 Half
Price Sale
Mike Hoy
May 3, 2004
When I read all the articles
being written today about the risk associated with gold and gold
stocks I have to ask myself if someone figured out how to solve
all the world's problems?
Have I missed something? No, I didn't, but I think a few others
may have.
Let's start by asking ourselves a very simple question. Why do
we own gold in the first place? I don't want to get into this
in depth because it would take more time than we have. There
are many different reasons why we own gold. As for myself, I
own gold stocks because I am scared to death of all other alternatives.
I was a broker, starting in 1978, I had a license for twenty
years. I remember the prime interest rate rising to 20.5%. I
remember the 30 year bond yielding 14-15%. I remember owners
of long term paper getting killed. I remember gold rising to
above $850/oz. The debt in 1980 hit $1,000,000,000 for the first
time. Where do we stand today? Crazy, right? No, it's absolutely
insane and our politicians should be held accountable for it.
I believe the 20.5% prime rate of 1980 may not be the high for
the cycle. But, do you hear any technicians talking about this?
The reality of owning gold is simple. It just makes sense. Each
and every day the reasons become more and more obvious. In the
end, financial independence may be decided as a result of the
exposure one has to gold and gold stocks. When all these central
banks and governments realize their largest assets are nothing
more than paper, then the real scramble will begin. I suppose,
at that point in time all these writers will be bullish as Hell.
If I read them right, they all agree that gold will be substantially
higher down the road. If this is the case, then why are they
so scared today?
Here's how I look at it. I believe, without a doubt, that gold
will rise in each of the next several years. I believe gold will
hit new highs, before it finally does peak. I think the possibility
exists that it could go to $2000-$3000/oz. before it's all done.
It could take years! If I'm correct, all gold stocks will rise
in multiples. With this as my guidelines I believe the real risk
is being caught out of the gold stocks or being under-invested
in them. Read this paragraph again! It's important! It's the
whole story!
Real wealth is created by investing not trading. I did a little
trading last year. I wish I hadn't. After taxes, I lost money
and my holding period, the price of the stocks would have had
to fall at least 50%, of my profit. I had terrific profits. I
bought my stocks right. I bought right after 9-11. I had terrific
gains. My total portfolio was up about 4X. My portfolio grew
because I had identified value and bought it! What excites me
the most is, I see a lot more value out there today than back
on 9-11.
I see these technicians saying what they do because, they really
don't have any profits! If they had profits, the last thing they
would want to do is pay taxes and then find out the stocks pulled
back, but not far enough to have made the trade worthwhile! Yeah,
my portfolio has been hit. What was 4X is now 2.5X. Do you know
what I think about that? I love it! I'll buy more! How many times
do we buy a stock, see it go up, and then say "I wish I
would have bought more?" Weakness, in the price of my stocks,
give me 20-20 hindsight. My three core holdings are doing fantastic,
as companies doing business. Two of my companies have just crossed
the threshhold to cashflow. Why in the world would I want to
sell them now? You've got to be kidding! I believe these stocks
will rise 10X in the next three years, the earnings from operations
will justify the price. If you want to have a "HALF PRICE
SALE" then make sure I have an invitation. If I can buy
these same stocks at half price then I can think of a return
of twenty times on newly invested money.
So what's the problem on the street today? I feel, perception
and emotion have taken over and we have lost sight of the end
goals. People are scared. they bought when they should have sold
and now they will sell when they should be buying. Their greed
and inexperience coupled with margin have them in a bad way.
Some people you just can't help! In order to be a successful
trader you have to do the opposite of your emotions. The time
to sell is when your gloating to your friends. Not after you
have had your butt kicked! If leverage has you by the balls then
you face a real test. Good luck!
Most people only have a small amount of their portfolios allocated
to gold and gold stocks. To those of you in this catagory, you
should be ecstatic. You have the ability to increase your exposure
to the metals at discounted prices. You truly are in the best
position possible. If you bought your current position at higher
prices you may have a opportunity to average down. If your companies
are doing well, as ongoing concerns, then don't be scared. If
you need "free" help or advice my e-mail is available.
If we would just take a few seconds and think of the reasons
why we own gold in the first place, then we may look at things
differently. If the street perceived things differently then,
I believe, pullbacks would be short and sweet. If you are fully
invested in the metals now, without margin, then don't sweat
it.
For those, not fully invested, take advantage of the '"HALF
PRICE SALE " smile and hope they give you a chance to buy
at even cheaper prices. Remember, the one thing we all agree
on- gold will be substantial higher down the road. With this
as a guideline, all gold stocks will be higher down the road.
A rising tide will lift all boats.
I'd be glad to share my stocks and my investment ideas.
Remember, Smile!
This truly could be the opportunity
of a lifetime!
May 1, 2004
Mike Hoy
Mhoy1954@aol.com
321gold Inc
Miami USA
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