Good As Gold

Since posting my first Bull Market Letter on Nintendo Co. Ltd. ADR – Q:NTDOY on Feb. 20, 2017, the share price has gone from $25.67 (U.S.) per share to a recent high of $30.96 (U.S.) per share, an increase of 19% in 30 business days.

The retail reaction to the new Nintendo Switch console has been what I have predicted, a feeding frenzy. See this link to Best Buy that shows you that you still cannot order it online or reserve it.

https://www.bestbuy.ca/en-ca/product/nintendo-switch-nintendo-switch-with-gray-joy-con-misc/10381161.aspx

My prediction is that Nintendo will have significant financial statements forthcoming. I presume they will eventually offer an upgraded Switch console like a PS4 pro and Xbox One S, which will lead to more sales. As I said in my previous newsletter, Nintendo provides an entire different variety of games than PS4 or Xbox One, which will attract people of all ages. Nintendo is still something I would have a close look at, with an investment window of six months to one year.

Good as Gold
Z:GDXJ – VanEck Vectors Junior Gold Miners ETF

Working in the capital markets and mining industry, I am always in conversation with investors, constantly reading other analyst and newsletter writer reports as well as watching the news/social media and the old colour picture box to get the buzz of the markets.

The sense that I am getting across the board is that people believe gold is entering another bull market cycle that could last anywhere from three to five years. I keep hearing above $2,400 (U.S.) per ounce within five years. Some people think we will see $5,000 (U.S.) to $10,000 (U.S.) per ounce and feel that it’s all completely rigged and world will collapse, etc. I don’t believe every conspiracy theory, but to me one thing is certain, gold is a real, finite, historic material of power and wealth, and has only gone up in value over time.  Our population continues to grow, banks print money and people are finding mines that are lesser quality than predecessors.

I think the best way to look at a gold stock and to get more leverage with the price of gold moving up is to look at something like Z:GDXJ – VanEck Vectors Junior Gold Miners ETF, which is a basket of gold junior producers. Having an ETF (exchange traded fund) that consists of a basket of gold junior producers vastly reduces the risk of just buying one if something happens and the company goes belly up.

On the way to gold bullion going to $1,900 (U.S.) per ounce, Z:GDXJ went to $179.44 (U.S.) per share.  In the first quarter of 2016, Z: GDXJ went to a low of $16.87 (U.S.) per share, about the same time gold hit $1,054 (U.S.) per ounce in December, 2015.

Since that time, at current prices, gold has made an impressive move of about $200 (U.S.) per ounce from $1,054 (U.S.) to $1,251 (U.S.) per ounce, and had a 52-week high of $1,370 (U.S.) per ounce in July, 2016. At the same time, Z:GDXJ hit $52.50 (U.S.) in August, 2016.

Now, historically we know that gold typically isn’t in a bear market cycle for more then five years, which we saw from 2011 to 2016. We can see that gold has moved up as high as $320 (U.S.) within the last 15 months, which has resulted in all gold mining stocks to surge and increase in value.

If you believe as I do that gold is going much higher within the next three to five years, then looking at Z:GDXJ at $35.98(U.S.) per share currently may be a golden opportunity with a two- to three-year investment window to stay safe and lock in potential profits.

In the short term (two months), it is hard to tell if gold is ready for the next big leg up or will retest $1,200.00 (U.S.) per ounce, but It is safe to say that gold appears to be in the beginning of gold bull market cycle and Z:GDXJ has become, once again, an attractive opportunity to invest and leverage our capital into, with a basket of gold junior producers, all while reducing the risk of putting all your eggs into one producer.

I believe Z:GDXJ deserves your immediate attention.

See below a 10-year chart on Z:GDXJ and Gold Bullion for your review (charts from www.stockwatch.com and www.kitco.com).

Alex Horsley
Founder and Editor
Bull Market Letter
(604)618.3058
alex@bullmarketletter.com

Mr. Horsley does not own Z:GDXJ or Q:NTDOY shares. He is not an employee of those companies and this is not a paid advertisement. The information received is for their personal use. Investing involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. Nothing contained herein should be construed as a warranty of investment results or advice. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. All information provided or contained in this communication should not be reproduced, copied, redistributed, transferred, or sold without the prior written consent of the sender. This communication including any information transmitted with it is intended only for the use of the addressees and is confidential. If you are not an intended recipient or responsible for delivering the message to an intended recipient, any review, disclosure, conversion to hard copy, dissemination, reproduction or other use of any part of this communication is strictly prohibited, as is the taking or omitting of any action in reliance upon this communication. If you receive this communication in error or without authorization please notify us immediately by return e-mail or otherwise and permanently delete the entire communication from any computer, disk drive, or other storage medium.

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