The last few days I have been searching the market for stocks to re-invest the profits I have taken recently.
What have I found?
Well, nothing that is blatantly cheap!
I think the safest way to play this bull market, is to buy things that appear cheap, with a lot of immediate upside potential. Past examples include:
- Timmins Gold 2 months from production commencement, trading at 2x projected cash flow (oct 09)
- Avion Gold trading at 4.5x cash flow, while quickly developing projects to more than double production by 2012. (jun 10)
- Great Panther Silver trading at 4x – 4.5x cash flow, increasing reserves, with silver looking ready to break out. (aug 10)
And most recently, Carpathian Gold.
Generally, you find these deals on broad market weakness. By the way, I say ‘deals’, because that’s the way I look at these companies, kind of like how a property developer might look at a property. Make your money on the way in!
goldstocktrader 
Great article! Especially the good call on Timmins. It went another 7% up today, do you think it’s too late to get in now?
I look forward to seeing PART 2.
Cloud
Although I think there’s still value, the longer something has been rallying for, the greater the probabillity of the price reversing. So buying right now, is a lot more riskier than if you brought a few weeks ago below $2. All depends on your risk tolerance.
You could try waiting until early next year as Capital Gold shareholders will meet to vote on the Gammon merger. I think they will reject it. If this is the case, I expect Timmins share price to start tanking, as they will most certainly try for a merger with Capital again.
This is good because if Timmins offer gets rejected again, then Timmins share price should shoot back up.
If it is accepted, then the business combination with their large combined cash flow, will grow into a much larger company. I would envision a multi-billion dollar company within a few years.
Thanks for your suggestions on Timmins, Jas! I will keep my eyes on it.
I spent some time to check your CPN last night. I noticed this company before but didn’t get any chance to do any research on it. It looks very promising and then I got my initial position at 0.69 this morning.
Hi Jas,
Any comments on the recent move of CPN?
Happy investing in the new year!
Regards,
Cloud
Not really. Gold stocks have been falling most of the week. CPN is not an exception. I would like it to fall much further before adding more.
Jas
P.s – I hope to update this blog in the next day or two.