minnow

“Gold Master Investing 101: (Buy & Hold) & Trade (Minnows) for Monthly Income”

I recommend for most Investors; to buy & hold the Killer Whales, Sharks, Goldfish and Starfish for the potential exponential growth (Capital Gains) they will have in this infant Gold Bull Run just starting; all detailed in my posts, “Ocean of Gold Manual” volume 1-Private Investor, my top 15 picks and my newsletter: “The Gold Net”

 On the bottom of my Content page of “Ocean of Gold Manual”; see this heading: (Note: See Appendix for); read here today to learn more about how to make money & profit from all classes of  gold producers; (buy & hold) and/or trade the Minnows for additional monthly income. See how below:

 Note: See Appendix for:

1. My 6 Investment criteria for these Gold Mining Stocks.

2. General Investment strategies I use for the different classes of Gold/Precious Metal Producers. The risk/reward & amount of potential profit is different for every class & every stock within that class. I use my own proprietary analysis of Fundamental & Technical Price Charts that are meaningful to me to determine my top investments in each class. I’m a fundamental Value Investor & a Technical Chartist; who uses stock prices relative to different historical time frame price trading ranges; always sensitive & subjective to Market perceptions.

 

My analogy definition of the “The Killer Whale”

Gold Producers:

 1.The Killer Whales:

killer whales

These are the Majors: Gold producing companies with many operating mines, huge reserves, big gold production & future large expansions in their development pipelines. The Institutional Investors buy this class for size & safety; you can too. Killer Whales are apex predators, the top of the gold food chain; they can swallow (acquire/buy) another whale, a shark, a goldfish, a minnow and do it strategically at times to increase their gold production and gold reserve base. They all started out as a minnow, at sometime in their history, long ago, looking for gold reserves to develop on their way to the top. These big fish develop military like bureaucracies to run their huge worldwide operations.

 Investment Net Profit Potential:

These 3 Killer Whales are my top picks for potential (double & triple percentage/ yearly returns) over the next 18-36 months; the middle of the Gold Bull Run; in my opinion.

(Note: 3 top Killer Whales below this heading in Manual)

My analogy definition of: “The Shark”

Gold Producers:

 2.The Sharks:

shark

These are the Middle tier Gold Producers with several mines & good reserves constantly trying to expand their gold production & reserve base to become the next Killer Whale.  The Institutional Investors also like this class for size & safety; you may also, I do. Sharks are aggressive predators; they can buy, merge or joint venture with a baby killer whale, another shark, a goldfish, a minnow and do it aggressively to increase their gold production and gold reserve base to fight their way to the top; to be the next Killer Whale. They all started out as a minnow looking for gold reserves to develop. I like this class for their lean, mean and sharp management always expanding to enhance shareholder value.

 Investment Net Profit Potential:

These 3 Sharks are my top picks for potential (double & triple percentage/ yearly returns) over the next 18-36 months, the middle of the Gold Bull Run; in my opinion.

(Note: 3 top Sharks below this heading in Manual)

My analogy definition of: “The Goldfish”

Gold Producers:

 3.The Goldfish:

goldfish

These are emerging 1st time Gold Producers-a Minnow about to produce gold. This class along with Starfish: Poly-Precious Metal Producers is one of my favorites for exponential (multiple bagger) stock returns. They haven’t been recognized by the Institutional Investors yet, are lean & mean to keep gold production costs low ($500-$800/oz) and have not morphed into a huge military bureaucracy, like the big Killer Whales often do. The potential for big exponential (Multiple baggers) stock growth comes from finding these rare, exceptional, about to produce gold stock companies, especially in the beginning of this infant Major Gold Bull Run.

 Investment Net Profit Potential:

These 3 Goldfish are my top picks for potential (Triple percentage/ yearly returns) over the next 18-36 months, the middle of the Gold Bull Run; in my opinion. If you aim high at your target goal; say it is a 5 bagger (400% Net Profit) in 18-24 months & you get a 2 bagger (100% Net Profit) in 2 or 3 yrs, you still win big; much better than T-bills or bonds. This is my favorite top money making class along with the Starfish.

(Note: 3 top Goldfish below this heading in Manual)

My analogy definition of: “The Minnow”

Gold Producers

4. The Minnow:

minnow

mine development & gold production. These are usually the penny/dollar stocks on the TSX in Canada & the AIM stock market in London, UK. These are for strong willed risk takers and seasoned Investors who understand the very high risk/high reward potential. This class, like minnows in the sea can be swallowed up early by the big whales and sharks above for their gold rich reserve assets. Or die a quick death from poor management or lack of money to develop a reserve for a future gold producing mine. Some of these operations are run very poorly and it’s my business to separate the wheat (the good) from the chaff (the bad).  One important method I use myself to separate the good from the bad is to look at the big private money Investors backing these gutsy promoters. If they’re pumping millions into a good management team, then with my other criteria (gold reserve asset size & grade), I can make recommendations for potential super growth or trading opportunities.

Investment Net Profit Potential:

These 3 Minnows are my top picks; have long term growth opportunities (You must be patient here-they take time) and/or you can trade them for monthly income along with others I will give you; 1 a month (12/year) featured in my newsletter: “The Gold Net”. See Appendix for details.

 (Note: 3 top Minnows below this heading in Manual)

My analogy definition of: “The Starfish”

Gold Producers:

5. The Starfish:

starfish

This is one of my favorite types/classes; Gold & Poly-Precious Metal Producers; when 2 or more precious metals are produced from the same ROM (Run of Mine) ore mined. Super low cost production occurs when pay metal credits are being sold from several metals contained in the same mineralized ore body. Example: Copper, Gold, Silver, Platinum, Palladium, rare earth metals and others. . I have made my biggest exponential profits from these Superstars of the Precious Metal Universe. These are the Starships to Super Successful Gold Investing.

Investment Net Profit Potential:

These 3 Starfish are my top picks for potential (Triple percentage/ yearly returns) over the next 18-36 months, the middle of the Gold Bull Run; in my opinion. If you aim high at your target goal; say it is a 5 bagger (400% Net Profit) in 18-24 months & you get a 2 bagger (100% Net Profit) in 2 or 3 yrs, you still win big; much better than T-bills or bonds. This is my favorite top money making class along with the Goldfish.

(Note: 3 top Goldfish below this heading in Manual)

Appendix

 1. My 6 Investment criteria for these Gold Mining Stocks:

 1.1) Reserves (from QP Reports) & Actual live Production Profits

Reserves determine In-Situ Value & Life of Mine; based on designed Mining Plans & Gold Production Process rates. This gives you; the Investor; planned live production capacity; verified after being built & commissioned. Actual Gold production: oz/year x (World Gold Price) ASIC (All-in sustaining costs) = Net Profit for a company. Example:

World price: $1200/oz, ASIC: $800/oz, Net Profit: $400/oz

Net Profit:

   100,000oz/yr x $400/oz = $40,000,000/yr

   500,000oz/yr x $400/oz = $200,000,000/yr

1,000,000oz/yr x $400/oz = $400,000,000/yr

 AISC definition:

“All-in sustaining cost” is a measure that captures direct operating costs, corporate and exploration expenditure and capital investment required to sustain the business.”

 Reserves are constantly being explored, defined & assessed by good management to increase reserve value, live production & (LOM) life of mines. Directors & Management can build reserves by exploration & acquisition; once secured and known they then design Mining & Process equipment to determine live gold metal production capacity & LOM (Life of Mine). This is their job and they have control of this; but not the price of Gold only an estimate & the current price.

 Note: This example is for all gold producing mines: new (emerging) & existing gold mines. (Gold Price – ASIC = Net Profit/oz). This is real & powerful! Example: If gold rises suddenly like it just has or say $100/oz; then r…..c’s yearly production earns another: 6 million oz/yr  x $100/oz = $600,000,000usd. Now think big & it gains $1000/oz over the next 2-3 yrs, r…..c’s earns another; 6 billion usd/yr for the same work with no new expansions. That’s why you want to be an owner of your own
Gold (Printing) Mining/Producing Machine.

 1.2) IRR (Internal Rate of Return):

 (>20% fair,>25% good, >30 best, >40 very best, >50 Supreme!)

 1.3) Capex payback: Based on various IRR mining design & process models: (Less than 3yrs; the best; less than 5ys very good.)

 1.4) Cash Cost: (direct operating costs: (Excellent Range: $400 – $600/oz) for any gold producing mine in today’s gold market;

plus

Corporate overheads, Exploration expenditure and Capital investment required to sustain the business (I call this the Subjective-Mystery Cost) that ranges all over the show from ($100 to $500/oz) is then added by Company management to Cash Cost to get the:

ASIC: (Excellent Range: $600-$800; Good Range: $800-900; Fair: $900-$1000/oz) for a Gold Market Price of: $1200/oz.

 Obviously with a low (ASIC: < $800/oz) in a $1200/oz Gold Market leaves some serious Net Profit: $400/oz. If the company is on track to produce over 1.2-1.5 million oz/year; like for example a…a Gold; that’s $480 – $600,000,000usd per year. I call that; live production leverage. That’s when the big projects & acquisitions come out of the woodwork (Big checks are written) to stay ahead of the Countries Corporate tax man!

 The 4 most important items to create exponential (Triple digit or more yearly returns) stock growth:

1.41 Gold Reserve size & Grade: (Company discoverers or acquires this.)

1.42 Yearly Gold Live Production – Au oz/yr: (Company controls this.)

1.43 Cost differential from market Gold Price minus ASIC = > ($200-$400/oz Net Profit): (Company controls ASIC)

1.44 Gold Price: (Market controls this; currently $1200/oz)

When the Gold Bull runs, watch the fireworks of stock appreciation growth!

1.5) Charts of share price history (Technical analysis!)

 I’m fundamentally a Technical Chartist for all time frames trading on anything (Gold Stocks, Commodity Futures including FX-currencies, Stock indexes, Stocks….etc). I have a passion for Gold Producing Miners on the TSX from the Minnows (Penny/dollar Stock explorers to the Killer Whales-The giant gold producers); all have money to be made on stock growth and/or trading; each depending on what time frame strategy you are using, market perceptions & sentiment and trading volumes of your chosen investment?

 What makes producing Gold Mining Companies unique to the world of investing is that you have 3 components going on at once that no other company anywhere can claim:

1. Huge leverage inside the company; defining reserves (Penny mining stocks-Minnows) or live gold metal producing leverage (All Producers-Killer Whales, Sharks, Goldfish & Starfish)

2.Huge leverage outside the company on purchase price & trading volumes (Penny/dollar Stock: under $1.00/share-Minnows & all others under $5.00/share I like).

3.Last but not least; the most important factor; there is no other company that produces a commercial product for industry use & currency (historically & currently far more valuable than fiat colored paper) from the ground they sit on. That means there is never a need to look for or advertise for customers/clients to buy your products, it’s already money. The ultimate niche business!

I use my own individual thoughts & experiences to trade. You will learn a lot about this in my monthly Newsletter “The Gold Net” as part of my service to you; The Investor

1.6) Fundamental analysis of Company & their Projects: (Management, Location, Infrastructure & utilities, Investors & Financiers (Backers) investing in the Company, Reserves & Grade and much more)

This is like a recipe for a good stew; I have my own ingredients: (methods, strategies & techniques that were acquired by hard work & tough, hard fought experiences). I’ve decided to share this with the World.

 

2.General Investment Strategies:

 2.1) for big multiples and exponential stock growth potential; think small, yes small:  1st time gold metal producers (GoldFish) & Poly-Precious (StarFish). Example my top GoldFish pick (.ed .a…e Mining in South America) with a market cap (total shares x share price) has gone from $0.30/share to $0.72 in last 30-40 days (a 2.4 bagger or multiple on your investment). Why? 3 key reasons, (It’s about to go into production, gold is rising & it has a small cap or value at this time…It was around 65 million, now x 2.4 = +- 156 million. For this to become a 10 bagger (10 times your money) the stock would have to move from the current price of $0.72 to $7.20 and market cap would go from 156 m to 1.56 billion and so forth. If that happens in 18 to 36 months from 1st production you’ve got a nice winner & investment in the bank. Better than 2%/year Treasuries or negative rates???

 2.2 As the market cap of the companies get bigger with growth and then even bigger; the opportunity for exponential growth diminishes to returns of 2 to 3 digit possibilities depending at what time & price you enter the stock at? Medium to Big Cap companies can also double or triple for several reasons: (down trodden & out of favor by Institutions who favor EPS over Value plays (the Warren Buffet method-much better investing!) My top 2 Starfish picks: r…..t & .i..t u….m (my favorite poly-Precious metal stock) are in this boat of possibilities). Both huge companies but have a lot of upside from their current stock price based on gold rising & increased production to power this opportunity I recommend.

2.3 In each of my 15 top picks within this manual; it will become better understood by you the Investor seeing charts & examples; as you read my Fundamental & Technical Chart Analysis of each stock and absorb my recommendations. I will be teaching and showing examples in detail in my monthly premium newsletter: “The Gold Net” for all my strategies on each different class & stock within that class.

 One quick example on trading the Minnows:

If you trade the penny/dollar stock (explorers) in short time frames of say; hourly (yes hourly), daily, weekly, or monthly; you have a high risk/reward ratio. This creates a big potential trading Net Profit (a monthly income) compared to a buy, hold and wait strategy (24-48 months during this gold bull market) which I recommend for the (Killer Whales, Sharks, Goldfish & Starfish) stocks within this manual

I will teach you how to trade the penny/dollar stock Minnows in: “The Gold Net”, my monthly newsletter; I will help you with this by giving out at least one Minnow (penny/dollar mining stock) a month (12/year) to succeed; choosing the high value trade choice is 90% of the battle and can create monthly income for you.

So here is a Minnow tip; I pick Minnows that have low caps, low price, very high trading volumes, have advanced exploration projects (at least one), can be in play to be swallowed up by all the other big fish), multiple good projects with some grade & reserves defined (drill holes), good management, quality of backers/Investors, on the TSX, good locations of projects and a few other criteria.

So once I give you all this in my “Ocean of Gold Manual” and once a month (12 picks a year) in my newsletter: “The Gold Net” what’s next?

In the newsletter you will get trading strategies for the Minnow (penny/dollar stocks) to earn monthly income (if you desire to go down this road of hard work?) depending on your skill level?

Here are 2 examples: These Minnows meet all my criteria from above; except for one! Everything else is the same great projects, good management…….etc.

1.Company xyz trades: 180,000shares/day in the yearly range hi/low of $0.36 – $0.08/share

This one of course because it has great liquidity to get in & out of quickly and possibly in a silent takeover play? If trading range for the week or 2-3 days is 0.15 to 0.18, buying 10,000 shares at .16 and selling at end of 5 days is .19, you make 0.03 x 10,000 = $300/week or if it falls to 0.10, I would buy another 10,000 shares & have an ave of 20,000 shares at $0.13 and sell when it hits 0.18, the top of the trading range for a net profit of 5 cents x 20,000 = $1000; Not bad.

This is one strategy and I may have one or more of these trades (3-4) going at once.

The safety net for this particular example is that the stocks I pick have a golden safety net under the whole company in the value of at least 1 major asset or more; which I find for you; meaning they either develop it, Joint Venture it, merge or sell out to a Shark. This gives you big protection from the company ever going broke.

And if a Shark swims in to swallow this major asset at a premium of say; 60% on the stock and offers a buy out for their stock of 32 cents cash or their share equivalent, you have just made: .32 – .13 = .19 x 20000 = $3800 Net Profit for the trade, Not bad if you have 3 or 4 of these going at once; with their own gold safety net under each company. This is what I call inside leverage on the asset values they have defined and continue to upgrade to make it developable or desirous to a big Shark.

This is time consuming and hard work. It’s not easy but can be profitable and give you monthly income while you watch your other capital gain deals grow!

2.Company abc; it trades: 30,000shares/day in the yearly range hi/low of $0.37 – $0.13/share

I WOULD NOT TRADE THIS STOCK, NO VOLUME EVEN IF IT HAS GREAT ASSETS!

The Gold Master Africa – Gold Master Investing

GoldMasterAfrica_MattMontauk

 

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