As I said, I have been largely sitting on my hands at sidelines in the past few months while watching the stock market going up and up relentlessly. Till now I have been wrong in betting that the general stock market will significantly corrected soon but I still believe firmly that the day of reckoning will come. The more it goes up, the more risk it becomes, especially if you jump in now at this very inflated level. Having said that, the only sector I'm aggressively buying right now is the precious metals. I guess no surprise for those who have known me for some time via this blog that I'm a gold/silver bug. Nothing can really shaken me up in my belief in gold/silver, and now platinum. On one hand it does not make one feel good when watching the prices of gold and silver coming all the way down from its peak of $1900 almost two years ago. On the other hand, I do hope it can go down more but quickly to shake all the weak hands out while allowing me to buy more at a cheaper price. It is a bit frustrating to see it bouncing back and forth within a narrow band percentage wise.
However, if you look at the ratio of gold stocks vs gold, gold stocks have not been so cheap in the past 5 years relatively to the gold price. It is now at the same extremely low level only seen in Mar 2009 when everyone felt it was an end of the world. But that, looking back, turned out to be the best time to buy anything. We are now having a similar sentiment towards gold and silver stocks. Almost like there is no future for them anymore and no one wants to have them. This in my mind will be one of the best times to buy them actually. Of course I don't have a crystal ball and can tell you that this is the exact bottom for mining stocks but I'm holding my nose and breath and start to buy more and more these days. I especially like the gold and silver royalty companies like RGLD and SLW. These two are the best and safest gold and silver companies you can find.
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