“Nice” post DT! 😉

Yeah, agreed, there have already been some very nice re-ratings starting in a number of precious metals and even base metals stocks since Q4 of last year, (most of them off lows marked in September).

It has been encouraging to see a number of companies (and my trading account portfolio balance) clawing it’s way higher once again over the last few months.

Personally, I was aggressively deploying the rest of my dry powder in July, then trimmed a bit of the rally gains in August, then redeployed those funds back into mostly PM stocks in September/October.

So my strategy was to get positioned for 2023 earlier than I typically would, because of the thesis that most of the tax loss selling was occurring in the summer and early fall. I mentioned to a number of folks we bring on the show, both off-mic and on-mic, that I felt most of the tax loss selling was already over for the year far before the holidays, and that those expecting some big waterfall decline into year end were likely playing it wrong.

As a result, I didn’t do as much trading in later Oct/Nov/Dec as typical, and actually sold some of the bigger gainers in early December to take the gains and wash them out against other losses for the year for tax neutralization purposes. (I did get repositioned in those stocks again in early January with some initial tranches, starting up a new cost basis in those, and will add more to them on any pullbacks from here).

Bottom line: Since most of the lows in the mining stocks were in either July or September, my strategy and messaging on deploying my remaining cash and dry powder then, (when many were boasting about shoring up record amounts of cash during those periods) was the right assessment of the set up.

November & December are the typical tax loss selling season, and as postulated, they were not dire sell offs where the miners were ground to a fine dust…. but instead a period of rip-roaring higher prices across the sector in most of the more widely followed quality mid-tiers, and juniors.

Those that didn’t buy into the weakness from July through September, at the clearly comical valuations we were seeing in the PM mining stocks, months before traditional tax loss selling, missed a great opportunity for easy appreciations of double-digits or triple-digit gains in many stocks. Instead, what we saw posted on here, or heard from some of show guests, and what we saw on many other sector forums were retail investors that were cowering in cash instead of deploying their cash…. or worse, some of the more vocal contrarian indicators were selling to go to cash in (Sept/Oct). They chose very poorly.

Just like always, most investors abhor buying low, and few have the discipline to sell high. Instead most investors like to buy high, and cry low. Some things never change…

There’s a rising fork support that has held since November in addition to a falling fork support that has held for the last month.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=0&dy=0&id=p76347962172&a=1316394969

Here are 8 other silver Juniors I hold in my portfolio, and while they’ve not been exploding higher, the clear direction has still been trending higher in the silver stocks.

https://stockcharts.com/freecharts/candleglance.html?BRC.V,SLVR.V,DV.V,VZLA.V,IPT.V,DSV.V,DEF.V,SIL.TO|B|null

Good call CaliJoe, and good point on it respecting that lower trend-line. Eventually, First Majestic will break out and play catch up to the rest of the space, and as a more liquid stock on the big board exchanges, when other investors see that, it may turn into a good momentum trade. Actually it has a more compelling set up now because it hasn’t moved as much as other stocks have in the last few months rally.

I just figured they’d have a few challenges holding them back (still working out tax issues with Mexico, labor issues and local pushback in Mexico, a few operational challenges at Jerritt Canyon to work through, etc…) However, if they can get all their pistons firing together in 2023, they still could make a solid comeback and move much higher.

The point I was trying to get across to the SilverChartist blog folks, when they were bemoaning the performance of First Majestic as their primary exposure to the silver stocks, was that it is always dangerous to extrapolate out the moves of just one company, to the whole sector. Clearly AG did not move like the rest of the sector over the last few months.

It is also the danger in having an overly concentrated position in just 1 or 2 mining stocks. As most know, mining is a tough business, and there are all kinds of problems that can befall even well-run companies, so it is best to have a basket of stocks and build one’s own diversified ETF. (diversified by jurisdiction, stage of mining, and on best in class and also best of the worst for the optionality factor).

There were a few different people commenting on that S.C. blog that they only had First Majestic for their exposure to silver producers, or AG and one other stock. That is a very risky position to take in one’s portfolio (more risky than many of them likely realize), because it leaves all performance to just 1 or 2 companies and management teams. Chit happens… and it sucks to see a nice sector move and then see the one stock or one of the only stocks one holds not participating (like what we just saw the last few months in AG).

I’m always amazed, during turns off the bottom in the PM sector, that more investors are not loading up on a basket of the mid-tier and smaller producers, and larger developers, as they are going to be the sure movers in any new uptrend, able to monetize or show better economics on the improving metals prices. With a basket approach, people can still weight some heavier than others, or take a balance approach, and trim back the gains in the bigger winners to then deploy into the smaller juniors for the next phase of the bull market, as it develops.

Not surprisingly, most of the biggest griping we’ve seen the last few months, are from folks positioned in very early stage PM explorers that haven’t really moved much, or worse that moved down, when the rest of the sector was ripping. Those companies don’t have proven ounces in the ground yet, so there is nothing worse than being in a silver or gold bull market move, and holding a company that doesn’t actually have any defined silver or gold yet.

If people want to use one ticker to track the silver mining stocks, or just hold one position, then they’d be far better served just to use SILJ as their proxy. It’s a well-diversified basked of silver stocks and a much better representation of how the sector overall is performing.

Metallica merged with Peak Gold to form New Gold in 2008.

God Bless you Wolfster!

Your listening skills are deteriorating because you haven’t used them for a long time! LOL! DT

Nice Wolfster. We appreciate you listening to the show mate, and for all the good contributions over the years. There are a bunch of folks over at ceo.ca pretty excited to see a few of the Metla holes, so we’ll see how it goes when they get released to the market.