Tuesday, June 12, 2012

Fools Gold? (G: The return of the retail investor)

Retail investors are turning to look at gold again.  Have a read of Christopher Barker's (of The Motley Fool) article "The Best-Kept Secret in Gold".  The really great thing about The Motley Fool is that they do a thorough job when they make a pick.  A fact their community knows well.

I'm tracking the shifting sentiment of retail investors searching (hoping?) for their return to equity markets.  When they do that will herald a return to the healing of stock markets. 

The retail investing community informed by The Motley Fool is sizable so take this note as an indication 'perhaps' that the return of the precious metals bull market is immanent.


The Best-Kept Secret in Gold

My investment portfolio is chock-full of names you've never heard of. That's just how I roll.

For the small minority of investors out there that actually have made room within their nest eggs for a slice of silver and gold, most will select from a small set of predictable vehicles. Many have no doubt abandoned the mining and exploration equities altogether given their dastardly trailing underperformance -- to an admittedly shocking degree -- vis-à-vis the popular bullion proxies SPDR Gold Trust (NYS: GLD) and the iShares Silver Trust.

For those intrepid souls determined to stand strong with precious metal equity exposure -- presumably sharing my bullish expectation of a major reversal of fortune once the metal prices regain their momentum -- most will likely settle upon the closest things we have to household names in the sector. Although I wholeheartedly condone the inclusion of superstars like Goldcorp and Silver Wheaton (NYS: SLW) within a well-crafted basket of gold and silver selections, I encourage Fools to dig a little deeper into this forlorn and under-followed galaxy of stocks to find their own diamond in the rough. I think I've located one particularly attractive stock that, perhaps in part because it's not listed on a major U.S. exchange, continues to fly under the radar of most U.S. investors.

The second time is a charmThis isn't the first time I've loaded up on shares of Sabina Gold and Silver (Symbol "SBB" on the Toronto Stock Exchange; "SGSVF" for U.S. investors through the OTC market). I first built a position back in 2006 as the company enjoyed terrific exploration success at a polymetallic project called Hackett River in Canada's Nunavut Province. I enjoyed a powerful multi-bagger performance before locking in gains in early 2011. Thereafter, the stock suffered a dramatic decline while the sector turned suddenly sour, and my Foolish bargain-hunting radar began to sound. As a result, I selected Sabina as one of my "Top 10 Gold Stocks for 2012."

To my amazement, the selling proceeded mercilessly into 2012, and Sabina presently sits 38% beneath where I recommended the shares last December. From its 52-week high, Sabina has tumbled 64%! Undeterred, I have continued to increase my stake, such that Sabina Gold & Silver is now a core holding of mine for the second time in this precious metal bull market. I think the second time around will be as charming as the first, and I aim to tell you why I'm so excited about the outlook.

Read full article here

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