2019年10月30日星期三

Make 102% Average Profits When You Buy in This Sweet Spot

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CASEY DAILY DISPATCH - Casey Research

Make 102% Average Profits When You Buy in This Sweet Spot

By David Forest, editor, International Speculator

David Forest

Today, I’ll show you the best and most reliable method to invest in a certain type of stock…

It’s a method that will help you achieve consistent, 102% average gains – in about 18 months.

It’s a hugely profitable phenomenon my team and I discovered after digging through 50 years of data. We found a way to pinpoint stocks which, during bull markets, produced average gains of 136%.

And even during the worst times for this particular type of stock… it achieved gains, on average, of 24%.

But to capture these gains, you’ve got to make sure you invest at the right time.

That may sound obvious.

But so many investors get this part of investing wrong. Many investors buy into these stocks at precisely the wrong time.

They buy when there is the most risk, and when the chance of making a winning bet is least likely to happen.

That’s where the chart below comes into play. It holds the key to making reliable, extremely profitable, and predictable trades that can help you book 102% average gains… with an incredible 80% success rate…

Take a look at the chart below.

It shows the life cycle of a mining company:

Chart

This is one of the most important charts you’ll ever see.

By understanding the life cycle of a stock – in this case, a mining stock – we can achieve repeatable investment returns on some of the market’s most explosive stocks.

You see, what most investors don’t realize is that there are three phases in an average mining stock’s life.

But only one is the sweet spot for profits.

All too often, most investors invest during the “wrong” phase.

I’ll explain the “right” phase in a moment – and it may not be the phase you think it is. In many ways, it’s counterintuitive. But I’ll get to that shortly.

To break down the phases, they are…

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The Discovery Phase

This is where­ a company finds a new mineral deposit. This is the explosive and exciting phase that in some cases can see stocks rocket 1,000% or more when they drill into a new deposit of gold, copper, or nickel.

However… investing in a company at this stage is extremely risky. For every one or two stocks that rocket higher by that much, another 10 or 20 don’t.

Unless you really know what you’re doing, you shouldn’t invest here. Even if you know what you’re doing, it can be super risky. You can lose a lot of money… so don’t do it unless you’re okay with gambling.

The Boring Engineering Phase

Here, a company has already found a new mineral deposit. Its stock price has exploded higher. However, the company is no longer pumping out exciting drill results.

Instead, management is testing groundwater, measuring rock quality, and building mine models.

All necessary things… but far from gripping for investors.

This is where short-term investors get tired and sell the stock in favor of more exciting plays.

That selling causes the share price to dip (see the middle of the chart above).

And if timed right, that’s when my research shows it’s the perfect time to buy.

Get in too soon, and you’re buying as the selling pushes the price lower. But get in at the right time, and you’ve set yourself up for the next and most lucrative phase of the life cycle…

The Golden Runway Phase

You see, every “boring” step the company completes brings it closer to actually mining. And when there’s a prospect of cash flows, a whole new group of big investors becomes interested: pension funds, private equity, even major mining companies.

This leads to the share price rise you see at the right side of my chart.

Buying ahead of this “ramp up” phase can yield significant profits. That’s why it’s the sweet spot.

This might sound like common sense, but so many investors get it wrong. They buy the wrong stocks at the wrong time. Or even the right stocks at the wrong time.

But by investing in the right stocks at the right time, my team and I have found this method works time and time again – yielding double-, even triple-digit gains in relatively short time periods.

That’s easy to do in theory. But how do we know when to buy? When’s the best time to position for a coming surge upward? And how reliable are the profits?

That’s where my research and knowledge come in…

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Reliable Profits in the Sweet Spot

My team and I gathered data and looked at every example we could find. This covered public mining companies going back to 1986.

We looked at one key factor: mining companies that had reached a “construction decision.”

This is when management decides the project looks good… that it’s likely to make money, and so they should build it.

We looked at how reliable the profits are if we buy mining stocks just announcing construction decisions. The result was extraordinary…

In total, we found 111 companies that reached a construction decision.

Then, we looked at the share price performance of these stocks between construction decision (when you should buy) and first production.

Here’s the breakdown of the 111 stocks:

  • Out of 111 stocks, 102 succeeded in building their mines. That’s a 92% success rate.

  • Four of the 111 companies were taken over before they finished construction (which yields good profits for shareholders).

  • Five stocks failed to finish the construction phase due to technical problems or running out of money.

  • Out of the 102 companies that built mines, 82 showed an average 102% gain in share price between construction decision and production.

  • And 17 of those 82 companies gained over 175% between construction and production.

Bottom line: 80% of companies yielded an average 102% profit for shareholders.

Here’s another surprising thing our research turned up: It didn’t take long to make these reliable profits.

The average time for peak gains was just 18 months.

Posting 102% average gains with an 80% success rate in 18 months is rare anywhere in investing.

This research also showed that these stocks perform well even in gold bear markets. During times of falling gold prices, our picks still averaged 24% gains.

That’s well above the average for the wider mining sector during these down periods.

Taking Advantage During a Gold Bull Market

But we’re not in a gold bear market… We’re in a gold bull market.

And naturally, that’s where historically this strategy has seen the best results. Companies that have built mines during times of rising gold prices enjoyed 136% average gains.

Of course, like all mining investments, it’s best to own a basket of gold stocks. There will be a few that blow up before first production – and some that don’t make money even if they get there. (Even with an 80% win rate, you get a handful of losers.)

But the profits from the winners will far outweigh the downside from the losers.

The best way to make the biggest gains from gold stocks is to buy individual companies. But, if you want an easy, one-click way to get exposure to some of these companies, you could always check out the VanEck Vectors Junior Gold Miners ETF (GDXJ). It’s a basket of junior gold miners… and several holdings are in that sweet spot.

Keep walking the path,

[signature]

David Forest
Editor, International Speculator

P.S. As you can see, I do a lot of research to bring my readers the best money-making trends. Whether it’s boots-on-the-ground research in Fiji, Uzbekistan, or Mongolia… or poring over hundreds of pages of drill results… I always go the full mile for my research.

And that’s why I recently destroyed a brand-new, $1,400 5G smartphone. I wanted to blow the lid off the untold story behind the 5G boom… and show you how it could lead to 60x gains.

Get the $2.7 trillion 5G secret here.


Reader Mailbag

How are you playing the gold bull market? Do you think it’s a good time to speculate on mining companies? Send us your thoughts at feedback@caseyresearch.com.


In Case You Missed It…

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Here's how he used it to find the perfect 58¢ gold stock for right now…

Click here for all the details.

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