Edition 1
If you believe that mutual funds and real estate are the place to be, you may want to think again. Once taxes, heating costs and inflation take a bite, it is a different story. The Government is trying to tell us that inflation is under control, but if you read between the lines and really understand the CPI and PPI numbers will see they do not include things like food, energy and consumables; things that we use most. We are being told that inflation is around 4% when in reality it is near 14%. Are you making 14% a year on your investments to keep up with inflation, plus another 10 to 20% to live on?
So, where can we make serious money with relatively low risk? Our specialty at Stock-Tracker is to locate undervalued sectors. There are many tools one can use to analyze stocks, but in all reality common sense will go a long way.
Let me explain, during 2001 to spring 2004 almost all of the gold stocks made tremendous gains, anywhere from 500 to 1000% on average. A peak was made and many of the small cap stocks lost 70% or more. But now, the large caps have gained strength making 25 year highs, while most of the small caps have stayed in a range near their lows, but I don't believe this will be for long. Some of the small caps are starting to move.
I believe the point has come, small cap mining stocks will be in major demand and we will witness tremendous gains in the sector.
Here is what a reputable fund manager is saying about small cap (junior) mining stocks:
"These junior companies are similar to biotechnology stocks. You can make a lot of money if you have the right project," Land said in an interview. "They are cheaper than bigger stocks and safer than ever because of the cushion from gold prices being so high." The price of bullion hovers near record highs, asset manager Steve Land of Franklin Templeton Investments is raising exposure to speculative junior gold miners with promising exploration plans.
The manager of the $506-million Franklin Gold and Precious Metals fund raised his weighting in junior, or smaller gold companies to 7,7% from 5,3% between March and end-September.
Our first recommendation is Linux Gold Corporation symbol LNXGF. The train has just left the station if you take a look at the chart. Legendary market analyst Joe Granville has recommended Linux, followed by Bema Gold (BGO) and GoldCorp (GG). If gold prices proceed toward $600 or $700 per ounce, stocks such as Linux should trade in the dollars per share. LNXGF has good liquidity that should attract many investors as the bull market in gold stocks unfold. See www.linuxgoldcorp.com
ALL TIME HIGH - US$4.60
Targets
Short Term: $1.50 - Gold $600oz
Medium Term: $4.00 - Gold $700oz
Long term: $10-15 - Gold $800-1000oz
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If you need a good stockbroker see: http://www.penntrade.com/
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