It’s been a very short summer. And in a few short weeks, the rest and quiet will all be over. But it hasn’t been quiet for everyone. A company in our most recent Special Edition Report has hit yet another 52-week high. More on this story later.
Is everyone ready to get back into the market?
Right now there are many funds and investors still sitting on the sidelines. Some of them are sipping margaritas below the border, while others are busy dancing at their best friend’s wedding. Some of them are just plain cautious and doing nothing.
That`s good news. It means there is still time to grab some great discounts in the market. Of course, the easiest sector to focus on would be the undervalued large caps.
Companies like Google, Cisco, Exxon, Johnson and Johnson, and Research in Motion (we added to our position in RIM this past week) have yet to recover from the crash. These companies have billions of dollars in the bank to survive another downturn, and are all considered safe-haven stocks by many fund managers and analysts.
But even those stocks can drop if we experience another financial meltdown.
We know the markets are volatile. We know the EU is in trouble. And we know that the mid-term elections will shake things up. The democrats will do what they can to ease the pain and infuse the markets, while the republicans will be busy making things look worse than they already are.
So while there are some great discounted blue chip stocks out there, they’re certainly not a sure thing. You may have to ride them out for one, two, even three years to see any significant returns. But that’s what blue chips are all about.
The Best Bang for Your Buck
The juniors still give us the best bang for our buck.
There are many juniors waiting to explode – especially if gold continues to hold at these prices and silver continues its climb.
Sure there has been some volatility in gold prices. But these dips and swings are almost all mechanical. Many large buyers of physical metals and institutions have standing orders to buy on any technical dips. Months ago, even China admittedly touted that they would be buying gold on these dips. That’s why after every major dip, gold seems to find a way to spike right back up.
The Silver Lining
Silver should also see an upswing over the next year.
We have said it many times before, but if these precious metal prices hold, the big funds and institutions will be jumping back on board to the junior markets. When they do, we’re going to see them fly.
While on the topic of both Silver and China, Minco Silver (TSX: MSV) (OTC: MISVF), the company featured in our latest Special Report Edition, hit yet another new 52-high, trading as high as $3.75 this past week.
Remember back when junior silver stocks were getting hammered before the summer started? Minco Silver (TSX: MSV) (OTC: MISVF) was one of the few that continued to climb.
You can find our initial report on Minco Silver (TSX: MSV) here (see The Brink of Milestone) when it was trading at $2.56.
Investors and institutions have certainly been reacting to Minco Silver’s investment opportunity as share prices have been climbing since early Q1. However, events in the recent months have made Minco Silver’s story much more prominent.
Currently, Minco Silver (TSX: MSV) (OTC: MISVF) is awaiting approval of their EIA (Environmental Impact Assessment) permit.
Back on June 14, 2010, Silvercorp Metals (TSX: SVM), a silver producer and explorer in China, was issued an Environmental Permit for the GC Silver-Lead-Zinc Project from the Department of Environmental Protection of Guangdong Province, an essential document required for a mining permit application (see news release here.)
The issuance of Silvercorp Metal’s permit bodes well for Minco Silver (TSX: MSV) (OTC: MISVF) as it shows that the Chinese government in the Guangdong Province (where Minco Silver’s flagship Fuwan project lies) is being very accommodating to silver miners.
And there’s no reason they shouldn’t be.
China is now the third largest producer of silver. It also has the world’s biggest potential for silver consumption, according to Li Xiaoni, vice president of China’s Chamber of Commerce.
Remember, Minco Silver (TSX: MSV) (OTC: MISVF) has well over $20 million in the bank, a “bankable” feasibility study that shows Minco Silver is expected to produce close to $100 million in revenue and over $69 million net profit with current silver prices based on 55 million ounc
es, over 150 million ounces of silver in 43-101 resource, significant potential to expand resource, access to major highways, and coverage from major institutions such as BMO Capital Markets and Raymond James.
The Minco Silver (TSX: MSV) (OTC: MISVF) story is just beginning to heat up and we’re expecting news of their EIA permit at anytime. We’ll be sure to keep you posted on what may become one of China’s largest pure silver plays, Minco Silver (TSX: MSV).
Until next time,
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