://www.goldstockanalyst.com/most-com- mon-investor-mistakes.lasso. Sub Title: Common Investor Mistakes, 2018, John Doody Author.
Keeping Your Gains
In 2013, we finally made a mistake. We let 55.1% of our gains, get away from us. In late 2013, the miners were sitting on the bottom, our account, and our client’s accounts, that did so well from 2001 on wards, were devastated. We just couldn’t understand it. All, but one analyst, were predicting that 2013 was a just a normal correction, down perhaps 25%, and our accounts would spring back quickly. So, we stayed fully invested, as the GSA program recommended.
There was one analyst however, that disagreed with the consensus, and that was Larry Edelson. Back in 2012, after being a gold stock bull for almost ten years, he became a “bear”. He was right of course, but we didn’t listen to him. We experienced the severe 2013 mining stock downdraft, as did just about every other gold stock analyst. The Peter Grandish’s of the world missed it, even the grand-daddy of precious metals, Eric Sprott missed it. So we were in good company, but still 55.1% poorer, and had a bunch of unhappy clients.
In December of 2013, we advised all clients that we would be still using the GOLD STOCK ANALYST program of John Doody, but also the timing program of Larry Edelson. OK, we were now all set going forward, we had “the dream-team”, John and Larry.
Then came the January 1 to June 20, 2016, The “GSA” explosion.
During that period, Doody’s Gold Stock Analyst program, rose an astounding 72%, almost wiping out all of 2013 losses. So we were back in the saddle again, and our clients had smiles on their faces again. Never again will we doubt the wisdom of our Doody/ Edelson team.
At the end of the second quarter of 2014, Larry Edelson advised “cash” until further notice. We finished this book, the first go around, on May 20, 2015. At that time were still in cash, luckily saving the 924.9% gains that we got since 2001. It is now the end of September, 2019, and our portfolio has jumped 40% so far this year to $1,02,740. At this time, we are 75% invested, and 25% in cash awaiting recovery.
Once again, I recommend that you sign up for our free newsletter which will tell you when our new timer, Mark Leibovit, turns bullish or bearish. However, the newsletter cannot provide you with current information. And this is important, as when the miners turn, they turn fast. Missing a few weeks could cost you a gain of 50% or more. It behooves all of your listeners, and readers, to ask for the link to open up your Interactive Broker’s accounts, under ours. It takes about two weeks to get your account opened, so please plan ahead.
Therefore, to not miss out, we suggest that you open a “piggy-back” account at Interactive Brokers, fund it, and stay in cash. The “Piggy back program” will get you in the 10 GSA stocks, and the Fab 5 silver stocks, on the same day that Leibovit, our timer, gives us the “all-in” signal.
To get started in the “Piggy-back” program, just let me know that you are interested. I will then ask Interactive Brokers to send you an invitation to open an “on line” account, under my “master advisory account”. Your account will then follow the stock positions of my account (based on both the GSA gold and silver selections, and the timing calls of Mark Leibovit). When Mark changes his market opin- ion, you can be assured that the positions in your account, will change with it, that same day. Hopefully, this means no more lost gains for me, and for you.
Meet Mark Leibovit, Our Market Timer
MARK LEIBOVIT is Chief Market Strategist for VRTrader.Com. His technical expertise is in overall market timing and stock selection based upon his proprietary VOLUME REVERSAL (TM) methodology and Annual Forecast Model.
Mark’s extensive media television profile includes seven years as a consultant ‘Elf’ on “Louis Rukeyser’s Wall Street Week” television pro- gram, and over thirty years as a Market Monitor guest for PBS “The Nightly Business Report”. He also has appeared on Fox Business News, CNBC, BNN (Canada), and Bloomberg, and has been inter- viewed in Barrons, Business Week, Forbes and The Wall Street Jour- nal.
In the August 26. 2019 edition of TIMER DIGEST, Mark Leibovit was ranked the #1 U.S. Stock Market Timer and the #1 Gold Market Timer. Previously, Mark was ranked #1 Intermediate U.S. Market Timer for the ten year period December, 1997 to 2007.
He was a ‘Market Maker’ on the Chicago Board Options Exchange and the Midwest Options Exchange and then went on to serve as Director of Research at Freehling & Co. and later Director of Technical Research at Rodman and Renshaw (both in Chicago). Mr. Leibovit now publishes a series of newsletters at www.LeibovitVRNewslet- ters.com. He is a member of the Market Technicians Association.
He served as Portfolio Manager of the I2 Integrity REIT Fund 2005-2007, Scottsdale, AZ and Portfolio Manager for the Growth Index Strategy at Flexible Plan Investments Ltd., Bloomfield Hills, MI, 2002-2006.
Mr. Leibovit’s specialty is Volume Analysis and his proprietary Lei- bovit Volume Reversal Indicator is well known for forecasting accu- rate signals of trend direction and reversals in the equity, metals and futures markets. He has historical experience recognizing, bull and bear markets and signaling alerts prior to market crashes. His indica- tor is currently available on the Metastock, eSignal and TradeStation platforms.
His comprehensive study on Volume Analysis, The Trader’s Book of Volume published by McGraw-Hill is a definitive guide to volume trading. It is now also published in Chinese. Mark has appeared in speaking engagements and seminars in the U.S. and Canada and provides customized Volume Analysis for managers and institutions.
Citing in Chapter 6, (encompassing) The Leibovit VR Newsletter Website: https://lei- bovitvrnewsletters.com, http://leibovitvrnewsletters.com/about, Bio, 2017, Mark Lei- bovit, Author
Want To Join Us? Use Our “System, It Really Works!”
Monica and I relocated to Auckland, New Zealand in 2009. We did so as we wanted to write books about the world banking system, and perhaps find a better investment platform for our clients. At first it looked good, getting our client’s money out of harm’s way. What we found in New Zealand, was a beautiful country, wonderful people, but an archaic stock trading system.
We found clients all over the world, but we were disappointed in the outdated price fixed commission system. It reminded me of the days back in 1967 with Lehman, when commissions were fixed. Back then to buy 100 shares of a $20 stock was $75. Then along came Charles Schwab who brought commissions down to $35, then Inter- active Brokers as low as $1 for trade.
I tried to bring Interactive Brokers to the New Zealand brokerage community, but I was met with stiff resistance. How dare an Amer- ican try to lower commissions for his clients! I ended up staying in New Zealand, but moved all my clients back to the Hong Kong Office of Interactive Brokers. That seemed to work, as we got our cheap commissions using our John Doody GSA program, and we could make transactions fast. In New Zealand, I’d put an order in on Wednesday, and it got executed on Thursday, sometime during the day. When I told Aegis, whom I placed trades through, “I missed the market” for my client. They knew nothing about missing the market, and cared little for their client’s executions.
I found that using Interactive Broker’s Hong Kong Office to place my trades worked great. Low, almost free, commissions, fast executions, and I could trade any listed market in the world. So now my clients using the GSA gold and silver programs, can rest assured that they will have fast executions, low commissions, and will be in the largest and safest discount brokerage firm in the world. And I say world, as Interactive Brokers permits me, because I am dual licensed, to place my clients out of harm’s way, in Hong Kong. Clients actually have a choice of “IB’s” U.S. platform or Hong Kong’s. Interactive’s Hong Kong office is an excellent medium for those clients wishing International secure exposure. You don’t want to have all you money in the U.S.
You have heard in previous chapters, our performance record from 2001, thanks to the John Doody system, now, we ask you to join us, today’s date being September 30, 2019. In my opinion, this is the per- fect time to get started in the precious metal’s mining sector. We’ve had a sell off last year, and are now in the the bull phase, so time to get on-board! We expect to be off to the races again come the 4th quarter of this year. So, please join us, and tell your family and friends about John Doody’s GSA record. It’s audited, and is second to none. If you have an IRA, it’s ideal, as your gains going forward will be tax deferred, which is important with a program seeking maximum gains.
Meet John Doody
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki
JOHN C. DOODY,
Founder and Editor in ChiefJohn Doody brings a unique perspective to gold stock analysis. With a BA in Economics from Columbia, an MBA in Finance from Boston University, where he also did his PhD- Economics course work, Doody has no formal “rock” studies beyond “Introductory Geology” at Columbia, taught by the University’s School of Mines. An Economics Professor for almost two decades, Doody became interested in gold due to an innate distrust of politi- cians and concern over their habit of debasing the currency via infla- tionary economic policies. As Doody initially studied gold stocks, he had a hard time deciding which to buy. Their share prices, market capitalizations, production and reserve levels were all different, yet each made exactly the same product: Gold.
To solve the dilemma and determine which gold stocks represent the best value at a point in time, Doody popularized a metric called Mar- ket Cap per ounce; a company’s stock market capitalization (number of shares times stock price) is divided by the ounces Produced per year, or its ounces of Proven and Probable Reserves. This puts all the miners on the same basis, so when buying you know how much you are paying for each ounce of Production and each ounce of Reserves. The Market Cap/oz values are wide-ranging… sometimes justified and sometimes not. This simply means that “Mr. Market” is inefficient and does not always price a stock correctly, which creates many of the opportunities identified in the GSA newsletters.
A result of this Market Cap metric, Doody’s newsletters cover only producers or near-producers that have an independent feasibility study validating its reserves are economic to produce. Success with this method of finding undervalued gold mining stocks led Doody to leave teaching and start Gold Stock Analyst late in 1994 to make his research available to everyone. The results to date have been spec- tacular: through September 2019, the GSA Top 10 Stocks portfolio has a cumulative gain of 1,295% from 2001 to 2019, and an average annual gain of over 20.3% per year.
“Citing” in Chapter 7 (encompassing), The GSA Website: http://goldstockanalyst.com, http://www.goldstockanalyst.com/about-the-editors.lasso, John C Doody, 2018, Author: Garrett D. Goggin, Associate Editor.
Egon Von Greyerz Predicts $10,000 Gold!
EGON VON GREYERZ SAYS: “GOLD TO REACH $10,000 – PROPERTY PRICES TO COLLAPSE RELATIVE TO GOLD! THE WORLD IS RUNNING ON EMPTY.
Governments and Central Banks are panicking, having used up all their arsenal – massive money printing and hyperinflation lies ahead.
Gold at US$10,000 per ounce is just a starting point. Property values to lose 95% of their value relative to Gold. Preservation of wealth is vital, as we enter a period of extreme volatility with interest rates surging after a 5,000 year historical low.
- Gold now starting the next leg of a massive bull market.
- Gold going from west to east – West to run out of Gold.
- Australia’s property market, is massive bubble.
- Worldwide banking crisis in the making.
- People have no savings, all destroyed by governments.
- Central banks across the globe committed to money printing.
- Bond market is biggest bubble ever, will trigger the biggest collapse the world has ever seen.
- USD is the sickest of all currencies, only supported by debt and military.
- Debt needs to implode so world can grow soundly again.
- Gold severely suppressed, will explode to very high levels.
- COMEX failure, will result in a run on physical metals.
- Don’t sell any gold or silver for a very long time.Citing in Chapter 9, (encompassing) “As Good As gold”, Brian & Darryk Panes, Authors, September 20 2019.
The Best Way To Profit From The New Gold Boom
By John Doody, editor, Gold Stock Analyst
From the Egyptian pharaohs buried with gold jewelry and coins… to the world’s central banks stockpiling ingots to back their paper money… to today’s most successful hedge-fund managers, who all say they own gold… gold has been a spending, saving, and investing medium throughout time.
It’s a way of spending because it’s accepted worldwide and can be converted into local currency for purchases. And it’s used for saving and investing because it holds its purchasing power against inflation.
Many prominent investors have praised gold for these two benefits. These investors include Ray Dalio of $160 billion management firm Bridgewater Associates, who has said that the assets to own in the coming “paradigm shift … include gold.” Bond King Jeffrey Gundlach, who manages more than $130 billion, says, “I am certainly long gold.”
When you consider what happened after President Richard Nixon set gold’s price free in 1971, it’s easy to see why. At the time, one ounce of gold cost just $35. Today, almost 50 years later, the same gold ounce is worth more than $1,500.
Demand for gold is timeless, but is bullion really the best way to profit? Today, I’ll give you the simple answer…
At Gold Stock Analyst, we think the best way to profit in gold is to own gold stocks. And we have the track record to prove it.
Our independently audited 18-year track record shows a total gain of 530% in our Top 10 gold stock recommendations… triple the return of the S&P 500 Index, and double that of gold.
That’s why we love gold stocks. A selection of the best gold stocks can deliver market-beating returns over the long term… even through bull and bear markets. Take a look at our outperformance over the past 18 years and see for yourself…
Even better, when in a gold bull market like the one we’re in today, the returns can be absolutely spectacular.
During the last gold bull market – a period of a little more than two years following the crash of 2008 – the Gold Stock Analyst Top 10 was up 1,070%. That’s four times more than any other gold investment… and 22 times more than the S&P 500.
So what’s the big secret? These returns are possible because the best gold stocks have leverage to gold prices. This happens in two ways…
1. Operating leverage
Suppose a miner’s output is 100,000 gold ounces a year, and this amount costs $1,200 in labor, power, and materials to produce. If the gold price is $1,400 per ounce, the company’s operating profit is $1,400 minus $1,200 times 100,000, or $20 million.
If gold rises to $1,600, the cost to produce doesn’t change… But oper- ating profits double to $400 per ounce, or $40 million total. And if 50 million shares are outstanding, profit per share doubles, from $0.40 to $0.80. The stock price will rise to reflect this.
2. Asset leverage
Miners typically have 10 or more times their annual production in reserves. So for our example, the miner would have a minimum of 1 million ounces still in the ground.
At $1,400 per ounce, that gold has a gross value of $1.4 billion. At $1,600 per ounce, its value is $1.6 billion, an increase of $200 million. Again, if a company has 50 million shares outstanding, each would now be worth $4 more based on the value change. This, too, will show up in an increased stock price.
You can see why gold stocks are the best way to profit from gold… especially during a boom in prices. In times like today, they can absolutely soar. And that’s why you want to own the best gold stocks now.
Citing in Chapter 10, (encompassing), The Best way to profit from the new gold boom, John Doody, Gold Stock Analyst, August 25, 2019.
Conclusion and Recommendations
This book is short compared to my previous four investigative ven- tures, but it perhaps is the most important. What good is it for us to know what is about to happen, without taking advantage of it, and protecting our own investment nest eggs accordingly?
What I have done is to permit you to look over my shoulder, and view what I am doing with my finances. I have introduced to you the pro- gram that I have used, and still use, over the past 18 years (The Gold Stock Analyst, GSA 15 programs. I intend to maintain the GSA-15 as my core portfolio, along with our world-class timer, Mark Leibovit.
I introduced you to our discount firm, Interactive Brokers. It’s a finan- cially strong firm, which is important, and the commissions are per- haps the lowest in the world. This is important as when we place trades in the GSA program, we place equal dollar amounts in the ten gold, and 5 silver stock recommendations. Therefore, if you have a $15,000 starting portfolio, you would be buying slowly 15 stocks. Low commissions are thus important, as to not diminish your returns. Interactive Brokers charges about $3 a trade, extremely reasonable.
As I have said in the book, you don’t need a financial adviser or bro- ker, you can do the program yourself with a low-cost competant dis- count broker. Or, I’d be glad to send you a “piggy-back” Interactive Brokers application link, where you can “piggy back” my trades (or as close as possible).
At about $3 per trade, it makes the program quite inexpensive. As an added performance benefit, John Doody recommends an “end of the year offset”. Some shares of winners are sold, and the proceeds used to buy more shares in the program’s non-winners. This year-end off- set program, has greatly added to the program’s past performance.
For purchasing physical gold & silver coins in the U.S., I recommend my good trusted friend, Chuck Coppes. Chuck has his office in Pine top, Arizona. Visit his website at: idpconsultinggroup.com, Or, call him at: (928) 3585471.
As promised, I will answer all E-mail questions. We invite you to “piggy-back” our positions over at Interactive Brokers, using the John Doody gold and silver GSA-15 program. If you would like Interactive Brokers to E-mail you a piggy-back account application, please Email me at: firstname.lastname@example.org.
As I say in my books, the finest minds in the investment world have made our books possible. I have taken a few of the experts that I lis- ten to each day, and have presented them to you in both print and audio. When you can, bookmark our favorite sites, such as “Coast to coast am, Jay Taylor Media, or Greg Hunter’s USA Watch Dog, and try to listen to them on your computer before you go to bed, as I do. If you are like me, you’ll get the first half hour heard before dosing off, and catch the rest, the next day.
I will be promoting this book on many of the top radio talk shows, but if you have a local area talk show, and would like us to guest, please ask them to contact me. My telephone number in the U.S. is: (727) 564 9416, my website is: GoldShareInvesting.com, and my personal Email: email@example.com
Thanks for purchasing our book, and I look forward helping, you, your family members, and friends prosper during the many prosper- ous investment years that lie ahead. I will be there with you sharing in the experience.
Here’s the late Larry Edelson’s parting words of wisdom:
“No doubt about it: It’s a scary world out there. Suddenly, decades of resentment and anger are boiling over worldwide. Suddenly, national,
ethnic and revolutionary struggles have reached the boiling point.
In hot spots from China to the Ukraine and from the Middle East and Africa to South America, thousands are already losing their lives in these conflagrations.
Entire economies are being engulfed and destroyed. Investors and con- sumers world-wide are watching in horror as family fortunes and indi- viduals’ savings are wiped away; gone with the wind.
Meanwhile, as if this wholesale destruction of wealth isn’t enough, six long years of out-of-control central bank money printing has raised infla- tion fears to a fever pitch around the globe.
With food and fuel prices skyrocketing, millions of investors and everyday consumers alike are desperately searching for ways to protect their buy- ing power from their government’s economic corruption and incompe- tence.
And now, even in America, millions are beginning to fear widespread civil strife as the economy continues to slow, and as anger over NSA spying and Washington’s failure to defend the U.S. Constitution explode into the headlines.
Mark my words …This is THE PERFECT STORM for gold and silver investors —lies ahead.
Why I’m so sure that precious metals prices have almost bottomed …
Why I’m convinced that gold is now starting a rocket ride higher to over $5,000 per ounce and silver to over $125.
The best ways for you to harness the awesome power of this new bull market to multiply your money…
How to use bullion, mining shares and precious metals ETFs to protect your family and your wealth in 2015 and beyond…
This is critical:
In the last phase of this precious metals bull market, select mining stocks generated gains of up to 2,900%.
That’s enough to multiply your money nearly 30 times over … turn every $10,000 you invest into $300,000…
And every $35,000 you invest into more than $1 million…
And I firmly believe they’ll generate even GREATER profits this time around!”
Well, Larry sure makes it sound good, and his words ring true today! And, he has been spot on for the past eighteen years, while most other analysts have not. We now have Mark Leibovit, as our timer, who will carry on where Larry left off. If our readers will faithfully use the GSA-15 system, and our timer, I feel we’ll have a lot of very wealthy happy readers, in the near future.
Hopefully you will join us. We urge all readers and listeners to sign up for my free newsletter at firstname.lastname@example.org, to get some insight on what John Doody and Mark Leibovit, are saying.
Some parting advice, in our experience, it takes about a week to open, and fund, an Interactive Brokers account. A week could mean a 30% move in the mining stocks, so I recommend that you, at least, open your “IB” accounts now, and slowly enter John Doody’s 10 gold and 5 silver stocks. Or if you don’t have the time, please join my “piggy- back” program, and I will do it all foryou.
Thanks again for buying my book, and we hope the GSA -15 program will help you, as much as it has helped us!