First Mining stock purchases

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#1 Sat, May 16, 2020 - 3:11pm
JH95
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First Mining stock purchases

Hello,

Any and all advice appreciated. I currently have a position in physical metal that I am comfortable with. I am bullish on both gold and silver.

I would like to potentially speculate on mining stocks. Currently, I do not have the knowledge to pick individual stocks. I am considering buying an equal amount of senior/junior gold and silver mining index funds. Is there any major flaw in this idea? Thanks

Mon, May 18, 2020 - 12:35pm
lawyer35
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Consider Denver Dave

You might want to consider a subscription to Denver Dave's Mining Stock Journal. He is great an evaluating individual companies.

Wright

Tue, May 19, 2020 - 2:01am
JH95
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Thanks I'll check it out.

Thanks I'll check it out.

Tue, May 19, 2020 - 11:52am
SilverSpec
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Check out the Thread I got started last year

Silver Mining Forum General, or something along those lines.

If you want to go down the rabbit hole, The Silver Manifesto and Second Chance by David Morgan and a co-author are available on Kindle for something like 10 USD. These are useful to figure out NAV values based on life-of-mine, resources/reserves production schedules, and 43-101 tech reports.

You are right to start with physical. You should have enough stacked gold, silver, and lead for a mad max scenario. After you have that position carved out, you can start thinking about equities and why you want to play in this space.

Having a good position in indexes (GDJ, GDJX, HUI, etc.) is usually a good start. This captures a lot of exposure without the risks associated with individual stocks. Sprott also has a miner and junior miner index which you make consider looking at.

When you are talking about individual stocks in a bull rally, we're talking about the difference in returns between 200-1,000%. Frankly, it's a high-quality problem of good versus better. The question is whether you want to do the leg work and risk analysis. The guiding principle is that junior miners are more highly levered to the price of the underlying asset. MAG, for example, is more speculative, but would offer a far higher return at $50 USD silver than, say, Pan-Am or First Maj.

Anyways, in short, have your physical position carved out. Then buy your core index positions. Familiarize yourself with the constituent companies in the indexes. Depending on your risk tolerance, this might be 25-75% of your paper metal portfolio. After that, read a couple books (i.e. the David Morgan books), subscribe to a newsletter (Dave Kranzler, David Morgan, I think Jim Willie?), start listening to weekly wrap up, subscribe to Mining Stock Education, Crux, and Palisade on youtube. Figure out what percent of your portfolio you want in majors and juniors, respectively. Figure out how much geopolitical risk you are comfortable with (Anglo-sphere most secure, but check out Marin Katusa and the Dollar Milkshake theory). And then after at least 80 hours research buy portions in maybe your top 10-15 gold/silver mining companies.

Don't even think of leveraged ETFs or options strategies until you have a comfortable foundation in the mining shares. This is like 4-5 years experience in the mining space and you have a good sense of contango and bullion bank shenanigans. You are likely not going to be ready for these in time for the next bull. This is gambling money for the unsophisticated investor and you should mentally prepared to part with it like you are entering a casino for a bachelor party.

Tue, May 19, 2020 - 11:54am SilverSpec
SilverSpec
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*GDX, GDJX

.

Tue, May 19, 2020 - 12:05pm SilverSpec
SilverSpec
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Sample Portfolio

50% bullion

6.25% GDX

6.25% HUI

6.25% SGDM

6.25% GDXJ (has a lot of silver exposure)

3% SGDJ

3% Your favourite royalty/streaming company

2% Your second favourite royalty/streaming company

5% (1.7/1.7/1.7) your 3 favourite gold majors

5% (1.7/1.7/1.7) your 3 favourite silver majors

5% (.8/.8/.8/.8/.8/.8) your 3 favourite gold/silver juniors

2% gambling money - leveraged ETFs, exploration companies

Wed, May 20, 2020 - 12:17am
bdcortright
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Another guide

there's a guy on seekingalpha called SomaBull. He provides great research and keeps a portfolio of 20 of his top mining names. He also shares with subscribers his personal portfolio which includes more names.

I have personally subscribed to his service for 3 years and generated a 90% return last year based off his miner picks.

Wed, Jun 24, 2020 - 9:56pm
JoeSix-Pack
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Best companies imo are AG,

Best companies imo are AG, FSM, AGI, BTG, PAAS, SSRM, SVM, AND FOR LEVERAGE, JNUG AND NUGT.

randomness