Joel’s [extra long] Endnote: With gold down again (it’s around $785 as we write to you this morning) bargains abound. The question, as always, is how you can best play the discounted price. Strategies will vary from investor to investor depending on how much you have to allocate and what your ultimate goals are.

With that in mind, we asked our resident gold guru, Ed Bugos, where he reckons the best plays are.

“Try adding a few junior miners,” he advises us. “That’s my main business over at Gold & Options Trader. First off, let me direct you to look for takeover targets.

“The valuation gap between the majors and juniors is at historical extremes. The majors need to add reserves to justify expensive share values based on the market’s expectations of growth in production and cash flows. Usually, these takeover waves occur during corrections in the gold price.

“Junior miners, generally, do best when risk premiums fall, stocks rally and gold flies, or if a major metal or diamond discovery fuels an exploration boom. But there is also another time when they do well: When they have been so beaten up that their well-healed competition starts gobbling them up. Takeovers tend to channel liquidity from the big company’s treasuries into the hands of investors more interested in finding the next Fruta del Norte or Bruce Channel discovery than investing in something secure.

“My criteria are simple. Good management isn’t a prerequisite; it’s an obstacle to takeovers. The main thing:

“The asset has to be in a politically stable environment or have enough ounces proven to make the extra risk worthwhile. A minimum of 5 million ounces in a measured and indicated resource is another criterion. Open-pit deposits are preferable.

“My research tells me gold prices are set to double over the next year. My forecast is for gold to reach $1,200 by year-end and $2,000 by next summer. The time is nigh to take advantage of this opportunity.”

Although their strategies differ somewhat, both Ed and Byron recommend specific plays on gold to help their readers better invest in their favorite precious metal.

In his Outstanding Investments newsletter, Byron devotes about one quarter of his portfolio to precious metal stocks. You can pick up a one year subscription for about the price of dinner for two and it’s a great place to start if you’re interested in getting your feet wet in the gold markets. To learn more, check out his popular “Gold $2,000″ Report

For his part, Ed specializes entirely in gold. His research service, Gold & Options Trader, covers everything from options plays, junior miners, long- and short-term trend analysis as well as general commentary on the metal. His service is a bit more expensive and probably better suited to the more “hardcore” gold bugs. To learn more about Ed’s service, check out his special report on how to use “Vancouver Leapers” to supercharge your profit potential right here

As we said, your investment approach will depend on your own individual circumstances and goals. Byron’s Outstanding Investments and Ed’s Gold & Options Trader are just two tools you may wish to use to help you invest more wisely in gold. We hope you find something to your liking in either one or both of them.

Until next time…

Cheers,

Joel Bowman

The Rude Awakening