Important update to yesterdays blog

Yesterday I posted some market tips that I feel will be good long term investments. I want to reaffirm those positions in this blog and at the same time suggest that my followers buy the dip in the market on all of the mining stocks mentioned. Both the equities markets and the precious metals markets suffered losses today. The DOW was trading higher for a large portion of the day before sentiment turned negative and the market which was up around 30 points at one point closed down 73 points.

Gold traded down about 2% and this hammered Barrick Gold which finished down about 5% for the day. I am expecting similar percentage corrections in the Australian metal stocks Newcrest Mining (NCM) ,  Silverlake Resources (SLR) and Cobar Consolidated Resources (CCU). I have written this updated blog today to suggest that if you invested yesterday you should increase your holding by at least 50% today after the market resets downward. As I stated in yesterdays blog trading within current market conditions is more a game of risk management than it is profiteering.

My blog yesterday also suggested that cash be held in reserves for when opportunities present themselves and it has not taken long for that to happen. Newcrest Mining Could go below $10 today and Silverlake Resources could retreat to 74c. Both are a gift at those prices and even at yesterdays closing prices of $10.30 and 77c they are still a STRONG buy for me. Do not fear the dip in price, BUY the dip, average down and reap the rewards when the bounce happens. Nothing has changed but the price of Gold and Silver.

One thing I have learned watching the precious metals sector is that trying to predict daily or even weekly movements in precious metals prices can be a road to ruin.

When I began studying Gold, Silver and the mining stocks that produce these metals I thought I could predict the weekly if not daily moves in the metals prices. It is truly crazy to think that you can predict, with any degree of certainty the short term move in the metals.

My approach now, is to price the market in terms of downward risk and upward reward. Sure, at times I find myself reverting back to old habits that trigger an emotional feel for what I see happening in the short term, but my final consideration is the risk reward trade off long term. So perhaps readers might be assessing my precious metals tip of silver at $24.50 within 2 weeks to be now dead in the water. If you are thinking that, you would be repeating my mistake where the trigger for a short term market prediction is based on an educated yet tainted emotional feel.

Right now I would say exposure to the equities market should be limited in scope and concentrated in specific targeted market segments that have been battered and offer more potential upside and sustainable organic growth. BUY BUY BUY the dips in these quality stocks, bring your average cost per share down and reap the rewards when the stocks bounce. Make no mistake, Barrick Gold (ABX), Newcrest Mining (NCM), Silverlake Resources (SLR) and Cobar Consolidated Resources (CCU) all have major upside. ABX, NCM and SLR are financially sound and if you can afford to buy more when these stocks fall today buy some!

My advice would be to double down if you can, it will average your cost per share down and magnify the upside when it comes. These are all great long term investments with a huge short term upside if that is the way you wish to explore them. When I say short term I mean with a 6 month outlook.

Cheers for your support!

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