..
Gold Stock
Alert:
Watch the
Gold Stealth Bull
Bob Moriarty
November 4, 2002
I began warning
of an impending decline in the stock market and a gold stock
correction about the 20th of September. I may have missed
the top
but not by more than a few
days.
And on the 14th of October, I suggested that it was once again
safe to be buying gold stocks. Again, I
didn't miss the bottom by more than a few
days.
I want to warn
readers now of the Stealth Bull. It's here and while it's been
creeping higher, few people recognize the significance. If you
like listening to the gold and silver cheerleaders, they will
fill your ears with stories of how gold is going to go up $50
in a day, "any day now" and silver is headed for $100,
"any day now." Beware of the cheerleaders, they will
lead you astray. The best bull of all is a Stealth Bull, one
which charges forward to new highs, then falls back and scares
hell out of everyone, then charges forward.
Did you know
that there are actually people who believe the price of gold
is being held down by a conspiracy? Gold is 20% higher and has
been in a bull market for over three years and there are people
who still think it's being held down. But they are the same people
talking about a $50 move higher in a day, "any day now."
You don't want
to see gold going up $50 in a day. That's what it did back in
January of 1980 just before it hit its high. $50 moves take place
when the Bull is about to collapse, not when a bull starts. Instead,
a Stealth Bull is what you want to see. It's the three dollars
up and two dollars back which can keep going on for years.
We are in a
bull market. Forget conspiracy/manipulation theories. You can't make money betting on manipulation.
All markets are manipulated. That's what Alan Greenspan thinks
his job is, to manipulate the markets. If you believe in conspiracy
and manipulation, you are saying you think Alan Greenspan is
a Master of the Universe, in complete control. And that's about
as likely as pigs flying.
We are in a
gold bull market. And I'll point out what someone else should
have said long before now. BUY THE DIPS. In the gold market,
the stocks tend to lead, then gold catches up, then the stocks
start crashing even while gold is still trying to inch higher.
Then gold follows down. BUY THE DIPS, you had your chance in
the last couple of weeks, did you take it?
Gold stocks
have come down a lot since late July when there was one peak
and mid-Sept where there was another peak. If you were astute
enough to take profits at either point, you would have been able
to pick up some real winners cheap in the last three weeks. Many
stocks were down 50% and more.
I hold a core
position of gold shares. And I hold a lot of other shares I trade.
This way I never miss one of those $50 up moves. (And hell, they
might happen someday) and I keep picking up small profits.
You will not
hear much from me when all gold stocks have been moving higher
for months, I hate talking about stocks when everyone wants them.
But when no one loves them any more, I take pity on them. Stocks
have been unloved lately and you should have been backing up
the truck. When they double or triple, sell some, I can't tell
you the perfect time, no one can. Sell something when you have
profits. And don't deal on emotion, buying or selling for emotional
reasons is a sure way to lose money.
Here's some
of the lately unloved but still worth having stocks I watch.
(1) NovaGold
(NRI and NLGLF) will be announcing a new resource in the next
couple of weeks. The amount of gold they have at Donlin will
surprise everyone in the industry. Except me. There is a bond
issue on the ballot for Tuesday for the state to build an all
weather road from the barge site on the river, 18 miles to the
Donlin Creek prospect. Expect it to pass easily and it is just
one of many milestones on the route to a 1 million ounce + per
year mine at Donlin Creek.
Also NovaGold
will be putting Placer Dome on 90 day notice as they complete
their $10 million dollar exploration at Donlin in the next week
or two. As soon as they announce the notice, NovaGold becomes
owner of 70% of a very large deposit. Placer Dome does have a
back-in right which they may or may not exercise. Either way
it's a good deal for NovaGold and the market will run the stock
higher when Placer Dome announces their decision just because
it removes an uncertainty.
(2) Lakota
Resources (YLA and LOKRF) announced a stock split effective
later this month. When's the last time you heard of a gold stock
splitting other than a reverse split? Lakota continues to creep
along making new high after new high. They have a bunch of gold
properties in Tanzania including one next to the property Barrick
bought from Sutton. The gold deposit runs right on to the Lakota
property. Expect to hear about a new drill program shortly.
(3) Gallery
Resources (GYR) is in the midst of a interesting
drill program
at Bruce Pond in Newfoundland. I
like Gallery
and I like their chances in Newfoundland. Someone is going to
do very well up there and I suspect it may well be Gallery. It's
low risk, high potential stock.
(4) Desert
Sun (DSM and DSUNF) is also starting a drill program announced
on October 24 (but not on their website yet). Theirs is in Brazil
on the Jacobina property which already has a 3.6 million ounce
resource identified. President Stan Bharti intends to increase
the resource to at least 6 million and hopefully 10 million ounces.
At a higher price of gold, they may well start up their on site
mill and begin production of gold. This is another fairly low
risk, high potential stock which has not backed off very much
from a yearly high.
(5) Candente
(DNT and CDOUF) has programs in Newfoundland and Peru. This company
has my vote for the management with the highest potential for
finding a large gold deposit. The stock has made a giant correction
from $.65 down to the lower $.30s. It's a low risk buy around
Canadian $.35.
(6) American
Bonanza (BZA and ABZGF) currently selling for Canadian $.13,
down from a yearly high of $.25. They are one bureaucratic signature
away from beginning a decline this fall. Expect to hear about
them going into production early next year. I have a piece of
the ore from Copperstone. It's beautiful. To reduce the time
and cost of going into production, they are going to run a front
end gravity separation plant on the ore. It will be 2-3 years
before they go into full production. This is another company
where I really like the management.
(7) Silverado
(SLGLF) (maybe they should be called Golderado) has begun work
at their Noland Creek deposit north of the Arctic Circle in Alaska.
They won't begin to wash the material until next summer but they
are in production. The stock shot up from $.04 to about $.60
before settling down to around $.40. Correction's over, buy the
dips. They have another mine near Fairbanks and a mill which
the market doesn't value at all. If gold heads for $400 as many
(including me) believe it will soon, the market will wake up
to the incredible leverage offered by this company. And it's
run by really nice people.
(8) Western
Copper (WTC and WCOPF) (should have changed their name to
Western Silver) was supposed to have announced a new resource
in September. They have a giant silver and zinc deposit at Penasquito
in Mexico. When they have finished defining their resource, they
will be one of the biggest silver mines in the world. They announced
drill results recently and have put off the new resource until
this drill program is complete. I'd guess you can look for a
new resource to be announced in the next six weeks. As with NovaGold,
the new resource will take almost everyone by surprise. The stock
has been as high as $4.28 this year (where I took profits) and
now sits at $2.70. (Where I intend to buy more).
There are dozens,
maybe hundreds of other good sound gold and silver stocks around.
There has been a healthy bull market and a perfectly normal correction.
BUY THE DIPS. This bull is a Stealth Bull, the very
best kind with lots of life ahead of it. When your postman tells
you about the gold shares he bought, sell yours, you won't need
to hear from me or any of the so-called gurus. Or when you have
made a real nice profit on your trading shares. Remember, you
don't marry gold shares, you just hold them for awhile. Learn
how to take profits. And then BUY THE DIPS until the
market gets crazy. It will, you can count on it.
-Bob Moriarty
November 4, 2002
_______________
 321gold Inc Miami USA
|
