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Dudley Baker

Dudley Baker

Dudley Pierce Baker is the founder and editor of Common Stock Warrants and its predecessor, Precious Metals Warrants and a 1967 graduate of St. Mary’s…

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Canadian Juniors on Sale

Investors of precious metals companies continue to suffer along with virtually all investors in the world as this financial meltdown continues.

All of our reasons for buying gold and the junior mining shares are as valid today as ever. Each day as the governments of the world rescue banks and big failing companies, they are using the printing presses. Gold will one day be everyone's safe haven, even the gang on CNBC.

I believe we are in a transition phase and after the financial meltdown is complete, those still standing will see that gold is the shining star and the only place to invest, including the junior mining shares. At that point, those investors will understand what our readers have been focused on for quite some time. Yes, the last two years have been rather challenging for us in the precious metals sector, but, I believe the major portion of the storm is over for us and we would anticipate substantially higher prices in the coming months and years ahead.

Do you remember only a few years ago when gold was selling at $500 an oz? There were many projections of $2,000, $3,000, $5,000 or more for gold. Did investors really think gold would increase to $5,000 without some major news and events taking place in the world? Well, now we have the terrible news and financial and banking meltdown. The events of the day should support the arguments for substantial higher gold prices in the coming months and years.

Within this bloodbath in the junior mining sector there are many great opportunities and yes, they could be an even better opportunity in the coming days and weeks. However, we suggest that savvy investors should be doing their homework and making some purchases at these ridiculously low prices.

Investors should focus on those companies with great management, great properties and some cash in the bank, in order to weather this financial storm. There are even some companies which are trading for less than their cash in the bank. I am thinking of one company with a market capitalization less than their $240 million cash in the bank.

As you can tell, I am wildly bullish on the junior's. Perhaps I am a little early, but when this market turns, it will probably turn very quickly, leaving many investors in the dust, saying, I wish I had..., I wish I had..., damn, I wish I had bought sooner.

For U.S. investors, the Canadian junior's are an even better bargain. The Canadian dollar has been hit hard in the last few weeks and now is now at .865 to the U.S. dollar. What this means is a Canadian junior's shares (or their warrants) selling at $1.00 will only cost the U.S. investor $.865. A stock selling at $0.50, will only cost the U.S. investor, $0.4325. What a deal. This is like a discount on an already discounted investment sector.

As my subscribers know, I have been selectively buying over the last couple of weeks and am comfortable with my purchases of shares and long-term warrants. I am building my inventory of shares and warrants to be sold at substantial higher prices in the coming months and years. Patience and good judgment will greatly reward investors.

To summarize, the only place to be in our opinion is in gold and silver (bullion, if you can find some), mining shares (yes, they will come back) and long term warrants on selected mining shares.

For subscribers, we also provide a database for all companies with call options and leaps trading on the natural resource shares in addition to the warrants. A valuable tool for all investors.

For those readers interested in warrants and why Warren Buffett is receiving warrants in his recent transactions, visit our website and learning center for more information.

 

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