Masters Series: Gold Stocks Have NEVER Been This Cheap
Editor's note: Gold stocks are cheap and hated... and beginning an uptrend.
Today's edition of our weekend Masters Series comes from a brand-new True Wealth Systems report. In it, Steve Sjuggerud puts gold-stock valuations into historical context to show why they're cheaper than ever, and why they're poised for massive returns starting now...
Gold Stocks Have NEVER Been This Cheap
By Steve Sjuggerud, editor, True Wealth Systems
995% returns...
That's what's possible when you buy "golden lottery tickets" at the right time. And it's the gain my readers experienced from the top-performing recommendation of my career.
I made the recommendation a decade ago. And today, we have an even better opportunity to make a nearly identical investment.
I can't guarantee 995% gains. But I can tell you that this is an even better opportunity than what I saw back in 2005. I wouldn't be surprised to see hundreds-of-percent gains in the coming years.
You see, in July 2005, I recommended three small gold stocks in my high-priced, speculative newsletter called Sjuggerud Confidential. (That letter was a predecessor to True Wealth Systems... without the systems.)
At the time, gold-exploration companies were dirt-cheap and completely ignored. Nobody wanted anything to do with them.
You've got to remember, the price of gold in mid-2005 was around $425 an ounce... To put that in perspective, the price of gold was down 50% from its highs 25 years earlier! Why on earth would anyone invest in a gold-exploration company in 2005?
I'm a contrarian investor... I look for what nobody else wants. By 2005 I was already buying gold and gold coins in my True Wealth newsletter. Gold had bottomed and was moving up. So I started looking into the gold plays with more upside potential – like exploration companies.
I wanted to find three gold companies with massive hoards of gold in the ground. I wanted to find three "golden lottery tickets" that never expired... They just needed the price of gold to go up.
So in July 2005, I recommended three gold-exploration companies to my subscribers.
As I wrote then, "the thing about buying tiny gold stocks is, you really shouldn't buy just one." You want to spread your risk, as some will soar, and some will crash. I stand by that advice today.
As you know, the price of gold soared over the next few years. Two of my recommendations turned out to be home runs – you would have more than doubled your money on both of them following my advice.
With the top performer, we pocketed 995% profits. It turned out to be the best-performing stock recommendation of my career so far. The third stock didn't turn out so well... the company was taken over by the Venezuelan government and basically went to zero.
But because we spread our risk out across three stocks, we made extraordinary returns.
Today, we're taking advantage of a similar opportunity in the gold-hoarding sector. We could easily see hundreds-of-percent returns, or more. Because today's opportunity is even better than back in 2005.
Here's why...
Today's Opportunity is Better Than When I Recommended a 995% Winner
Gold-exploration companies have been decimated over the past four years. They're down nearly 90% since April 2011. Take a look...
After a crash like that, gold explorers are cheaper today than they were in 2005 (based on how much gold you control when you buy a share of their stock). And they're more hated than I can ever remember. Nobody wants anything to do with them.
The bigger picture in gold stocks is similar...
This next chart is a ratio of a gold-stock index to the price of gold. Today, you can see that this ratio is at all-time lows...
The only time this ratio has been this low in the past was in late 2000 – and gold stocks soared by 300% in the two years after that.
So today, we're following the same blueprint from 2005. In True Wealth Systems, we are buying three "golden lottery tickets" with huge hoards of gold in the ground. We plan on holding them for three years. They all offer us maximum leverage to the price of gold. So if gold goes up, they will go up a lot.
Good investing,
Steve Sjuggerud
Editor's note: Steve just published a brand-new presentation detailing the opportunity he sees in gold stocks today. As he explains, the risk-to-reward setup today is setting early investors up for huge gains. If gold prices rise just 10%, these stocks could easily rise 100%... or more.
Learn more about this opportunity – and why Steve is making a big bet on gold stocks with his own personal money – by clicking here.