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Historic Reports
Larry Myles Reports
Grumblers may blame Western
civilization for its materialism and
may assert that it gratified nobody
but a small class of rugged
exploiters. But their lament cannot
wipe out the facts. Millions of
mothers have been made happier by
the drop in infant mortality.
Famines have disappeared and
epidemics have been curbed.
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August 4th,
2011
This is
Not
About
Gold
Cresting
at $2,000
…
Individual
Prosperity remains the focus
The Bad News: There
Is
No
Place
to
Hide!
Over the last three years has anyone noticed
the less than subtle shift in the timbre and
tone of the national narrative? During 2009,
the entire western world had to suffer
through a brash and overconfident Washington
regime blathering on about how government
would lead the way and return America to a
time of financial recovery.
There were also moments of pure comic relief
– evidenced by Ben Bernanke resurrecting the
term ‘green shoots’. I would imagine he did
not research previous financial geniuses
who stumbled after using that hackneyed
term. In 2010, many of us were acutely
embarrassed by the much ballyhooed and
incredibly short-lived “Summer of Recovery”
road show. If I remember Washington’s
confident pitch, their two-pronged attack
consisted of almost limitless government
money and millions of new green jobs
(?) spearheading the drive, and America
would find itself magically on the road to
financial recovery.
Here we are three years later…the
false bravado and whim-based confidence has
been replaced with sneer and pout. The
“Big Government Experiment”
has delivered (only) fizzle and failure!
Additionally, the shift in the national
dialogue has now turned downright mean;
including words straight out of the looter’s
vocabulary in Atlas Shrugged: shared
sacrifice, protecting the American people,
class warfare, greedy and evil rich, working
together for the common good, etc.
‘Recovery’ the elusive goal of all
under-achievers has completely disappeared
from the national narrative.
Three years later,
and the
price of gold has doubled!
Three years later, and many of us have used
the hard lessons learned in 2008 to
reacquaint ourselves with common sense and
reality. Benefitting from the purchase of
physical gold at under $800 an ounce and
maximizing our gains in the junior gold
markets, many of us are now realizing the
rewards of turning to gold are not scant and
incidental; they are the precursor to
enjoying honest
prosperity.
Equally important, many of my readers
around the world have reported they have
come to understand that
American Exceptionalism
has evolved into an inclusive concept,
global in nature.
Three years later and the Big Sloppy
Collectivist Government has no place to
hide. Washington’s naïve policies and their
1970’s style, theoretical ivy-league
socialism has failed, utterly.
The Good News: There
Is
No
Place to
Hide!
Most of you know how I feel about Europe,
and how that tangled and shapeless
experiment will either completely dissolve,
or morph into a rump socio-economic bloc of
ever-diminishing global importance. Every
time I hear one of the European power
brokers even mention the word contagion
my jaw clenches. Contagion; somehow implying
the problems in Europe are akin to a
disease. A disease or a condition
that must be first contained and then
eradicated! In their zeal to continue to
administer their Keynesian based serum grown
out of a culture of twisted and perverted
debt, the bumbling Euro-quacks have been
remiss in noticing a very important change –
namely that their patient has died! What the
Keynesian bumblers are calling contagion
is in reality, nothing other than cadaver
mould.
Very soon the unwholesome and vile stench of
failure will follow the Keynesians wherever
they go, and hiding will be impossible.
Watch and see; as the tottering EU continues
to wind down, ridiculous financial edicts,
onerous laws and outlandish taxes and fees
are sure to increase. Where is the good news
in all of this? The wily and observant folks
in Europe can congratulate themselves on
believing in the
business of gold,
because their orderly accumulation of
physical gold and silver will minimize
exposure to the spectre of another ‘Weimar
Moment’.
Moving over to the bustle and earned
confidence of India and China, the first
thing I noticed is the refreshing lack of
Keynesian nonsense and drivel. Thanks to
enjoying Internet super-connectivity via
Boxee-Box, I was able to bear witness to
long lines of people waiting outside various
bullion outlets. Even without sub-titles it
was crystal clear to anyone watching the
stacks of paper money being swapped out for
physical gold and silver taking place!
The Really Good News: We (continue) to
Offer a
Hardball
Plan!
With barely a dash of my usual purple prose,
allow me to get right down to the
undisputable evidence found within the
folds of the soiled sheet; gold has found a
confident comfort level after cresting at
$1700 an ounce. I am not worried about a
steep
(and
temporary) price correction. In fact, I am
rooting for one, as our strategy should be
all about accumulation…but especially buying
gold on the dips! We have already passed
the tipping point when it comes to fiat
currency holding trust and value, so it is
obvious the price of gold will move steadily
toward $2,000 an ounce
within the next eighteen months. When Ben Bernanke was asked if
gold was money, he should have manned up and
given the true answer:
gold is better than money.
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There are approximately $200 trillion in
total global financial assets that are even
now, in the process of turning their
attention toward the $1.5 trillion in
market-available gold. If even a fraction of
this attention is manifested, the price of
gold will go parabolic. Do the math!
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I would think this would allow you to draw
an obvious conclusion; participation in the
junior gold market borders on the
mandatory. One of my most market-savvy
readers controls a large fund that made its
bones in the oil and gas sector. We met
just recently, and other than a modest
handful of pinpoint and highly strategic
investments in the energy sector, he is just
about ‘all in’ when it comes to gold.
For the less intrepid, my guess is that you
will be driven out of hiding and forced to
confront the fact that your stack of mouldy
dollars is not where you need to be.
Want to be, maybe – but actually
need to be? I am highly confident that
simple math and the erosion of purchasing
power for your dollars will bring you
around. And please think twice about
attempting to realize profit from playing
the U.S. dollar versus Euro dollar game; all
that amounts to is fiat cannibalism.
Staking out a position in the
business of gold
could make a noticeable difference in your
fortunes as we move forward. Do not forget,
we are all about prosperity and no other
sector (currency metals) can provide the
clean opportunity for personal financial
success.
For those of you who have been here for a
while, do you remember the third quarter of
2008? As the weak sisters were wringing
their hands and making reservations for
space on the window ledge, we were talking
about the emergence of an incredible
renaissance in
gold.
I railed against the paralysis of fear and
recommended using that fear as a sharp tool.
There were killings to be made in the junior
gold market; and the first step was to
breathe before knuckling down and
getting back to working a disciplined due
diligence process.
NovaGold Resources Inc.
(NG)
was trading at $0.60; with all of that
gold in the ground!
Atac Resources Ltd.
(ATC)
was trading at $0.07, sporting decent early
results, enough money to move forward and
strong management. At this time of writing,
both companies are now trading at over $9.00
a share. Common sense, reality-based
investing and the courage to act
while others cower on the sidelines,
translated into windfall profits. At least
for those of you who did more than
just read my report and nod your head up and
down.
So here we are, three years later and
(hopefully) much wiser. For those of us bent
on prosperity, we have chosen to ignore the
toxic whisperings of political leaders who
have obviously taken direction from Grima
Wormtongue. We have also shunned a
mainstream media that I feel has crossed the
line from bias to corrupt.
We deal in fact and fact-motivated opinion.
Fact: Central banks are afraid and driven by
stuttering fear. Result: The printing of
money has reached historic (and ridiculous)
levels. The purchasing power of the money
printed continues to go down (inflation). At
the same time the central banks are buying
gold. Figure it out!
Large managed funds are breaking with
tradition and increasing their total assets
in gold. Reason: As paper money continues to
lose value and gold continues to appreciate,
why would a managed fund not make the
intelligent move and increase their gold
holdings? Many of the funds have already
made the move to hold more gold; the rest
will follow.
Guaranteed.
As you are mulling this over, do not forget
the Europeans from all walks of life have
already accumulated gold and are still in
the process of adding to their holdings.
Lest you also forget, the people of India
and China, are lining up like lemmings to
buy gold (and gold’s stunted cousin –
silver). And as sure as I am sitting here,
I know that smart Americans are not sitting
idly by as the lack of quality leadership in
government lies fully exposed. Trekking
toward the beacon of gold by concerned
Americans can only increase.
The
Time is
Now
For
Junior
Golds
….but not without the basics
I firmly am of the opinion that the junior
gold markets will experience a powerful
renaissance of interest and activity. For
that reason I am going to include a few
basic pointers for your consideration. And
only a suggestion of course; but the more
seasoned and experienced penny market player
may want to consider reviewing the basics of
investing. Reason: the junior gold market is
(imo) on the cusp of going ballistic and I
would not want anyone to lose the due
diligence discipline that got us here in the
first place.
A rising tide lifts all boats…
Management:
I think it is important to invest in
companies that can boast a strong management
team; one with a proven track record. Prefer
management that includes the building of a
mine or a proven reserve of gold. That is
where I start, but am certainly prepared to
work down from this ideal as I consider the
merit of the property.
Of course, the success and work ethic of the
company doing the work on the ground enters
the equation here as well. An excellent
example of a company with potent management:
Endeavour Silver Corp. (TSX.V:
EDR)
Timing:
At heart I am a blue-sky investor. Right at
this moment, with gold juniors on the
threshold of hitting the global spotlight
like never before, I look for a well-managed
company with a property of merit.
In addition, this property must have a
proven resource and have the funds in place
to continue drilling in an attempt to expand
their resource. Sure, and I also wish I
could sleep through the night. Again,
working backwards – how about the company
that has a property of merit, has taken the
time to do all the necessary preliminary
work, and has a financed drilling plan to
move forward? A little more risk, but as
long as the share price reflects the level
of work and not the ham-fisted attempts at
premature promotion, this would be a company
that interests me. One look at a trading
chart can give you an answer when it comes
to unrealistic promotion.
Financial Disposition:
A great sprawling property and an aggressive
drill program are great – as long as the
company has the means to complete the
groundwork and initiate a meaningful drill
program. Also, make sure the company is not
carrying a load of debt and has more shares
than China has people. I enjoy companies
that raise money as they go,
and in between financings the work has
actually moved the company forward. I
especially like one of my companies as
providing the perfect model: three
financings… all of them done at a market
premium, all oversubscribed, and all
non-brokered. So, the whole idea is
financings that result in adding significant
value to the company and shareholder value.
Kind of basic, yes?
Share Structure:
There are a couple of companies I am looking
at right now that offer realistic studies of
how I perceive success. One company
has well over 100,000,000 shares out, with
only modest success on the ground,
and they will also need to raise more money
in the not too distant future. The share
price is languishing. Contrast this with the
other company that has far less shares out,
a full till, with management continuing to
expand their work on the ground. All this
and they continue to do the work as outlined
during their last raise of capital. In other
words, they set an objective and reach that
goal…and have done so for the last three
seasons.
Thanks to warrants being exercised there is
no need to raise more money, unless of
course they expand an already aggressive and
totally funded drill program. Some would
object that their share price is loftier
than it should be, but based on an
exceptional management game plan, solid
results from the field and a conspicuous
lack of traditional promotion, it is my
contention the share price is exactly where
it should be…and obviously the market
agrees.
Political Risk:
I love this one! And yes – you must do your
own individual due diligence and make
your individual decision on what
constitutes a realistic risk-reward
scenario. It does not take a genius to
invest in a company with a property of merit
in Canada or the United States of America.
Safe as church, and country risk assessment
does not really factor into the due
diligence process.
I use the word individual because we all
have our own threshold of pain and agony
when it comes to investing our hard earned
dollars in gold plays outside of proven and
friendly borders. For instance, I would not
invest a single dollar in any Mexican gold
play – unless of course there was the chance
of a complete financial home run and I could
get in dirt-cheap. Remember:
many
people to give their company a mention in my
reports pitch me aggressively. Some of the
private and confidential comments made about
Mexico leave me cold. Do I like Guyana? I do
not dislike Guyana, but I would have to
think long and hard before I recommended a
Guyana gold company that was exploring
anywhere near that country’s disputed border
with cash-strapped Venezuela.
I do have a
business
of gold
investment page that is in dire need of an
update; but even now it contains ideas worth
reviewing when it comes to investing in the
business of gold. And as usual, any and all
comments are welcome.
Larry Myles
Larry Myles Reports
604-408-7600
1-877-405-7600
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Larry Myles is neither a
geologist nor a financial analyst. I do not
purport to offer personal investment advice
nor recommendations. While all statements of
fact are derived from reliable sources, and
are believed to be accurate, I make no
warrant that they are so. You must do your
own research and check statements of fact
for yourself. My opinions are precisely
that, my opinions. I do not accept any
responsibility for any gains or losses you
may experience resulting from actions taken
based on my opinions. If not otherwise
qualified, you should consult with your own
personal financial advisor before engaging
in any investment activities. Larry Myles
Reports does not provide individual
investment advice, act as an investment
advisor, or individually advocate the
purchase or sale of any security or
investment. Larry Myles may actively trade
in the investments discussed in this
publication. Larry Myles may have a
substantial position in the securities
recommended and may increase or decrease
such positions without notice.
I do not know
your personal financial circumstances. I am
not your personal financial advisor. You
must do your own due diligence. By entering
this web site, or reading LMR reports, you
acknowledge and accept the foregoing.
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