Excert from Resource Opportunities
posted on
Sep 18, 2008 05:46PM
Producing Mines and "state-of-the-art" Mill
"Al Korelin, whose popular radio program The Korelin Economics Report is broadcast nationally in the U.S> and available online at http://www.kereport.com, noted on September 5, 2008:"Most of the current activity in this market is propelled by short-term investors who have a real need for liquidity. They are experiencing an increase in their cost of living, they are unable to generate cash from their homes, some of them are losing their jobs and, as a group, they are selling whatever stocks they can regardless of their respective prices."
Scott Hunter, a broker at Haywood Securities, who has worked in this industry his entire career commented: "We are seeing frustration selling into a market with no bids. Patient investors will be well rewarded if they take advantage of this weakness in the market. They should have a short list of good companies with underlying value and wait for the right price." Scott warns of the potential for further weakness from tax-loss selling, but also notes that a lot of the tax-loss selling that would normally occur closer to year-end has already taken place.
In a recent interview, Doug Casey, editor of the widely read Casey Report, said: "I think it is very much like what happened from 1974-1976 during the last great bull market when these stocks melted down 50, 60, 70%, but that was just a prelude to the explosion that happened from '76 to 80 when they subsequently went 10, 20, 30 times in price. I think that's what is going to happen now." In Casey's September newsletter, he went on to say, "If your cash for speculative investments is not fully committed, back up the truck for the spectacular deals available right now. Don't worry about whether or not the market has bottomed (though we suspect it has). There are some screaming Best Buys out there."
Jim Dines, of the well-known Dines Letter, has said: "Howlow will these stocks go? Until all those who are frightened complete their selling and are afraid to repurchase."
Eric and David Coffin, authors of the acclaimed Hard Rock Analyst publication, at the end of August said: "The big issue now is that assets are not being valued by the markets... we suspect the 'sudden oversupply' of metal people are worried about, especially on the base metal side, will disappear quicker than the pessimists expect... Right now the market focus is on cash flow and near cash flow companies, and even these are weakly priced to potential. ...this is not the time to be selling in frustration and fear. Fall is, on average, the best season for resource stocks. Fall is near so we will wait this out and try to be ready to be able to bargain hunt with confidence at a bottom that we hope will not be long in arriving."