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Pitching Pennies for DollarsBob Moriarty I grew up in the 50s and early 60s. We didn’t have much money. People were still recovering from the Great Depression 1.0 and WW II. So as kids I played with tops, yo-yos and marbles. For those who could afford a cheap pocket knife mumblety-peg was a fun game. But if you needed money for candy you had to head over to the nearest wall that served as a craps table of sorts. Accounting for candy was simple. You had penny candy that cost a penny. If you did well at the casino, candy bars were all $.05 as was a small bottle of Coke. Gambling for high stakes money was in the form of pitching pennies up against the wall. As many who wanted to play could participate and naturally the more players, the more money at risk. Each player would stand a specific distance from the wall and pitch his penny at the wall. Whoever was closest to the wall won all the money. I make a couple of important points in my books about finance and investing.
(Click on images to enlarge) BCM is a great analog for the resource sector in general. If you look at the chart of BCM, we had a monster crash in late 2008 and then a rally to the moon. In January of 2016 we had another horrific crash and giant rally. Again in March of 2020 when silver went from under $12 to almost $30 in five months. In all those bears/bulls, the junior resource stocks mirrored the action of Bear Creek with one giant difference. In percentage terms the very cheapest shares, those under $.05 went up the most. I remember one piece of really crap stock that did a private placement at $.05 in 2008 to raise enough money to maintain management’s lifestyle with a couple of drill holes tossed in. They hit and the stock ran to $5. The company raised a couple of hundred million bucks and spent $100 million to define 800,000 ounces of gold in Tanzania. Naturally investors blew them off and they spun off money and projects into different names with the shares trading for less than the cash they had on hand. But a 100-1 payback would fund a retirement. On September 1st I did an interview and predicted a near-term bottom for the metals. I was pretty close in the interview. Silver did bottom on the 1st and gold bottomed four weeks later so I’m comfortable saying I pretty much hit the target. Gold did take a little longer to bottom but it hit a lot on September 28th. Both of them and the stock indexes tested the bottom just lately. I am not one of those people who believes he can call price. Actually while I know a lot of people who think they can, I just don’t know any who really succeed. But I’m pretty good at using sentiment. There is no magic to it and I show readers how to use it in my books. I am not a GURU. If you look at the chart of BCM above, it should be clear where we go from here. It always looks darkest before the dawn but that is when to start throwing money at really cheap juniors. These are all stock I have owned and several I have been adding to lately at the new yearly lows. When the market turns it doesn’t care about interest rates or Ukraine, management, commodity, jurisdiction or the elections that may or may not take place a week from now. The market hits a bottom and runs higher full speed ahead. Typically it will have at least a tradable top in six to seven months so you don’t need to marry any of these stocks. I have listed ten stocks I believe will run hundreds of percent higher soon. The two on the C exchange are just about the worst managed shares I have ever seen but a rising tide lifts all boats, even the ones whose captains are idiots. ABN-V Aben Resources Some I own, some I don’t but all are really cheap. A couple may fade away into the sunset but a handfull will go up 1000%. ### Bob Moriarty 321gold Ltd |
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