In this issue
Whether you are
a current
subscriber to
our services or
just on our
mailing list, it
is always
exciting to see
the power that
warrants can add
to your
portfolio. With
the markets
selling off, we
have a great
opportunity to
establish some
positions at
reduced prices.
(I am leaving
our commentary
issued last week
below discussing
Penny Stocks,
but I want to
put this into
perspective with
a live example
of a Penny Stock
and better yet,
a Penny Stock
with a warrant
trading.)
Colossus
Minerals is
a Canadian
junior miner
looking to
explore and
develop gold
properties in
Brazil. The
symbol is
CSI:TSX and has
been a great
performer over
the last 12
months. Any
investor would
have been
excited and
proud to have
owned the common
shares which
soared to a
1,188% gain over
the last 12
months but look
at the warrant
(see below).
The warrant on
CSI:TSX has an
exercise price
of $2.00 and
expired on 13
Feb 2011.
We are not
recommending you
to go out and
buy this warrant
as this is
merely an
example of the
power of
leverage and the
use of warrants.
If you had
purchased the
warrant 12
months ago, it
would have had
well over 2
years of
remaining life
before
expiration and
thus met our
definition of a
'long-term'
warrant.
Prices
as of 4-Dec
% Gain
12
Month High
12 Month
Low
Common Shares $5.54
1,188%
$6.35
$0.43
Warrants $3.61
1,705%
$4.30
$0.20
Leverage
1.44
Whether you had
purchased the
common shares or
the warrants you
should be very
happy but the
above facts
prove that
the warrants out
performed
the common by
roughly 50% with
a leverage of
1.44.
Many times we
will see the
leverage at 2.0
or better but
this is nothing
to sneeze at
with these gains
in the warrants
of 1705%.
Penny Stocks
Have you ever
wanted to have
the opportunity
to make a lot of
money? How about
getting rich?
How about
getting Filthy
Rich? If so,
you must read
this.
Everyone has
heard the term,
penny stocks,
but what are
they? Should you
consider
investing in
them?
The general
definition of a
penny stock
would be any
stock trading
under $1.00.
With the
thousands of
Canadian junior
mining and
energy companies
I would guess
that 80% are
still selling
for less than
$1.00 and thus
are classified
as penny stocks
selling on the
TSX Venture
Exchange.
If we were at
any other time
in the
investment cycle
for gold and
natural
resources I
would probably
suggest that
investors stay
away, far away,
from these penny
stocks, unless
you really know
what you are
doing. But that
is not the
case.
We are on the
verge of a
possible
breakout in the
shares of these
penny stocks and
some of us have
been licking our
chops in
anticipation and
now it is
here.
Doug Casey
of
CaseyResearch.com
is very bullish
on the prospects
for the juniors
and is on record
as saying:
”the day will
come when no
shares will be
selling for less
than $5.00”
Again, I am
guessing here
that the average
junior mining
and energy
company is
selling for much
less than $1,
probably more
like $0.25 to
$0.50. Well if
Doug Casey is
right we could
easily see these
penny stocks
generating gains
of 1,000% to
2,000% in
the coming
years.
Remember, this
will be the
average share
price even for
those dogs and
cats in your
portfolio. Many
shares will be
selling for $10,
$20, $50 or $100
and more……It
happened in 1980
and it will
happen again.
Think for a
moment about the
last great bull
market in gold
and the juniors,
1976 to 1980.
Heck no one
had computers
and no one
was day trading
this very small
market sector of
the junior
mining and
energy
companies. What
if, this time,
investors around
the world really
get excited
about these
mining and
energy stocks?
The sky is the
limit and want
it be fun?
Frankly, we
smell the
potential for a
major once in
a life-time
opportunity
to make a
killing.
Are these penny
stocks risky?
Sure as heck
they can be
risky, but if
you only
allocate a
portion of your
investment
dollars to this
group and then
further
diversify into
10, 20 or 30
different
companies, you
are greatly
reducing your
overall risk
exposure. It
is all about
timing and
the time is now
to be preparing
your strategy if
you are not yet
on board.
Another
interesting
thought
is that some of
the junior and
energy shares
have
long-term
warrants
trading which
will increase
your gains even
further with
little or no
additional risk.
Think about
those long-term
warrants giving
you the right to
buy the
underlying
common shares at
a specific price
and expiring
2 years or more
in the future.
These long-term
warrants give
you the
opportunity
to double or
better your
already
outrageous gains
in the common
shares.
This is a must
opportunity for
all investors
and I am sure
that all
investors will
be ‘in the game’
eventually.
The question for
each of you is:
1. Are you
already in the
game? If so,
great, just be
patient.
2. If not, are
you preparing to
enter ‘the game’
and buy a basket
of these
undervalued
junior mining or
energy shares or
the long-term
warrants trading
on them?
3. Are you going
to wait until
prices rise
substantially
and start to
peak before
entering ‘the
game’?
We already know
the answer don't
we, that most
investors will
wait and
wait and
wait and
then buy near
the top and then
complain that
they couldn’t
make any money
and they will
blame the
markets, the
penny stocks and
everyone in the
business before
taking
responsibility
for their own
poor judgment
and timing.
We are being
given the rare
possibility of a
once-in-a-lifetime-opportunity,
what will you
do with it?
. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For those
readers and
subscribers
unfamiliar with
all of our
services:
•
PreciousMetalsWarrants.com
provides an
online database
for all warrants
trading on the
natural resource
companies in the
United States
and Canada.
•
InsidersInsights.com
tracks the
buying and
selling of
corporate
insiders with a
focus on the
junior mining
and natural
resource
sectors. Buy and
Sell Alerts are
issued as deemed
relevant based
upon our
analysis.
There are many
great
opportunities
presented in
each of these
services and we
encourage you to
get on board
with us soon.
Dudley
Dudley Pierce Baker - Owner/Editor - Guadalajara/Ajijic, Mexico
Lorimer Wilson - Director of Marketing and Contributing Editor - Toronto, Canada
Bruce Ross - Webmaster and Administrative Assistant - Phoenix, USA
