We’re back on with Jeb Handwerger to discuss “The January effect,” and how to pick the best mining stocks. According to Jeb, gold and silver miners will rise again in 2012, and the time honored trope regarding the month of January will reign true, as the first week of the New Year shows these stocks opening on a bullish note. When asked about the best gain for 2012, Jeb says investors must look at undervalued junior mining natural resource assets–he recommends companies with strong financial positions that are progressing toward the production phase of mine development.
As you’re all aware, the Euro has been breaking into new record low levels. While many are concerned, Jeb states that there is a Golden opportunity for mining stocks emerging out of the Eurozone crisis. While many people are concerned about going into the dollar with long term treasuries, the major mining companies are looking to transfer their growing cash positions into undervalued European natural resource assets. As the Euro sinks to new lows, European capital is flowing into undervalued miners because their costs are going down, therefore driving their margins up.
As precious metals become the true base for currency, mining companies will be called upon to produce more. Demand isn’t subsiding; in fact, we’re in a bull market regarding gold and silver and will continue to until the trend has violated. Although gold finished higher for the last 11 years, Jeb really likes silver for out preforming gold in 2012. Regardless, it looks like this is going to be an up-year for gold and silver mining stocks. Stand strong–this is not a time to sell for pennies on the dollar!