Top 10 Reasons Why You Shouldn't Invest In Mining Stocks | The ...

The Daily Gold Newsletter

Enter Your Email to Receive Updates:

Your Privacy is SAFE

In consideration of the once profitable mining sector?here are the top ten reasons why you should avoid mining stocks at all costs?

1. They Go Down ? Owning an investment or asset that goes down in value is not the type of situation we want to find ourselves in, or become accustomed too. For example, if you wake up one morning (or any morning for that matter), you will see that your mining stocks are down 25%?leaving you with only 75% of your asset. That 25% literally, got up and walked away.?However, if you wake up in the morning with a gold coin in your hand, it will be the same size and weight as the night before?not 25% ?lighter? as in the case of mining shares.

2. Nationalization of Mines - Every government in the world today is minutes away from seizing all natural resource assets(whether they know it or not), including the US, Australia, and especially Canada. There are lots of industries that represent safer risks, ones that governments will not negatively interfere with?such as insurance, banking, and the auto sector.

3. It?s Just Paper ? Despite the fact that many individuals and funds claim to be making millions (and sometimes billions) investing in and building public mining companies, it?s all just a paper game. At some point, the entire paper money and global finance system will freeze up, reset, and all paper assets will become worthless. Remember?if it?s not small enough to fit in your hand and hold, you don?t own it (that includes your house).

4. Manipulation ? It?s common knowledge that the US Federal Reserve and Global Central Banks, are actively shorting and suppressing gold and silver mining stocks. It works very simply?your stock broker sends a monthly financial report to the US Fed which details your mining stock holdings, and then they go to work. They short what you own, just long enough to induce you to sell. Once you?ve sold the position, it gets updated in the broker?s system, and the Fed covers its short positions?and in doing so, drives back up the price of the stock. Unbelievable.

5. They Don?t Go Up With Gold ? Anyone who?s invested in mining shares in the last few years knows that they no longer track the price of the metals. If you want proof of this, simply look at a chart of the GDX compared to gold going back to 2008. Up until that time, the miners outperformed the metals?but those times are history, and due to the reasons on this list, they will not return. Many people say they?re undervalued, and will snap up in price?yatta, yatta. This time it?s different.

6. They?re At Historical Lows and Going Lower ? Compared against the metals, mining shares are at their lowest levels in nearly 30 years. A 100 year old man was mumbling recently about this, but again, when we look at the performance of the shares since 2008 (included with the other items mentioned on this list), it?s quite clear the shares are going to go much, much lower.?When an asset is at or near an all-time historical low, that usually means it?s going to go lower. Much lower.

7. The Charts Look Horrible ? When looking at the following chart and applying directional technical analysis, we can see that the overlying trend is pointing down. As all great investors say, ?The trend is your friend??we must respect the trend, and understand (as proven by the arrow) that it?s pointing down.

8. They Have Not Confirmed Themselves - One of the best strategies to keep in mind before we even consider investing in the mining sector (haha, fat chance, I know), is to wait for the shares to move higher and break to new highs to confirm that they?re going to go higher in the future. If they can prove they?re going higher, by first going higher?then we know that they?re?actually?going to go higher. At that point we can go all in?and possibly with a little leverage to sweeten up the deal. After all, the new trend will have proven itself to be in place at that point.

9. George Soros Is Getting Involved - By our higher moral and ethical code, we cannot be involved with any investment that George gets his grubby capitalist hands on. This includes mining shares. He has recently invested hundreds of millions in the GLD and the GDX (a portion of which is in call options), and we simply cannot be aboard any ship he sets his foot on, even if that ship is a luxury yacht. Cork the wine, throw the champagne overboard, the party?s over. George is here. We can either sell him our shares, or even short some, while giving him and the Soros Fund Management team the other side of the positions. Besides, clever old George is only holding paper, and as we all know, it?ll be worthless as soon as the yacht makes it out of port.

10. Societal Collapse ? When society ultimately collapses(due to war, peak oil, hyperinflation, famine, disease, Katy Perry, etc.?there?s too many things [and people] to mention here), the only value mining shares will offer, is in the utility of being taped together into a roll and hung in the bathroom. At that point, items of value will include canned goods, hunting weapons (the outdoors will be a great source of food), a dry place to sleep?and of course, beef jerky.

Reflection

If we allow logic to be our guide in the marketplace at this point in time, it would behoove ourselves to divest of mining shares, and accumulate canned food, bows, arrows, pocket knives, and a high quality beef jerky (Slim-jims will suffice if nothing else). A forest cabin with double-locked doors would also offer utility.

As John Wayne once said, ?Life?s hard. It?s even harder when you?re stupid??so let us not fall prey to the mining share promoters and pranksters, who assure us this is a once in a lifetime opportunity to invest in the precious metals mining sector.

All the best,
Tekoa Da Silva

Source: http://thedailygold.com/top-10-reasons-why-you-shouldnt-invest-in-mining-stocks/

Snoop Lion London 2012 Table Tennis badminton Dominique Dawes Gabby Olympic Gymnast Robyn Lawley Gore Vidal