Latest / Financial Survival Network / Gold & Silver Breakout - David Erfle #6324

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Gold & Silver Breakout - David Erfle #6324 · Financial Survival Network

0:01
Speaker 1: It's been a long, long, interesting road travel, that's for sure.
0:05
Speaker 1: But our patience is definitely paying off here now and
0:09
Speaker 1: it's it's it is a nice feeling. So now you
0:14
Speaker 1: know our concern is when do we sell and how
0:16
Speaker 1: much do we sell?
0:17
Speaker 2: You're listening to Carrie Let's's Financial Survival Network where you
0:21
Speaker 2: get valuable information you just can't find anywhere else to
0:25
Speaker 2: thrive in today's trying times. You need the Financial Survival
0:29
Speaker 2: Network now more than ever. Go to Financial Survivalnetwork dot
0:34
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0:38
Speaker 2: Network now more than ever.
0:45
Speaker 3: And welcome you are listening to and watching the Financial
0:48
Speaker 3: Survival Network. I'm your host, Terry Lets. Well, what can
0:52
Speaker 3: you say about these metal markets right now as we speak? Well,
0:58
Speaker 3: gold thirty five seven and change silver forty one thirty eight.
1:04
Speaker 3: Silver hasn't been this high? Well, gold is trading in
1:06
Speaker 3: a record, but silver has not been this high since
1:10
Speaker 3: twenty eleven. What a year that was. And with us
1:14
Speaker 3: now is David Earthly. Of course you'll find him at
1:19
Speaker 3: Junior Minor Junkie dot com. That's Junior m I N
1:23
Speaker 3: E R Junkie j U n K Y not j
1:28
Speaker 3: U n K I E. Which is something else all together, David.
1:33
Speaker 3: I mean I saw you like you were dancing on
1:36
Speaker 3: your desk when we first started talking here. What can
1:40
Speaker 3: you say about this market that hasn't already been said.
1:44
Speaker 1: Well, I stopped. I stopped dancing on desk quite quick,
1:47
Speaker 1: quite a while ago. But in my mind, I'm dancing
1:49
Speaker 1: on my desk. Yes, it's it's happy times for us
1:53
Speaker 1: here in the sector. For that, we've been waiting for
1:56
Speaker 1: these happy times for quite a while. I mean last
1:59
Speaker 1: year we had the gold price go up twenty seven percent,
2:02
Speaker 1: and then in the end the miners were only up
2:04
Speaker 1: thirteen percent, providing just a half a percent leverage. So
2:09
Speaker 1: now we've got the gold stocks catching up to the
2:13
Speaker 1: gold price. We had the gold price hit an all
2:16
Speaker 1: time high a thirty five hundred back in April, and
2:19
Speaker 1: as we speak right here, we got gold futures banging
2:22
Speaker 1: on the thirty six to fifty door here. So the
2:26
Speaker 1: gold price had gone sideways throughout the summer while the
2:29
Speaker 1: gold stocks were catching up big time. Because in that
2:31
Speaker 1: time we had the miners produce outstanding free cash flow
2:38
Speaker 1: for two consecutive quarters. When they when they announced blowout
2:43
Speaker 1: earnings and Q one and Q two that was happening
2:46
Speaker 1: while the gold price was going sideways. And also their
2:49
Speaker 1: costs have pretty much remained in place while the gold
2:52
Speaker 1: price has gone through the ceiling here, So the gold
2:56
Speaker 1: stocks are catching up to the gold price. And now
3:01
Speaker 1: the juniors. Last week, a lot of these lagging juniors
3:05
Speaker 1: are exploding out of these huge multi year bases and
3:09
Speaker 1: they're catching up with the majors. And at the same time,
3:13
Speaker 1: we had the silver price at fourteen year highs, trading
3:16
Speaker 1: over forty dollars for the first time in fourteen years.
3:21
Speaker 1: But and now the I think December December silver is
3:26
Speaker 1: over forty two dollars right now as we speak, and
3:28
Speaker 1: and the next resistance is like fifty bucks. So yeah,
3:32
Speaker 1: it's happy times here in the sector.
3:36
Speaker 3: Yeah. Well, so if you were a subscriber, did Junior
3:40
Speaker 3: mine a junkie and let's just say, you know somehow
3:46
Speaker 3: you discovered it two years ago, where would your portfolio
3:49
Speaker 3: be right now?
3:51
Speaker 1: Your portfolio would be about one hundred and thirty five
3:54
Speaker 1: percent higher, while the while the GDXJ is probably about
3:59
Speaker 1: eighty percent at higher. So, because what happens when these
4:03
Speaker 1: bull markets get going in the sector is the juniors
4:08
Speaker 1: begin to outperform the miners in a big way because
4:13
Speaker 1: and before then we had the juniors underperforming the miners
4:17
Speaker 1: while the miners were underperforming goals. So the past few
4:20
Speaker 1: years have been kind of sparse as far as profits
4:24
Speaker 1: were concerned, but they were a great time to accumulate
4:28
Speaker 1: positions in these companies with huge upside potential once the
4:34
Speaker 1: conditions are in place like right now for them to
4:36
Speaker 1: go higher. So a lot of patiences is required while
4:40
Speaker 1: you have all this time to accumulate these companies. And
4:44
Speaker 1: that's what my subscribers and I have been doing over
4:47
Speaker 1: the past couple of years. And this year that patience
4:51
Speaker 1: and that due diligence is paying off in spades.
4:55
Speaker 3: So is it too late? Have you missed the party?
5:00
Speaker 3: Didn't He didn't?
5:01
Speaker 1: Well, I mean as far as as far as getting
5:04
Speaker 1: into the sector at lower risk prices, it's it's later
5:10
Speaker 1: than it was before. Absolutely, But this this up leg
5:15
Speaker 1: is getting stretched and we're due for an interim peak.
5:18
Speaker 1: We might even hit it, might have even hit it
5:20
Speaker 1: today as far as the GDX and GDXJ is concerned.
5:25
Speaker 1: The GDX touched got close to its all time high
5:29
Speaker 1: this morning at sixty six, that's not adjusted for not
5:35
Speaker 1: adjusted for dividends. But the last time but when it
5:40
Speaker 1: did hit that sixty six was back in twenty eleven
5:43
Speaker 1: when the gold price was attempting to run to two
5:46
Speaker 1: thousand dollars announce I remember. Yeah, So as far as
5:52
Speaker 1: an interim peak is concerned, we're either added interim peak
5:55
Speaker 1: or close. So there is some consolidation up ahead, but
5:59
Speaker 1: as far as the big picture is concerned, we still
6:02
Speaker 1: have a long way to go, I believe. And also
6:06
Speaker 1: if you take a look at the gold price that's
6:07
Speaker 1: getting stretched also, but the golds dice, you're rarely disabled
6:11
Speaker 1: your internet connection in computer for suspicious activity for I.
6:15
Speaker 3: Don't know what the hell that was. Sorry about that,
6:18
Speaker 3: I'm just making it's okay, Yeah.
6:19
Speaker 1: That's okay. So the gold price is breaking out of
6:23
Speaker 1: this five month symmetrical triangle now and it's target the
6:27
Speaker 1: symmetrical triangle breakout is like thirty eight fifty to four thousand,
6:31
Speaker 1: so and I wouldn't be surprised if that's hit pretty
6:34
Speaker 1: quickly because momentum based traders have come into this market
6:37
Speaker 1: at the beginning of September year while the stock market
6:40
Speaker 1: is rolling over, they take a look at the S
6:42
Speaker 1: and P five hundred rolling over, and if you look
6:45
Speaker 1: deep into the s and P five hundred, what's the
6:47
Speaker 1: what's the number one gainer in the s and P.
6:49
Speaker 1: It's Newmont, It's mol right, and it's the only gold
6:53
Speaker 1: stock in the S and P five hundred, and it's
6:55
Speaker 1: doubled its price stock price is doubled. So you're so
6:58
Speaker 1: you know, imagine you're you're a fund manager, you're coming
7:00
Speaker 1: back from vacation and you see this and if you
7:04
Speaker 1: if you you don't have as much gold exposure as
7:07
Speaker 1: you like, as you'd like, then you're buying Newmont and
7:11
Speaker 1: you're buying and you're buying some majors. Even though the
7:14
Speaker 1: price is a bit stretched. It's the gold stocks are
7:18
Speaker 1: still under value bases the gold price because the stock
7:22
Speaker 1: market is just now beginning, I believe, is the market
7:26
Speaker 1: is just now beginning to price in a solid floor
7:29
Speaker 1: three thousand dollars gold. And these companies are producing gold.
7:33
Speaker 1: The average all in sustaining cost of producing and now
7:36
Speaker 1: it's of gold now is between sixteen hundred and sixteen
7:38
Speaker 1: hundred and fifty dollars. That's huge margins. And yeah, and
7:43
Speaker 1: Numont just free cash flow alone. In Q one, Neumont
7:47
Speaker 1: produced a one point five billion in free cash flow,
7:50
Speaker 1: and then Q two one point seven billion. I mean
7:53
Speaker 1: that's a run rate, a full year run rate of
7:55
Speaker 1: over six you know, six and a half billion dollars
7:58
Speaker 1: of free cash flow. So you take a look at that,
8:01
Speaker 1: and you take a look at at at the other
8:03
Speaker 1: sectors in the S and P five hundred, you know
8:06
Speaker 1: their price to perfection, and they've already gone on these
8:09
Speaker 1: huge runs sold. The gold stocks still have some catching
8:12
Speaker 1: up to do, even though we're due for for some
8:16
Speaker 1: some healthy profit taking here.
8:19
Speaker 3: So m and a activity because while it's all Rosie
8:23
Speaker 3: for the for the new months and the barracks and
8:27
Speaker 3: the agniko the Agnikos of the world, but they're running
8:32
Speaker 3: out of gold here, they're producing it way faster than
8:35
Speaker 3: they could replace it. When does the scramble happen? And
8:39
Speaker 3: will they avoid the mistakes in the.
8:42
Speaker 1: Past or yeah? Absolutely, I mean that's that's what's on
8:45
Speaker 1: on investors' minds now right. I Mean they're saying, Okay,
8:49
Speaker 1: you've done a great job showing up your balance sheet.
8:52
Speaker 1: You've got fantastic balance sheets. Now you're buying back shares,
8:56
Speaker 1: you know you're paying, you're paying healthy dividends. I mean
8:58
Speaker 1: when I got into this sector, you know, over twenty
9:01
Speaker 1: years ago, it was unheard of for a mining stock
9:03
Speaker 1: to may a dividend. And now they're paying healthy dividends.
9:07
Speaker 1: They've they've got strong balance sheets, unlike what they had
9:10
Speaker 1: at the top of the last ball market in twenty eleven.
9:13
Speaker 1: You know, they didn't really have you know, healthy balance sheets,
9:16
Speaker 1: and they ended up going out and buying buying low
9:21
Speaker 1: grade bulk ton ofjounces at top prices, thinking the gold
9:25
Speaker 1: price was going to continue to move higher forever. And
9:29
Speaker 1: I think they've they've learned from those mistakes and they
9:32
Speaker 1: are a lot more cautious and they've been proven to
9:35
Speaker 1: be so. But if you take a look at what
9:37
Speaker 1: the juniors are doing now, you know, we're coming up
9:40
Speaker 1: at these conferences here at Beaver Creek and then followed
9:44
Speaker 1: by the Denver Gold Forum here next week, and this
9:48
Speaker 1: is where this is where these guys get together and
9:51
Speaker 1: they talk about M and A and they need to
9:54
Speaker 1: replace these ounces now. So I wouldn't be surprised to
9:57
Speaker 1: see some high profile M and A announcements come out
10:01
Speaker 1: of these conferences. And you know, once it starts to happen,
10:05
Speaker 1: it's snowballs, and then I also would be surprised that
10:09
Speaker 1: you know that we we see an announcement of of
10:12
Speaker 1: of a junior being taken over by a major and
10:15
Speaker 1: then we get into a bidding more. That's what we
10:17
Speaker 1: really want to see. That'll really get the M and
10:19
Speaker 1: A juices flowing and it will get sector investors even
10:23
Speaker 1: more excited.
10:23
Speaker 3: And there's so few high quality juniors out there that
10:27
Speaker 3: the silver, especially silver, you know, yeah, totally so, so
10:32
Speaker 3: when it does hit, it's going to hit big, and
10:36
Speaker 3: it's going to hit hard. Where do you want to
10:37
Speaker 3: be when this happens.
10:39
Speaker 1: He's come off the board. You know, we we saw Gattos,
10:42
Speaker 1: We saw Silvercrest taken over by Cordeline, So you know,
10:47
Speaker 1: they understand that that that that primary silver projects, especially
10:53
Speaker 1: high grade primary silver projects are rare. So I think
10:56
Speaker 1: they're gonna they're gonna be going down the food chain
10:59
Speaker 1: and be taken over some of these some of these
11:02
Speaker 1: juniors that are de risking, these these projects that are
11:05
Speaker 1: yet to be in the finance stage. So I think
11:09
Speaker 1: that's that's in our future where where these majors start
11:12
Speaker 1: to go down the food chain, and they're going to
11:14
Speaker 1: take a chance and go in and buy them out a little, right,
11:17
Speaker 1: they're getting a lot higher.
11:19
Speaker 3: So, uh, what about the fact that the US government
11:22
Speaker 3: is poised supposedly to put silver and copper and potash
11:28
Speaker 3: on the critical Minerals list. That seems to have been
11:32
Speaker 3: the spark, the catalyst that set off silver at this
11:36
Speaker 3: point further.
11:38
Speaker 1: Right, and Saudi Arabia getting into silver as well. I mean,
11:41
Speaker 1: that's that was that was huge news.
11:43
Speaker 3: Yeah, so we were ahead of them all, you and
11:45
Speaker 3: I David Right.
11:48
Speaker 1: It's been a long, long, interesting road travel, that's for sure.
11:53
Speaker 1: But our patients is definitely paying off here now. And
11:57
Speaker 1: it's it's it's it is a nice feeling. So so
12:00
Speaker 1: now you know, our concern is when do we sell
12:03
Speaker 1: and how much do we sell? Right? So, I mean
12:06
Speaker 1: you have to have before you buy anything, you have
12:09
Speaker 1: to have a sell strategy. So and that's especially the
12:12
Speaker 1: case in these junior stocks because they're you know, they're
12:15
Speaker 1: like lit matches. They don't they they have these huge,
12:18
Speaker 1: huge runs, and it's always best to say take a
12:23
Speaker 1: little take a little money, take a little profit off
12:25
Speaker 1: the table, and you know, get your original investment out
12:27
Speaker 1: of it at some point it's it's easier to hold
12:31
Speaker 1: it for the long haul. So you know, depending on
12:34
Speaker 1: you know, depending on what your financial situation is, depending
12:37
Speaker 1: on the size of your portfolio. Everyone's got their own
12:40
Speaker 1: sell strategies, but you have to have a cell strategy
12:44
Speaker 1: in place because you don't want to you know, you
12:47
Speaker 1: don't want to end up having emotions, you know, run
12:50
Speaker 1: your you're buying or you're selling. You wanted to make
12:54
Speaker 1: informed decisions on buying and especially selling. You know, you
12:58
Speaker 1: have a target when am I going to take some profits?
13:01
Speaker 1: Because the ultimate goal when you get into a junior
13:03
Speaker 1: is for a takeover, right, I mean, that's the great
13:05
Speaker 1: thing about these things is you get into something you
13:08
Speaker 1: know it looks as you're holding it. The company's doing
13:12
Speaker 1: all the right things, raising money at the right time,
13:14
Speaker 1: keeping the share, keeping the shareccount low, putting out you know,
13:19
Speaker 1: positive economic studies, and it looks like the company, Wow,
13:22
Speaker 1: this is I've got a good one year. It looks
13:24
Speaker 1: like it's going to get taken out. Okay, at what
13:26
Speaker 1: point am I going to take out my original investment
13:28
Speaker 1: and hold the rest for a buyout? And then hopefully
13:32
Speaker 1: that buyout comes a lot farther down the road while
13:35
Speaker 1: the stock goes up on its own before it gets
13:37
Speaker 1: taken out of a higher premium.
13:39
Speaker 3: Yeah. Yeah, so the old saying you never go broke
13:43
Speaker 3: on Wall Street taking a profit, right.
13:45
Speaker 1: Right, that's right. You know, bulls make bulls make money,
13:48
Speaker 1: Bears make money, but biggs get slaughtered, especially in this sector.
13:51
Speaker 1: If you if you're you know, I've learned, you know
13:54
Speaker 1: I've I've had so many profits that I that I
13:58
Speaker 1: that I've left on the table, but they were all
14:00
Speaker 1: they were all good learning experiences, right, I mean, what
14:03
Speaker 1: happened here? Why did I Why did I end up
14:06
Speaker 1: not taking more profit in this stock? This is why
14:09
Speaker 1: I'll make sure it doesn't happen again. You take all
14:11
Speaker 1: these life lessons in this second, you apply them to
14:15
Speaker 1: your cell strategy. It's because it's a it's a it's
14:17
Speaker 1: a it's an ongoing it's an ongoing lesson. You know,
14:21
Speaker 1: there's so many lessons that you learn in these You
14:23
Speaker 1: never know anything. Something always comes up to where wow,
14:26
Speaker 1: I didn't even think of that as far as a
14:28
Speaker 1: reason for a stock selling off or whatever. So you know,
14:32
Speaker 1: no matter how fantastic a project looks, anything could happen.
14:36
Speaker 1: So you want to have you want to have some
14:38
Speaker 1: you want to take a little bit of profit on
14:40
Speaker 1: the way, for sure.
14:41
Speaker 3: How many times in your career here was a later
14:46
Speaker 3: career in your life, have you seen a stock that
14:48
Speaker 3: you thought was absolutely amazing, that it was, you were
14:52
Speaker 3: going to retire on it, and some reason unbeknownst to
14:56
Speaker 3: you but well known to the insiders, it blows up.
15:01
Speaker 1: Yeah, I mean, I don't have enough fingers. I don't
15:03
Speaker 1: have enough fingers to count how many times that's happened,
15:07
Speaker 1: you know. So, and that's what draws us to this sector,
15:10
Speaker 1: right It's it's literally like the wild wild West, you know.
15:14
Speaker 1: You could you could pick a stock that you say
15:16
Speaker 1: to yourself, my god, this is the one, this is
15:18
Speaker 1: the one I should really load up on. And I
15:20
Speaker 1: learned a long time ago never put any more than
15:22
Speaker 1: five percent of your investment capital into one stock. Is
15:25
Speaker 1: Anything could happen. Anything could happen at any time, and
15:30
Speaker 1: it might not. It's usually not the fault of the
15:34
Speaker 1: management of the company. It could be the jurisdiction therein.
15:37
Speaker 1: You know, something happens with the government and they decide
15:40
Speaker 1: to do something in the mining sector that just takes
15:44
Speaker 1: you by surprise, and no matter how fantastic your project is,
15:48
Speaker 1: it's screwed because they change the law. So anything metal urgies,
15:53
Speaker 1: you know, some metal urgy out of the blue, could happen,
15:55
Speaker 1: you know anything, And I'm not a geologist, so it's
16:00
Speaker 1: it's it's behooved me to to find out, you know,
16:04
Speaker 1: to basically hone your cell strategy to where you're in
16:08
Speaker 1: a you're in a good place when we're when we're
16:11
Speaker 1: in a place right where in a place like we're
16:13
Speaker 1: at like right now, where we're seeing we're seeing all
16:17
Speaker 1: these profits coming into our portfolio rapidly. So you got
16:22
Speaker 1: to have that planted place because you don't, like I said,
16:24
Speaker 1: you don't want to have emotions make the decision for you.
16:29
Speaker 3: Okay, so is it a good idea to sell half
16:32
Speaker 3: when you got one hundred percent run?
16:35
Speaker 1: My strategy is, well, first of all, I don't get
16:38
Speaker 1: into any junior unless I see at least three times
16:41
Speaker 1: upside potential. So based on that, when a stock triples,
16:46
Speaker 1: that's when I take my original investment off the table,
16:50
Speaker 1: and I've got twenty positions in my junior minor junkie
16:54
Speaker 1: real money portfolio right now. That that my subscribers all
16:57
Speaker 1: also follow Four of them now have tripled, and we've
17:01
Speaker 1: taken our original investment. Out of four of them, there's
17:03
Speaker 1: two others that are close to doing the same and
17:05
Speaker 1: several others that are not far away. So once that happens,
17:10
Speaker 1: you know. And I also learned that I always take
17:13
Speaker 1: my profit completely out of the portfolio, right, I mean,
17:17
Speaker 1: I've got so much money invested in these things that
17:19
Speaker 1: I don't want to reinvest profit, so I take the
17:23
Speaker 1: profit out at the end of each year.
17:26
Speaker 3: Okay, Well, that is some sage advice for those of
17:31
Speaker 3: you out there who haven't really experienced as many cycles
17:35
Speaker 3: as David and I have, and who think there's this
17:39
Speaker 3: sure thing, this miner that they're doing a deep sea
17:44
Speaker 3: mining in the Pacific and hoping to find Limuria, the
17:50
Speaker 3: continent of Limuria while they're at it, and nothing can
17:53
Speaker 3: possibly go wrong. But this is the riskiest business in
17:57
Speaker 3: the world, and like you said, perfectly honest management, it's
18:01
Speaker 3: not a lifestyle company, which you should always avoid. And
18:06
Speaker 3: all of a sudden and that's why diversify. Don't put
18:10
Speaker 3: it all there, David, how do we get your.
18:12
Speaker 1: Publication, juniorminor Junkie dot com with a Y j U
18:17
Speaker 1: n k Y. That's my website, and I also write
18:22
Speaker 1: a column on Kitko. Comes out on Fridays every usually
18:27
Speaker 1: every usually every Friday, but in the summer I've been
18:30
Speaker 1: taking a lot of Fridays off. But you can find
18:34
Speaker 1: me at Kitko and you can find me on my
18:36
Speaker 1: website at Junior Minor Junkie dot com.
18:37
Speaker 3: All right, great the links in the show notes of
18:39
Speaker 3: this interview on Financial Survival Network dot com. But I
18:43
Speaker 3: really moved that over to substack. Got tired of the
18:46
Speaker 3: website grind. Substack does all that stuff for me. You
18:51
Speaker 3: can get virtually everything for free. If you want to
18:54
Speaker 3: give me money, I'll take it, but you don't have to.
18:57
Speaker 3: But there's some specials that you want to subscribe for
19:02
Speaker 3: and questions comments kl at Carrie lets dot com. David,
19:07
Speaker 3: we'll talk to you again, hopefully in a month and
19:09
Speaker 3: more good news.
19:10
Speaker 1: Thanks again for having me on carry look forward to
19:12
Speaker 1: speaking to you again.
19:13
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your
19:17
Speaker 2: solution to today's trying times. For the latest, go to
19:21
Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network
19:26
Speaker 1: Now more than ever