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What are cheap? Some Gold and silver stocks…

 

We cannot tell the future but we try anyway. It seems to us that the stock market is as vulnerable to a more than 20% downside as it has ever been. The true P/E ratios for some of the leading stocks are at nose bleed levels, insiders who as officers and directors are the most informed of all have been selling at one of the highest rates ever. Last week they sold $456 million of their own personally held shares. Moreover the value of all stocks is now minimally at approximately 126% of Gross Domestic Product.

View the retail sector in the U.S. and you see a disaster. Look at the auto industry….it simply cannot sell enough cars. The other side is that the quality of most automobiles is so high that replacement is not necessary at the same rate that it was in the past.

Get this very clear, the brokerage industry cannot afford another bear market. All steps have been taken to keep the stock market up. That includes the central banks buying stocks to support the stock markets throughout the world. You can see the central bank come in at the last moments and the stock market turns up on a dime. You can also see the blatant manipulation of the gold and silver markets.

While some have advised not to invest in gold mining stocks over the last three years, we did and did see some go up 800% to 1200% during this time period. The greatest time to invest in mining stocks is when they are being bludgeoned and have plunged in price. Our analysis suggests that prudent accumulation of mining shares will be well rewarded soon.

Our analysis has indicated that gold stocks are at the cheapest value level in decades. And as always, few investors will take advantage of it.

                                         “ When prices are high, they run to buy……

                                           When prices are low, they let them go.”

For most, that will never change.

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