Gold is stronger today with safe-haven interest kicking in given the problems in Japan and the Middle East…as of 7:45 am Pacific, the yellow metal is up $6 an ounce at $1,426…Silver is 3 cents higher at $35.93 while the U.S. Dollar is slightly negative at 76.49…the greenback has again failed to attract safe-haven buying interest which is clearly a very bearish sign for the American Dollar…Japan’s benchmark Nikkei closed down 6% today as the world’s third largest economy has taken a major hit with massive devastation in parts of that country following Friday’s incredible earthquake and tsunami…the outlook for the CDNX in our view has turned negative for the immediate future as detailed in last night’s article…the risk of a correction in the magnitude of 20 to 25% from the 2465 high last Monday has increased significantly given technical damage that was inflicted on the market last week…the CDNX has proven to be an extremely reliable leading indicator of the broader markets and what the Index seems to be telling us now is that there is trouble ahead for both the Dow and the TSX…as of 7:45 am Pacific, the CDNX is off 39 points at 2227…a drop below the 100-day moving average (SMA) at the 2200 level would be irrefutable confirmation that a major correction is underway…the good news, this would open up some incredible buying opportunities as the overall CDNX bull market continues…a drop to approximately 1900 could occur which would still leave the overall uptrend completely intact…Richfield Ventures (RVC, TSX) and Sidon International (SD, TSX-V) are strong this morning despite the weakness in the markets…Richfield, which recently released a 43-101 resource estimate for its Blackwater Project in central British Columbia, is up 40 cents to $6.40…the stock hit an all-time high of $6.68 this morning…Sidon, which took a hit last week after releasing disappointing initial assay results from its Morogoro East Property in Tanzania, climbed as high as 7.5 cents and is now up half a penny at 7 cents…Sidon announced this morning it has entered into an option agreement to acquire an 80% interest interest in a property adjacent to Canaco’s (CAN, TSX-V) Handeni Project…the company has also arranged a $2 million financing at 8 cents per share and has also appointed a director of communications, probably not a bad idea…Gold Bullion Development (GBB, TSX-V) is unchanged at 41 cents…GBB’s LONG Bars Zone is just as attractive as Richfield’s Blackwater Project but the two companies’ share prices have gone in opposite directions recently with Richfield now commanding a market cap four times that of Gold Bullion ($275 million vs. $66 million)…elsewhere along the Cadillac Trend, two companies worth watching closely are Visible Gold Mines (VGD, TSX-V) and Cadillac Mining (CQX, TSX-V)…at 40 cents, Visible Gold Mines has a market cap of $19 million but is sitting on nearly $9 million in cash and is rapidly becoming one of the most aggressive Gold exploration and development companies in northwestern Quebec with a focus on the Rouyn-Noranda region…VGD will start drilling at a second project during the last half of the month as it begins a 9,000 metre program at its Cadillac-Lucky Break properties, a partnership with Cadillac Mining….the first four holes of the program will be drilled near Vantex Resources’ (VAX, TSX-V) Moriss Zone, a discovery Vantex made last fall at its Galloway Project west of Rouyn-Noranda…GoldQuest Mining (GQC, TSX-V) is off a penny at 34 cents…any weakness in GQC should be viewed as a gift as this company is developing a quality pipeline of Gold projects in the Dominican Republic and also recently released a 43-101 resource estimate for its promising Toral zinc-lead-silver deposit in Spain…GoldQuest has strong management and all the money it needs to carry out is drill programs this year at Escandalosa, Las Animas and Jengibre in the DR…a 40-hole program started at Escandalosa in December and initial results are expected soon…Abcourt Mines (ABI, TSX-V) is also in good shape as continues drilling at two projects with 43-101 resources and reserves, Elder-Tagami (Gold) near Rouyn-Noranda and Abcourt-Barvue (Silver-Zinc) near Val d’Or…Abcourt is off half a penny this morning at 18 cents…
March 14, 2011
12 Comments
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BMR
What kind of damage percentage wise would a 20-25% correction in the CDNX have on the stocks in the BMR portfolio? Would it differ from company to company or would all of the companies see the same percentage decline?
thx
Comment by GREG H — March 14, 2011 @ 7:06 am
great question greg… It has been my experience that a 10% drop in the CDNX can translate from a 10-30% drop for stocks… baby out with the bathwater syndrome.. if the qualtiy of the company is good nothing to worry about.. but some are and have been overvalued.. they will take a hit.. the distance between the 200 day and curent SP will prbably tell the tale…. my portfolio is down 10% in the last 2.5 months… cdnx abut 10 as well …
Comment by Jeremy — March 14, 2011 @ 7:40 am
I would echo Jeremy’s comments, Greg…….and I will add…..as scary as the markets may look at the moment, the scenario that I believe may unfold will be an incredible opportunity to build wealth……just like we saw at the bottom of the correction last summer……events such as that (which could repeat again) are how you can build a fortune if you’re prepared for it………when there’s blood in the streets, that’s when the profit opportunities are the greatest…..
Comment by Jon - BMR — March 14, 2011 @ 8:05 am
I agree Jon, GBB is looking like a great buy at these levels for exampple, IF it goes any lower I will be buying with both hands. We will look back at this time and say damn, if only!
Comment by Herb — March 14, 2011 @ 8:15 am
Thanks Guys for the feedback, so you think you should just hold the good ones and buy more of those and get rid of the marginal ones.
thx greg
Comment by GREG H — March 14, 2011 @ 9:24 am
Hello everyone, some of the stocks in the portfolio and the others that we are watching are already at, below or close to their 200 day ma (CUI, VGN, TRM, SFF, GBB, SD, VGD, EVR). VAX, ABI, CQX, GQC, TYE and especially AGE and RVC presently look/are stronger. Should we look further back if shuffling or re-building a portfolio? Is the bid:ask ratio a potential indicator; this afternoon ABI’s is 6:1 suggesting to me that shareholders are reluctant to sell and there are a lot that want to accumulate? Thanks. 🙂
Comment by Andrew — March 14, 2011 @ 11:30 am
Good question Andrew, I wish I had the answer, but I am wondering the same thing, thinking of selling then buying back at a lower price or just holding and buying more at lower prices and average down. Hard decisions.
Comment by GREG — March 14, 2011 @ 12:29 pm
Hello Greg, I sold my SFF shares because of the continued poor performance of the stock and management (I don’t even think the second rig is at Santa Sofia yet – a month after it was supposed to leave Bogata). I resisted selling but it got to a point that I knew I could sell at a loss and still get back in at a lower sp and therefore increase my shares. So now I’m sitting on cash and a few shares in GQC. I’ve watched the trading patterns of AGE, TYE, ABI and CQX and I really like those. It will be interesting to see how GQC responds to drill results from DR in the current market pullback.
Comment by Andrew — March 14, 2011 @ 1:32 pm
Jesse Livermore said it Best Greg … and in essence
All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis
and…
“There are times when money can be made investing and speculating in stocks, but money cannot consistently be made trading every day or every week during the year. Only the foolhardy will try it. It just is not in the cards and cannot be done.”
the latter I have tried twice and got burned both times.. I have held a tech company Route1 (ROI) for 4 years.. a broker friend asked howI had the patience to hold… belief!!
It has been said that the average hol;ding time for a stock is less than 9 months… while prudent to prune trees in the spring, tis the same for your portfolio. but cutting the whole tree makes no sense..:)
Comment by Jeremy — March 14, 2011 @ 2:35 pm
Well, GQC has dropped but on low volume. So, I would expect a sharp rise if the results are good. Speaking of results, drilling started late December as stated in their NR and a few holes were planned in Dec with drilling to ramp up in January. I would think results from some holes should be any day now. Anybody know what the turn around times are for results in the DR? I sent an email to the company last week……still waiting for a reply.
Comment by Dan — March 14, 2011 @ 5:09 pm
Jeremy
thx for the response, having a hard time deciding which ones to prune,lol, everytime I turn around I am getting bombarded with all of the financial experts I subscribe to saying go to cash, the stock market is going to correct big time and take the mining shares with it, selling now at a loss is a difficult thing to do. I keep thinking back to 2008 when some good jr companies went to 4-5 cents a share, and some companies like Goldcorp was 13 bucks a share, hoping that we are not going to see that kind of correction, if so would rather be in all cash and pick up some great buys. oh well if this was easy we would all be wealthy.
thx again
Comment by GREG — March 14, 2011 @ 5:57 pm
Would be great if you guys added Troymet Exploration Corp. to your portfolio. I learned about it here first. Both Troymet and SilverQuest seem to have some great properties in the same local as Richfield.
Comment by Michael — March 14, 2011 @ 6:26 pm