To be a successful investor, it is necessary to have a fundamental understanding of the philosophy that drives the stock market. The mass psychology of human nature is the biggest single factor you must comprehend if you expect to trade profitably on a consistent basis. This emotional and psychological ingredient has absolutely nothing to do with the state of the economy, but it does have an overwhelming affect on the movement of the market.

The first unwritten rule is that rumors are the prime movers of the stock market. It’s amazing how quickly speculation of upcoming events can change the character of the current trend. In recent weeks, just the mention of inflation causes investors to rush for the exits in order to dump their holdings. This type of activity will often precipitate a general market decline long before the economy actually changes into that state or condition. The market anticipates the movement of the economy and shows us in advance what we can expect with regard to corporate health, unemployment, interest rates and other financial trends. It is also said that a crash in the market is foretold by events that are mostly psychological, not economic.

When investors and analysts begin to discuss bearish trends, the market generally reacts negatively because the public believes it is destined for a downturn. In contrast, when a major financial report is rumored as favorable, the market erupts far in advance of the actual announcement.

The most important underlying factor is the power of human nature on the movement of stocks and other investment vehicles. When you understand the changes produced by emotional factors, you can begin to discern the broader, more technical movements in the market. The key is to avoid the impulse to buy at the height of the rally just because the market is up and everyone is talking about their successes. Learn to trade on your own terms, not the market’s.

(Ed Note” Brief comments on Gold, Stocks and Oil from Today’s VR Gold Letter and VR Trader.

GOLD – The Annual Forecast Model correctly predicted a high point for Gold in the
current time frame, but the unanswered question is whether the September 17
high at 1025.10 was the fulfillment of that forecast.

STOCKS – Bearish sentiment grows as we enter October. In truth technicals topped out in September, but I originally lightened up ahead of Rosh Hashana on September 16 anticipating a retracement….

OIL –  fell Friday on the weak employment report, but also on news that Russia is producing record amounts of oil. Crude oil settled down 0.87 at 69.95. Russia produced more than 10 million barrels per day of crude oil in September, setting a new monthly record, Reuters reported Friday, citing data from the Energy Ministry in Moscow. Russian production rose 0.4% to 10.01 million barrels per day in September from the 9.97 million barrels per day produced in August, the report said. In late August, state-controlled oil giant Rosneft started commercial production of crude oil at the Vankor field in the Arctic, helping boost Russian oil production in September, according to the report.

Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

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Marks VRTrader Silver Newletter covers Stock, TSE Stocks, Bonds, Gold, Base Metals, Uranium, Oil and the US Dollar.

More kudos – Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!
For a trial Subscription of The VR Silver Newsletter covering Stocks, Bonds, Gold, US Dollar, Oil CLICK HERE

From Yesterday’s article: HERE

“President Obama promises to cut spending in the US. But can he? Read this column out of Forbes by Bruce Bartlett, former Treasury Dept. economist — “Whenever I write about the federal deficit, some nitwit always demands to know why we don’t just cut spending,” says Bruce Bartlett. “Here is the simple, if unsatisfying, answer. We can’t. Nearly two-thirds of spending — 62% is mandatory, entitlements and interest on the debt. The defense budget — which will never be cut substantially, — consumes more than half of what remains, leaving a total of $485 billion for everything else. Given a deficit of $459 billion last year, a balanced budget would require the elimination of virtually every single domestic program, including all social programs, education, highways, border patrols, air traffic control, and the FBI. The only alternative is to reduce mandatory spending on Medicare and Social Security — and good luck with that. The elderly will fight anyone who tries to cut their benefits, even as they hypocritically demand fiscal responsibility. And seniors’ political power will only get stronger, as baby boomers get old. Face it, if the US ever stops running a deficit, it won’t be because Congress made massive cuts in federal spending. The votes aren’t there, and never will be.”

The following is a checklist of some of the things I think should be carefully considered when assessing Junior Mining Exploration Stocks.

1.    Analyze prior promises: be extremely hardheaded and cynical in your assessment of your current and prospective Junior Mining investments. Critically analyze prior management promises against actual performance. In this regard, we suggest you focus on the track record of the Board and Management in raising money through private placements or prospectus offerings and converting those equity raises into NI 43-101 Resources or Reserves believed to have a chance of commercial exploitation – or better yet, have a track record of developing Resources or Reserves and selling them to 3rd party producers.  You can find (subject to the extent of a given company’s disclosure) some of this information in the Management Discussion & Analysis write-ups found in the Corporate Filings data component on each company page in StockResearchPortal.com (‘SRP.com’).  I also suggest you speak directly with the President of each company, and canvas with him/her the prior experience and success of both the Board and Management team of their respective companies.  I have yet to find a company President who was not receptive to speaking directly with shareholders.  Please let me know by e-mail (at info@stockresearchportal.com) whether your experience in speaking with company Presidents is the same or different than mine.

2.    Cash on hand: recognize that ‘cash really is king’, and that has never been more true than in today’s economic environment. Look for companies with enough net cash on hand (cash and equivalents less existing debt) to complete a meaningful exploration program on a promising property(ies), or to further prove up existing NI 43-101 Resources or Reserves. Both my personal experience and antidotal evidence has convinced me that companies with only limited cash or without cash continue to find it difficult to raise new equity, and if they are able tot raise equity they typically do so in today’s environment on highly dilutive terms.  You can quickly find the net cash position of each company (as at its last reported fiscal quarter-end) by using the ‘Quarterly Comparator Ratios’ section of the Compare & Rank Companies feature found on the Main Navigation Bar of SRP.com.

3.    Quality of assets: consider the quality of the properties owned by each company in the context of whether they may be attractive to an acquirer or merger partner. Given current market conditions I believe it is likely there will be significant merger/acquisition activity involving Junior Miners.

4.    Bargain investments: in this market look for exploration companies whose current share prices might be bargains. I think you should review and analyze at least the following when making such assessments:

·    evidence of experienced management – look for recent Board of Director and management changes that ought to bring ‘management enhancement’ to potentially interesting exploration properties (see the Board/Executive Press Release data component on each Company Page of SRP.com);

·    cash positions that will enable further exploitation and potential exploitation of both exploration properties and NI 43-101 Resources or Reserves (see ‘Compare & Rank Companies’ feature on SRP.com as previously outlined);

·    properties that are in stable political environments friendly to mine development (see ‘Country Detail’ under ‘Economic Research’ found on the Main Navigation Bar of SRP.com for up-to-date political and economic information on approximately 70 countries);

·    properties that have or are close to existing transportation, utilities, and ore processing infrastructure;

·    regularity of Press Releases announcing consistently positive drill results (see the Drilling/Discovery Press Release data component on each Company Page of SRP.com);

·    properties that as they are further proven up might be of interest to major producers;

·    current stock prices that are significantly below recent trading prices – particularly if the current stock price is less than a recent financing price where institutional and other ‘sophisticated’ investors participated and no material events have occurred between the closing of the financing and the current date (see Price & Volume Charts and Financing News Press Release data component on each Company Page of SRP.com);

·    Insider Trading to determine if Insiders are buying shares (see Reported Trades by Insiders’ on each Company Page of SRP.com); and,

·    daily average share trading volume in order to determine the likelihood of being able to liquidate your shareholding in a reasonably short period of time (see Price & Volume Table on each Company Page of SRP.com).

These are only some of the factors that comprise a detailed ‘checklist’ of things to consider when investing in Junior Mining Companies.  I plan to discuss others in subsequent e-mails.

Best Regards,

Ian R. Campbell
President
StockResearchPortal.com